Expert View: We are at the bottom now
I am feeling reasonably optimistic. The last few months of 2008 were grim. The recession came as a shock — not the reality of it, but the way I felt about it.
I wasn’t sure I had the energy for another economic downturn. Thankfully, that mood passed. My business has been through a thorough “service”, is fit and healthy and I am up for the challenge of the next phase. If you are an entrepreneur, you cannot sit on your hands. You have to change.
With the stock market still languishing and interest rates barely above zero, well-let commercial property is now an attractive investment.
We are fortunate that 95 per cent of our properties are let, so things are not too bad. It is back to basics — keeping the existing portfolio healthy and doing one or two joint ventures.
Residential lettings are holding up well, particularly in London. And, if the housing market starts to recover, everything else will take off. It is a question of confidence. I could be wrong, but I reckon that if we are not right at the bottom now, we ain’t far off it.
The banks still are not lending the way they did for a decade and we have almost reverted to the ways of the 70s when, if you wanted a mortgage, you had to save with a building society for six months before they would even talk to you. Back then, you had an interview with the manager and, if he thought you were suitable, he would lend you the money — two and a half times your salary if you were lucky. Another option back then was to go to the GLC (Greater London Council) for the funds. Imagine.
The government pretty much owns all the banks now, so we will all be borrowing from them again. Who would have thought it?
David Pearl is Chairman of Structadene, a commercial and residential property investment company