Temporary shutdown could lead to economic bounce

Euan Kellie, founder of Euan Kellie Property Solutions, believes the slowdown across the industry could translate into pent-up demand and a subsequent economic bounce once the Covid-19 outbreak has passed.

“I would hope by this time next year we will be back to normal and, if anything, I am anticipating there being a decent bounce from the economy once we do come through this,” he said. 

“I am of the view that the market was heading in the right direction after an awkward year last year with Brexit and the General Election but at the beginning of this year, for the first time in a long time, we were on a positive run with no major hurdles. 

“That would have potentially carried on if we hadn’t had the huge hit of coronavirus. We will undoubtedly have a pause in lending and the housing market but I think that all of this is going to translate into pent-up demand.” 

With construction workers across the region downing tools and heading into self-isolation amid widespread site closures the future of the built environment in the North West is far from certain.  

John Wilson, managing director at Eric Wright Group, said: “I don’t think we are going to get back to normality earlier than three months and I think it is going to be more likely six. Even then I think that might be me being a little bit optimistic.”

Eric Wright is still operational at some sites but Wilson admits the precautions being put into place is slowing activity down. 

He said: “The measures that we have in place, like one-way systems on site, all affect productivity so all our contracts are going to take longer to complete than they would have done otherwise.  

“The ones that are on programme are unlikely to finish on the contract dates. Generally, [clients] are being very supportive and understanding.” 

Adam Higgins, co-founder of Manchester-based developer Capital & Centric, has also noticed the supportive spirit within the industry. 

PRS 2020 (51)

Adam Higgins, Capital & Centric

“I have been impressed with the flexibility shown within the industry in accepting delays and reduced profits and there has also been a good response from banks and funders. Everyone is trying to help everyone. We are all in this together,” he said. 

Higgins remains positive about the future despite the lingering uncertainty, and believes that firms cannot afford to stand still. 

“We are very much looking at opportunities. Ultimately this is a temporary thing, so we are still pushing ahead.” 

Despite this proactive outlook Higgins expressed concerns about the impact the virus could have on smaller towns within the region. 

“It is difficult to know what will happen. I think Manchester and the big city centres will get their acts together and bounce back quickly, the challenge is for smaller towns. 

“Local authorities need to work hard with the private sector to make sure development doesn’t stop or they will find themselves at the back of the queue.”

Kellie agreed with Higgins but said he had been impressed with the response from local authorities. 

“The big risk is that there is a natural fatigue that comes in and everyone slows down, and then you are playing catch up. I think authorities, and this includes smaller towns, need to keep things going because you can’t allow property to stagnate.  

“We have already seen in the last seven days some local authorities in Greater Manchester sending a very clear message to the market which is that they are open for business, keen to keep the planning process going and continue engaging with investors and developers.” 

Meanwhile Wilson’s main concerns were reserved for the supply chain. 

He said: “Long-term we need to make sure our supply chain survives and when everything gets ramped back up that supply chain is in place. They need to be supported by the main contractors. 

“There are concerns that people aren’t paying the supply chain as they should and a lot of those businesses rely on that money coming in. 

“They can furlough the staff where appropriate and get the Government grants but at the end of the day there are bills to pay and if there is nothing coming in then there’s nothing to pay out.”

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