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Thoughts from an Edinburgh garden chair

Garden chair in Edinburgh

I sat in the garden on Saturday and reflected on the strange new world we find ourselves in. I thought back to 2008 and the financial crisis and how we had steered the business through that. Following the October 2008 half term break I took the business apart, stripped it back of any unnecessary froth and then put it back together again. Salaries were cut and we began to weather the storm.

Legislation had recently changed, requiring Energy Performance Certificates for commercial buildings and we were lucky enough to have some staff qualified to do that work. This created an income stream that was invaluable. The other big change was the introduction of the Home Report in Scotland. This was required prior to going to the market and so that allowed us to keep staff and to carry on. Under the old system, where we carried out surveys at the point of sale, I think the outcome would have been something different, as transaction levels plummeted.

I then turned my mind to where we find ourselves today and I concluded that we are in a very different, although equally significant, crisis. The fundamentals of our economy prior to the spread of Covid-19 were generally sound. The property market was working well, although it could be argued that there were a few less sellers than required and the lending institutions had loosened their grip on mortgage finance.

Politically it was perhaps a little different. The Brexit process had, in my view, stalled much of daily life. It was constantly in the headlines and seemed to be going nowhere. The Scottish Government desire for a further independence referendum had also been muted. Political uncertainty is rarely good for markets and the housing market is no different. So the General Election result and the suggestion that Westminster would not be agreeing to another referendum seemed to pave the way to some sort of political calm.

So, what happens next? Uncharted waters but I’m optimistic that those fundamentals should remain once we get out of this. The Government furlough scheme is a lifeline that many businesses and employees will be extremely thankful for. This allows us to have our teams all ready to go, once lockdown is lifted. The need to move house remains. Downsizers, up-sizers, geographic work moves, birth and death. All make the housing market tick, although I think there will be something of a deep breath before we fully get going again.

The commercial market will also need to go through some readjustment. There will be businesses which fail but there will also be businesses who grow out of this.

But the other big difference from my perspective is that many businesses are still running slick and tight after 2008. The lessons in terms of prudence and the need for working capital haven’t been forgotten. So I don’t see any widespread changes to our business once this is over. We’ll be fit and ready to go as soon as lockdown is lifted and the physical inspection of properties is once again possible.

I hope you and your families are safe and well.

About the author

As well as being a Director and Vice-chair of Allied Surveyors Scotland, Chris also sits on the board of Eildon Housing Association. He is a Fellow of the Royal Institution of Chartered Surveyors, having qualified in 1994, and sits on the RICS Residential Property Professional Group Board. In his spare time he enjoys spending time with his family, following Selkirk, Scotland and England cricket and has supported Selkirk Rugby Football Club for many years. He also plays in Selkirk Silver Band and can be found hacking around a golf course now and then.

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