This blog was first published in June 2016, the day after the Brexit referenedum.
A Brexit-induced crash in the markets seems likely to set the framework for the work of planners in the months ahead.
I am writing early on Monday afternoon, 27 June 2016. The Pound has fallen to a 31 year low; shares in Barclays are down 12%, in the Royal Bank of Scotland 14% In the construction sector, Taylor Wimpey shares are 15% down, Barratt are almost 13% down. Easyjet is also hit – their share price has slumped 18% this morning after they said they anticipate a Brexit-induced drop in revenues.
It seems clear that in the short term at least we are heading into a climate where a combination of uncertainty is going to squeeze private sector investment in the built enironment. This is bad news for all those involved in the construction sector, from the building sites to the design studios or council offices. Expect the number of planning applications to fall, and revenue from fees to decline.
If this proves to be more than a blip, the consequences could be a significant shedding of staff across the sector. Jobs will be at risk. In the longer term reduced government revenues could trigger a further squeeze on local authority budgets, with consequences for staffing and disposal of any remaining land and building assets.
The banks have already been reluctant to lend to the housebuilding sector for some time – though you don’t hear so much about that as about planning red tape holding up the delivery of much needed houses. We seem to be heading into a situation where the banks will be even more cautious about funding development. That will particularly impact on projects and places that are seen as high-risk / marginal anyway; ironically this is likely to impact on some of the places that voted most strongly for Leave. Similarly, the uncertainty about the future of EU structural and infrastructure funds is likely to have a negative impact on leverage for existing projects in some of the most deprived parts of the UK. Regeneration will become more challenging in the months ahead. The aspirations of politicians in Westminster and the devolved adminstrations for increased house-building are unlikely to be realised.
The impact on the budget airlines could see them pulling back from some of their routes, with job losses or even closures at some smaller airports. The places that can be reached on a day-return business trip seem likely to be reduced.
