Looking back allows us the best opportunity to predict the future. It’s the closest we can get to having a crystal ball. We always use trends when looking at risk mitigation for projects that in some cases take 3 to 5 years from inception to completion. Of course, no-one knows what will happen during the rest of 2020 and onwards, however it may be that we can position ourselves a little better using lessons from the past..
Principally in this article we will consider my own lessons from the1990-91and the 2008-09 recessions. Whilst touching briefly on pre-recession, it is the recession and post-recession periods that I believe give our greatest lessons and pointers for the future.
The Now – part 1
It is our own health and that of our loved ones that is our top priority. Staying safe and well whilst ensuring that we do not risk other lives is our minimum duty as citizens.
Businesses across all sectors have taken and in many cases will continue to take big hits. For the first time in my lifetime I do believe that we are all in this together and there are no magic answers. When faced with a situation that changes our daily lives and brings uncertainty, it is important to STOP. Initially most fear the worst outcome and instinctively act through that fear. When faced with a decision, the first question is “does this decision really need to be made now?” Thinking and talking the situation through is the key as none of us have the ability to see all the ‘what-ifs’. Sometimes it is a case of “who do I need to talk to?” and the answer in the first instance is the best person that you know and is available, anyone is better than no-one. Ego and pride stop many, yes mostly males, from reaching out when they don’t know the answer. One of the key strengths in an individual is the willingness to ask the “who?”, “what?”, “why?”, “when?” and “how?” questions and of course acting on the answers.
Whatever your situation there will be someone within your immediate circle who can help or will know someone that can. If it’s related to property development, land, planning, funding or investment then if Richard@yourlandpartner.co.uk can’t personally help, it is very likely that I or one of my team can connect you with someone who can.
My official entry into the world of property development came in the summer of 1976, post the 1973-74 and 1975 recessions, which saw continued high inflation (stagflation) from 9.2% in 1973 to 16.5% in 1976 and interest rates in the UK of between 9.0% and 15%. James Callaghan was the Labour Prime Minister, strikes and riots were quite commonplace across the country and to cap it all, it was one of the hottest summers on record.
Following four years of steady growth with new home completions rising to c240,00 by 1980, the country then slipped in to a recession (1980-81) with interest rates at 17% and inflation at 18%. Yes you read that correctly! This was largely a result of spending cuts and the switch from a manufacturing economy to a service based one. The Conservatives had taken power in May 1979 under Margaret Thatcher.