Donald, Article 50, Santa’s little helper (our Theresa) and the new Brexit reality show.

06 April 2017

What with article 50, concluding a second close for our long income fund, spending time with a couple of new Asian clients in both Central Europe and the far more glamorous Midlands, it has certainly been an interesting (and rather tiring) few days.

So what of Article 50, what does it really mean for the UK economy and particularly the UK property market? Well the honest answer is that I have absolutely no idea!! And, I might add, nor in my opinion does anyone else. What I do believe is that the next two to three years will see a fair number of bumps in the road and, at least in the short term, a decline in tenant demand in those markets which are financially driven (notably the City and Canary Wharf). However, a combination of the sterling exchange rate and the on-going upheaval in other international markets (notably the "Donald" effect in the States) has undoubtedly led to a bit of a resurgence in overseas demand for UK real estate. This says an awful lot about the relative liquidity and transparency of the UK property market, as well as our political stability and consistency of rule of law; positives which make our market well placed relative to many other competing international cities.  

In the very short term, we are probably slightly more positive about UK property returns than the consensus, with our best estimate as a House being that total returns for 2017 will be circa 6% average across the market. However, on a far more positive note, I genuinely believe that in the medium to long term, when Brexit is nothing more than a fond memory (and, who knows, perhaps even a reality show starring ex-Politicians Nigel, David, Jeremy and Boris), the UK will retain its status as a top tier target for investors from around the world.


Looking forward over the next 12 months, here is my latest wish list for Santa’s little helper, our Theresa:

  • Let's get those bumps behind us as soon as possible.


  • Let's make sure we remain a tolerant, multicultural society, attracting top talent from throughout the world - the assault on a young immigrant in Croydon last weekend was, in my opinion, nothing short of shocking.


  • Let’s work much harder at rebalancing our economy and avoid this growing perception of “there is London and then there is everyone else”.  However, with the risk of being controversial, the apparent focus by many on kicking the financial sector surely needs to stop, it is far too important for the future success of our economy. We should be looking to grow manufacturing, technology etc. side by side with the financial sector; this should not be an “either or” situation.


  • And, on a personal note, as someone who has Irish, English and Scottish heritage (I often wonder how many pure blood Scots, Welsh, Irish or English actually exist) I really do hope that we manage to keep the Union together.

Finally, I am pleased to report that we are just tying up a few administrative elements on our latest equity raise. More on this next week.

Kevin Aitchison

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