Breaking Property News – 15/06/2023
Daily bite-sized proptech and property news in partnership with Proptech-X.
With banks failing, technology companies imploding and the UK housing market going backwards, just what is going on
If you live long enough you see all the same cycles come around, the UK housing market goes from boom to bust, interest rates move from low to high, banks fail and technology companies become dust overnight.
The problem is that all of these things are happening at the same time, and unlike at the start of the century, when the world was not full of digital natives and we are all plugged in matrix style, it seems that ‘bad things’ are coming at us at a rate of knots.
On the micro-level, in my street there are four houses for sale, one was sold last year for £450,000 it completed in autumn 2022. The new owners are moving on – with a listing price of £450,000. Five months later they still wait for a buyer as does everyone else.
Autumn was the hightide of Rishi’s giveaway SDLT giveaway washing through the market and the start of the Bank of England increasing rates, which will mean very soon a two year fixed will be above 6%, a whopping amount if you were used to paying 0.9%. The new Chancellor Mr Hunt (himself a millionaire) says that wage inflation means homeowners with mortgages need to suck it up. In the general election I think they may well have thoughts on that.
Since the demise of Silicon Valley Bank, and the failure of four other major banks, though we are not in the 2008 global meltdown of the banking system, there is clear signs of a lack of liquidity. The polite term for saying that many banks are sitting on certain assets that may in fact be quite toxic, which means that they may find themselves struggling to function. The outcome, prohibitively high rates for commercial lending impacting economic growth.
Housing in the UK is unfortunately the barometer to how wealthy people feel they are, and in fact how much disposable income they have, if your mortgage payments have increased by 40% that affects many things. If you are a landlord, the financing of your portfolio just keeps getting more and more expensive, the only variable being the level of rent you can set for the tenancy. Labour talks about rent caps, better social housing etc, if it comes to power how will it solve this problem?
Rishi Sunak, multi-millionaire is telling lenders to look after mortgagees in peril, he is a man so devoid of knowing what it is like to make the decision between putting food on the table or paying to keep the roof over your head, he is probably better off in la-la land worrying about what Boris will get up to next.
And in many ways this is the whole problem, there are some sizeable headwinds, technology promising to be the great future for all, but as Labour now see the huge investment to get ‘there’ is worryingly high and there is no certainty of outcome. With hundreds of thousands of global redundancies in the tech industry, VC investment slowing and companies failing to produce revenue, it does seem very close to a dotcom bust landscape.
The other headwinds, we need strong and credible leadership from the government and get only reactionary policy, fiscal planning is now a rout, the target of halving inflation sounds an election winner, but not if your home has been repossessed or the housing market stagnates.
None of this is new insight, when interest rates go up, house sale prices fall, and the housing market stagnates. When banks fail, others follow causing the economy to go backward. And all governments in their dying days run out of policies and direction.
But the more worrying kicker, unlike previous years of upheaval, if the promised digital brave new world turns out to be a multi-billion pound hype, pushed by some pretty hefty digital marketing platforms like Amazon and Facebook, then all that has happened is capitalism got itself loaded onto a smartphone. Which is not a blueprint for a sustainable future economy.
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With these insights, facilities teams and property owners can reduce recurring overhead expenses relating to maintenance, energy, and more. The predictive intelligence provided by Kterio also enables compliance with new and emerging ESG (Environmental, Social, and Governance) mandates to support sustainability goals and further reduce costs.
Field tested and proven in handling highly complex systems across multiple properties, Kterio’s Immersive Building Technology Management Solution is supported via the company’s Smart Service Centre’s, providing the technology and human support to help customers navigate software implementation, data/energy analysis, and scalability. Realcomm attendees can reserve one-on-one demonstrations of Kterio’s Immersive Building Technology Management Solution here.
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
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