A year ago, few economists predicted the UK would vote to leave the EU and almost no one imagined that a reality TV star with a questionable business record and unprintably politically incorrect views on almost every subject would be elected president of the US.

Steve Norris

They probably had George Osborne or, at a push, Boris Johnson as favourite to take over whenever David Cameron chose to step down as prime minister.

However you personally fared last year, you have to agree that 2016 was full of surprises. One of those surprises was that not for the first time those bright economists, with very few exceptions, predicted the world would end if we voted ‘leave’ in the referendum. The chancellor solemnly predicted we would all be £4,300 a year worse off and the IMF, the CBI and the OECD all issued equally dire warnings.

Governor of the Bank of England Mark Carney perhaps unwisely expressed similar views before the vote. On the evening of 23 June, sterling rose against the dollar only to crash the following morning as all those bright boys in the City saw their spread bets go down the drain.

But however you voted that day, you have to admit that the gloom-mongers got it profoundly wrong. The economy did not tank.

In fact it grew in the second half of 2016 and is still the fastest growing in the G7. Forecasts of recession, technical or otherwise, proved spectacularly wrong.

Employment and exports rose. House prices did not crash. Carney’s decision to lower interest rates and pump more quantitative easing into the economy looked misguided and unnecessary. Some commercial property investors who had inserted Brexit clauses in their purchase contracts withdrew when they heard the result, but new investors have since taken advantage of the weaker pound to buy into what they see as still being a strong asset class.

Looking to the future

So what of this coming year, with Theresa May in Downing Street alongside chancellor Philip Hammond? We know she will trigger the formal leaving process by invoking Article 50 of the Lisbon Treaty.

Some convinced remainers will try to tie her hands, but she will have the support of a lot of MPs who voted to remain but recognise the force of the referendum. There will be no running commentary on her negotiation. It is not her style and it would make no sense.

In May, France chooses a new president - or possibly a presidente. Who these days would say Marine Le Pen of the National Front could not win? If she does, the whole future of the EU is in doubt. In October, Germany decides whether Frau Merkel should continue as chancellor and de facto Europe’s senior national leader, or whether her open-door migration policy costs her her job.

Meanwhile, president Trump has to turn words into action while the rest of us hold our breath. His isolationist rhetoric will not be good for the rest of the world, but will be popular at least in the short term back home. If we have learned anything in the last year, it is not to underestimate him. US interest rates are likely to rise over the year and most probably beyond.

Just remind yourself that the UK offers relative security in a world of uncertainty

There are obvious challenges for the property industry in all this. Commercial investors do need more clarity on passporting of financial services before activity returns to 2014 levels.

The chancellor surely has to deliver significant changes to stamp duty in his March Budget and the government needs to recognise that home ownership is less significant than actually having an affordable home.

Call Off Duty

A dedicated survey is ready and waiting to receive your comments and recommendations.

Please lend us your support. Add your voice to the industry heavyweights backing the campaign and help us put such a persuasive case to Philip Hammond that he is compelled to Call Off Duty in the March Budget.


But just before you reach for the cut-throat razor, just remind yourself that the UK remains an enormously attractive place to live, work and invest. It offers relative security in a world of uncertainty.

The best advice to the industry this January is to follow Churchill’s wartime KBO maxim. Keep buggering on.

Steve Norris is chairman of Soho Estates and BNP Paribas Real Estate