Brexit. The word continues to reverberate around the UK’s national conscious; our politics, our newsfeeds and our markets. Every ray of hope of a deal leads to rallies; every rebuttal from Brussels generates its own gravitational pull on the pound and FTSE.
Property and infrastructure have not been immune to this. It needs not be said that retail has been facing some uphill battles, whilst agents’ chatter has become significantly more sombre since the vote to leave in June 2016. Despite this, it is worth pausing to reflect on our social role and purpose at times like this, rather than descending into ever-greater despair.
We are not an industry manufacturing obsolete products like CDs or cassettes, or one likely to be superseded by a digital alternative any time soon. Instead, the products we are creating, and have created, meet some of society’s most fundamental needs: places, homes and buildings where people can live and work, rest, care and be cared for. We design infrastructure that enables people to travel from one of our places to another, and which transports the power and utilities required for modern life.
Ironically, the need for our industry is greater than ever; many UK towns and cities still need regeneration, homeless families need stable homes rather than rooms in a B&B, Birmingham and Leeds need new children’s hospitals, our knowledge economy needs crucibles of education and start-up space, the North desperately requires better transport infrastructure.
Critically, Brexit hasn’t alleviated any of these social needs. My team in Legal & General has been busier than we’ve ever been so far this year, precisely because it’s the public sector that often best understands the social need for our industry.
The need for our industry is greater than ever… Brexit hasn’t alleviated any of these social needs
I’ve learnt never to underestimate the power of one person determined to improve their community, city or region.
We gathered 100 of these people for our Future Cities Commission in Leeds recently.
Tom in Newcastle, who knew he needed our industry to create a world-leading knowledge hub on the site of an old brewery. Huw in Cardiff, who needed a tram to enable the city centre’s economic growth to benefit its suburban communities. Judith in Leeds, who identified the need for a new stand at Headingley so that Ben Stokes had a fitting arena for his Ashes exploits. Jo and Richard in Croydon, who saw the role our industry could play in providing homes for some of the most marginalised families in London.
It might seem an odd juxtaposition to equate the need to identify our social role, and the true social need for our “product”, with achieving commercial success. And some will be able to “pivot” to achieve this social purpose far more easily than others. If one’s favourite business model is borrowing from banks at maximum leverage to develop and knock out super-prime London flats to the world’s richest 0.01%, I’d have my concerns right now. On the other hand, there is no end in sight for society’s need for affordable housing and acute hospitals.
All this “social stuff” is all well and good, but as a business, it goes without saying that we also need to look out for the other side of our purpose; the need to protect and grow the nation’s savings and pensions.
And so, the need for our industry remains undimmed. The question is, can we meet it? Brexit gives us an opportunity to come together to shape our national destiny. We need to have the humility to listen to those who know where that need resides in their local communities. And the agility to adapt to meet that need – rather than falling back on the business models of the past. Do this, and commercial success will no doubt follow.
Pete Gladwell is head of public sector partnerships at Legal & General Investment Management
