Reasons to be cheerful - Part 3

Andy Murray triumphant at Wimbledon; the British & Irish Lions rampant Down Under; and much of the UK soaked in brilliant summer sunshine – just three reasons to be cheerful in the third, and final, part of this occasional series of personal observations.

There’s also good reason to believe we may finally have turned the corner on the economy. After nearly six years of incessant gloom, stronger indications than ever before suggest that UK Plc is growing again. If so, I attribute it less to the relatively feeble actions of the Coalition, than to the inherent strength, flexibility and adaptability of the private wealth-creating sector.

It also strikes me that the people who make a difference in such matters have finally had enough of holding back. This is the ‘sod-it’ factor as identified by one of my favourite economists, David Smith of the Sunday Times. There comes a point in any economic crisis, he argues, when positive momentum begins building almost off its own accord. We may have reached that point.

However, I don’t underestimate the fragility of the nascent recovery. Nor do I ignore the still-looming dangers posed by the perilous state of the Eurozone; or the possibility of further toxic developments at one or more of the big banks. And a single glance at the Middle East – that perpetual hotbed of tribal turmoil and bloodshed – sends shivers down my spine.

That note of caution added, Britain may be heading for annual GDP growth numbers of between 2 and 3 per cent – a decent enough figure for a mature economy competing with a rash of brash new global economic tigers. It would see tax receipts rise, employment go up and the deficit down; unless, of course - Len McCluskey gets his way and by proxy injects into the economy with his own noxious mixture of hard-left poison.

A good degree of my optimism was present at a conference for property developers and investors I attended last week. Taking as its central theme the thorny subject of finding funding, an impressive panel of speakers representing the full spectrum of property professionals spoke eloquently and convincingly about the availability of liquidity -concluding that it exists in plenty. The key, as we all know, is where to find it and on what terms.

Alternative lenders, including bridging providers, are one obvious source. Perhaps more importantly – and this point was made strongly – they are sufficiently embedded and established to fight off any challenge from a refreshed and newly-capitalised banking sector. As one speaker observed, brokers and investors have long memories and will not easily be seduced back into the silky arms of the bankers who abandoned them so abruptly in ’08.

That the banks will re-engage at some point is not in doubt; to what degree though is the question. A likely scenario in the future is for developers, investors and intermediaries to adopt the portfolio approach to lending partnerships. This will see them operate panels of lenders to cover all opportunities while diversifying their reliance on one particular source of funding. It already happens of course, but I see it becoming far more widespread and the norm as sector activity picks up.

On a far more sombre note – and I hope one that does not sit too jarringly here – I must pay my own tribute to David Johnson whose death was announced yesterday. I knew ‘DJ’ well working under his remarkable sales director stewardship at iGroup, GE Money and, more recently, at specialist lender Money Partners, of which he was chairman.

Much has rightly been said of David’s unique contribution to specialist lending in the UK, and his legacy is assured. But words alone can never fully capture the spirit and personality of a man who enjoyed life and work to the full. I am proud to have been a part of those success stories - it was David who gave me that chance when the chips were well and truly down by backing me - and I will miss him as a friend first and foremost. My commiserations go to his family and his passing leaves a gap that will never be filled.