Ronald Reagan once said “Government isn’t the solution to the problem. Government is the problem”.
Although not always the case, it very much is at the moment as we watch the Brexit shenanigans trundle monotonously on. But what seems to have been lost in all the noise is that we are lucky to be able to have a debate like this at all (even if it doesn’t seem like it right now).
(Meaningful) Political debate is a luxury that is not available to a frighteningly large proportion of the world’s population, so although it seems turbulent right now, this is nothing compared to what most people have to suffer. As one potential member of Mercury Homesearch said to me:
“We regard political unrest as guns and tanks on the street”.
One does need to put these things into perspective. And despite the doom-mongering in the press and elsewhere, people are still flocking to come to the UK and especially London. As some French clients recently pointed out – “Why on earth would you want to come to Paris?” Although half-joking, the simple fact is that London is still the most attractive city in the world.
Does this mean that we can be complacent? Of course not, but at the same time the blind negativity is frankly idiotic. But this is a great example of what happens when conventional wisdom enters “fear mode”. Rational thinking quickly evaporates. The same is true when we fully swing into greed mode too and everyone is wildly optimistic. That will happen again.
But for now, we are seeing what we always see in times of political turbulence: transaction umbers in London plummet – far more so than in the rest of the country. Typically, transaction numbers fall 30% in an election year where there is some doubt as to the result.
For example, in 2014 transaction numbers fell 30% in London but only c. 15% for the rest of the UK. Unfortunately, we have effectively had a vote of sorts in every year since then except 2015:
2016 = The Brexit referendum
2017 = Theresa May’s General Election
2018 = Meaningful Vote on the Brexit Deal (postponed yesterday!)
The fall in transaction numbers has been much higher than the price falls, as I predicted on CNBC in 2016 and until this monotonous politicking stops you can expect transaction levels to remain well below the norm.
There is a reason that the legislation in this country tries to prevent elections happening more than once every five years. You are seeing why now… most people and businesses want government to get out of the way – this is why the markets often do very well during hung parliaments; they know that the politicians are powerless!
Anyway, enough of this.
I would just like to take a moment to thank you all for continued support. There are those of you who have become members of Mercury Homesearch and/or introduced new members to us - I have thanked you personally during the year, but I would just like to say it again. Thank you, it is very much appreciated.
But I would also like to thank those of you who have sent me articles or questioned my views (how dare you!). But seriously, your thoughts help me question my thinking which is invaluable so please keep disagreeing (or agreeing!).
I look forward to more of the same next year. Until then, I wish you all a Merry Christmas and Happy New Year.
2019 will be fun.
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My name is Jeremy McGivern. I am the founder of Mercury Homesearch, the internationally renowned property search consultancy, and author of The Insider’s Guide To Acquiring Luxury Property in Prime Central London. I have been acquiring property in prime central London for clients for over 13 years.
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