Riddle and Coghill | INSIGHT


IAN COGHILL, RIDDLE & COGHILL


Are we in for another boom and bust cycle?


The co-owner of Riddle & Coghill reflects on a rollercoaster year and contemplates how the changing housing market will impact business


W


hat a year 2023 turned out to be! Who could have predicted the continuous hikes in bank rates, the continuation of the war in


Ukraine, plus the terrible thought of another long conflict in the Middle East.


I don’t know all the answers to what lies ahead, but I do know that as someone with 40 years plus in the industry, the next year is the one I have least confidence in predicting. In Edinburgh, we will possibly avoid the worst of the highs and lows of the markets as we have quite a large financial services sector and they never seem to struggle like the rest of society. This part of the country doesn’t see the wild swings other parts do, but it is still tough out there and you have to be on your game. I suspect next year taxes will go up and businesses will have to bear the brunt of that. If the Government doesn’t eventually get a grip on the housing market, that will drive prices even higher than they currently are, and we will be in yet another boom and bust cycle. For me personally, housing seems like the biggest issue of the day. As around half of our business is done in the contract sector, we are wary of what the next 12, 24 or even 36 months may hold.


Static situation


The lower end of the housing market is likely to be people on lower incomes, with less savings, who have to do more borrowing. That sector will feel the squeeze and those builders will be trying to hit suppliers in an effort to get their costs down. That is where you can be working long and hard for very little reward and you don’t need much to go wrong for what you thought was a profit to disappear. The middle sector of housing – depending on your location – will likely remain static, in line with the past few years. Prices may fall back slightly while people become accustomed to a new cost base for borrowing, but the aftermath of Covid, Ukraine, Brexit and supply chain difficulties in general with be with us for some considerable time yet and we have somewhat acclimatised to that. Interest rates will be the same, and they will likely become a norm. The people buying in this sector will likely have fairly secure


jobs, haven’t had the inheritance handout yet that they may rely upon to upscale or move up the housing ladder. They will possibly forfeit holidays for a year or two to get their way. These people are more likely to have planned ahead and will be getting a bit back on any savings they have, which will hopefully allow a move.


This is the sector where your good independent retailer should be able to offer a better service to your smaller developer who has a reputation and a client base who appreciate some of the finer things in life. I don’t see a great change within this sector.


The top end is the scariest sector for me in the housing


For me, housing is the biggest issue of the day. As around half of our business is done in the contract sector, we are wary of what the next 12, 24 or even 36 months may hold


industry, as we are already seeing prices drop and it appears to be the one hit hardest, with properties sitting in towns for far longer than they used to. I have no doubt that if a house is well finished and in walk-in condition, it will sell, but many builders simply don’t spend the budget or plan the home out for what that high- end client will be looking for. The


contract market


certainly isn’t for everyone and can potentially break a business if strict controls aren’t put in place and adhered to. Still, we enjoy good relationships with all of our clients, but we adopt the


firm attitude that we work ‘with’ them not ‘for’ them In general terms, for both contract and retail last year, 2023 was a very strange year for us as a business. The usual suspects managed to put the brakes on just when we thought some continuity was about to happen. The media came in with the latest doom and gloom forecast as interest rates went up again and again and again, a new war, a new prime minister, another strike – any negative story to scare people with.


Another year without an election would be great, as far as I’m concerned. If one is called, be prepared for the taps to be turned off for a few months. Buyers will want to hold off, and wait and see what – or, who – happens. Then, a few weeks or months later, it will all be back to normal.


THE BIGGEST OPPORTUNITY FOR RETAILERS IN 2024 IS...


GIVE THE END-USER CHOICE Offer a better service to those customers who appreciate some of the finer things in life. People at the top end moving house don’t want someone else’s kitchen, they want their own. This is where a good independent retailer can do well.


December 2023 • 47


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