After a positive start to 2012 and an excellent first quarter, activity since the announcement that the UK was back in recession has been more muted. This goes to show just how fragile confidence remains. However I believe the biggest brake on growth is the banks who rather than using the cash provided to them by Quantitative Easing are using the money to shore up their balance sheets and to store cash. This is great for the banks but not so great for the rest of us. Consequently credit remains tight and although the trading banks claim that they are all open for business, their appetite for new lending goes up and down in big swings.
The general view is that we are in for a sustained period of low asset growth. I am of the view that unlike residential property sales where there is a depressed market also partly caused by an ever-increasing over-hang of properties trying to be sold by ageing baby boomers into a diminishing and constrained purchaser market, I believe that the number of business buyers will continue to increase fuelled by older buyers needing to subsidise their pensions and by younger buyers and redundancy takers wanting to become self-employed. Unfortunately that does not mean that business prices will rise as the twin constraints of tight credit and flat property values will remain.
Because of the Queen’s Jubilee and the Olympics I don’t think we will see a significant uptick in market conditions until the beginning of September but by then (hopefully!) the Euro Crisis will be moving towards resolution and the green shoots of recovery will have taken hold.
If you have a buyer for your business then my recommendation is that you hold onto him/her for dear life and if you feel that your property might need to be re-priced to meet the market then please do call us to discuss it.
