The Coronavirus has been a hideous experience for many. Throughout the UK families are mourning lost loved ones, the heroes of the NHS have faced their greatest ever test – and passed with flying colours – and businesses large and small have seen their operations turned upside down.
It’s been hard but now that the prime minister has announced the first tentative steps toward returning to normality, I thought I’d look ahead and see what Nottingham might look like post-lockdown. Having owned and run a successful insurance brokers in Nottingham since 2004 and having a portfolio of clients that span professions as diverse as landlords, tradesmen, fleet managers and local shop owners has given me a great deal of insight into various aspects of the Nottingham economy. Generally, insurance is one of those sectors that is hit hard early in a downturn – as people take vehicles off the road or reduce cover levels as their business does less – and equally it is one of the first to see the benefits of recovery. In recent weeks we’ve experienced both of these and the easing of restrictions will doubtless lead to a flood of insurance quotes as we all get back to normal, or at least get used to the ‘new normal’.
So, what does the end of lockdown mean for Nottingham? Well by all accounts quite a lot and here is my take on what the business, property and retail sectors can expect in the coming months. It’s a mixed picture, as you might expect, but there’s one thing that is certain: Nottingham will recover and come back stronger for it, that’s just what our brilliant city does.
Nottingham’ High Streets and Lockdown: Death Knell Or Second Chance?
Like so many UK cities, Nottingham’s retail scene has been under severe strain for years. Despite a booming local economy, shop owners have really struggled. Crippling business rates, incessant competition from online retailers, high rents and changing customer purchasing habits have driven many an independent and chain store to the wall. In such circumstances the enforced lockdown was about as welcome as news of Amazon’s latest expansion plans.
For those that do re-open – and I suspect there will some who be forced to call it a day, alas – I have a sense of optimism. As Joni Mitchell put it, ‘You don’t know what you’ve got till its gone’ and I believe that the enforced lockdown and our sudden reliance on deliveries will make us all appreciate retail’s importance. What we’ve experienced of late is a taste of what life would be like without our local shops and I for one haven’t much liked it. Retail is about more than just goods, its also about service and the chance to interact with others: in short its about community. With our freedom restored there will doubtless be a rush of business – especially for bars, pubs and restaurants – and retailers will see a spike too. In the longer-term retailers need to up their games and provide the sort of experience that online cannot, they need to extend their delivery, click-and-collect and online offerings and look to changing their opening hours to suit their customers. Yes, they need help in terms of business rates and rents, but they have a golden opportunity to remind people of their value and to do so will require some ‘new normal’ thinking. People have been lamenting the demise of our retail scene for years, so this is the time for us to show our support for them, while we still can…
Nottingham’s Property Market Growth: Stalled Not Stopped
Nottingham’s property market has boomed over the last decade. According to figures from the Office for National Statistics (ONS) there’s been a rise in property prices of nearly 39% which have driven by over 100,000 sales. The rental sector has also enjoyed a period of strong growth and the average rent now stands at £1,129. This surge reflects a general buoyancy and optimism in the wider Nottingham economy which, thanks in-part to the burgeoning tech and creative sectors, has driven demand for housing through the roof.
Coronavirus and the lockdown have obviously made moving next to impossible. Leading estate agents Knight Frank recently reported that there’s been a 37.5% drop in house sales in the first three months of 2020. The rental sector has also been badly affected. Student landlords have seen tenants not return to their properties thanks to tuition being switched to online leaving them with the headache of needing unoccupied property insurance and young people who were planning to fly the family coup have been prevented from doing so.
Despite this, the general consensus seems to be that the property market will recover swiftly; certainly, at a faster rate than in the aftermath of the 2008 banking crisis. Savills are predicting that house prices will rise by 15% over the next five years as demand continues to grow. In the short-term this will be stoked by the lack of new homes being built as construction sites have been in lockdown. Given Nottingham already had a housing shortage, I think we can expect the recovery to be rapid.
Business: As Usual or New Usual?
The Coronavirus is expected to cost the global economy around £2.8 trillion, roughly the same as the UK’s annual GDP. Lost income, the costs associated with moving to remote working, falling confidence and the mothballing of premises and plants have taken a hefty toll. In the short-term there’s going to be pain and recession. The Bank of England has said that the UK could be in for the worst downturn in history with a 14% contraction and unemployment levels doubling.
Sobering as these figures are, many economists are saying that while downturn will be sharp, it may also be short and we’ll see a ‘V-shaped’ recession rather than the more prolonged and painful ‘U-shaped’ one. Whatever its shape, the fallout is going to change things forever. For example, businesses and employees are going to think anew about working from home. The model has been proven to all and many have found that they prefer it and that its cost-effective.
A boon for Nottingham will be the further expansion of the digital economy. Nottingham is well-known as centre of digital innovation and creativity and as more and more people shop online – UK ecommerce is set to top £200bn this year – and businesses turn to digital transformation, so our local economy can expect to grow even faster.
Environmentally there may be a dividend too. Nitrogen dioxide – NO2 – is a major pollutant associated with exhaust fumes. Since the lockdown pollution levels have fallen by 40% according to the University of York, something that is literally a breath of fresh air in a polluted city such as Nottingham. This improvement will undoubtedly put pressure on the government and local authorities to do more to retard the use polluting vehicles and spark the electric vehicle revolution that we’ve seen growing in cars and increasingly in commercial vehicles.
Nottingham Post Lockdown: Reason to Be Cheerful?
No one is going to lament the passing of this crisis. It’s been heart-breaking, exhausting and costly. For all that it might just have some positive impacts on our economy, our environment and on how we treat each other. In a world in desperate need of positives, I’ll grab those with both hands.
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