Residential Briefing Note: February 2018
Date of Article
Feb 27 2018
Sector
Residential

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Market Overview and Brexit Watch

GDP growth during the fourth quarter has been reassuring, if first estimates are to be believed. At 0.5% during Q4 this points to an economy that looks quite a lot better than many had anticipated in the weeks and months that followed the EU Referendum. Many had anticipated that the uncertainty following the vote would leave the economy floundering but this has not materialised in quite the way predicted. Many of these same forecasters think that 2018 could be the year the economy feels the Brexit bite but others - this author included - think that in fact 2018 may end on an even stronger note.

Brexit negotiations continue this month with just two issues on the table to sort: the scope of the transition deal and the Northern Ireland border. There is currently no known (or publicised) solution to the prevention of a hard border in Northern Ireland and given that the subtle avoidance of this issue was how ‘significant progress’ was able to be made in negotiations in December, it is hard to see how this will not hold things up yet further. The transition period is also still requiring some hard bargaining including what rights EU nationals arriving in the UK during the transition period, will have and for how long.

Despite this, and as discussed in previous editions, negotiations are moving forward, and the transition period will undoubtedly be agreed eventually. We expect that inflation will begin to normalise to acceptable levels in the next few months, while wage growth should also pick up, and this is not to mention that the wider global economy is in a very strong position currently. All of these will hopefully(!) mean that levels of uncertainty diminish and consumers, businesses and investors grow ever more confident about the immediate future.

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