Richard Pickering, Head of UK Research & Insight gives a personal view of the business and role of property in ‘New Europe’ , his weekly email update.
Power, Parliament and prerogative Pitting the power of the Government executive, against that of Parliament, and the Judiciary, an action of profound constitutional importance has been commenced in the High Court. The action seeks judicial review of the decision to invoke Article 50 without Parliamentary approval. The Government’s case rests on applying ‘royal prerogative’ (essentially a form of delegated authority); whereas the applicant’s case rests, somewhat aptly, on European rights. Whereas the outcome will test the relative powers of our decision making bodies, will it make a practical difference? Firstly, regardless of the result, the decision will almost certainly be appealed. Secondly, would Parliament really run a different course to Government if given the choice? Probably not. Delay might be the principal outcome.
Wealth and prosperity Bristol is the best place in the country to do business according to a new index produced by the Legatum Institute. Although the top end of the table is dominated by London, there are also notable mentions for Edinburgh (#5) and Newcastle (#8). The index considers factors such as entrepreneurship, infrastructure, logistics and start-up survival rates. A separate rank for prosperity tells a different story. This is dominated by semi-rural areas in the Home Counties, highlighting “the failure of the UK’s cities to translate their wealth into prosperity”. Localism and devolution of economic strategies is the answer, concludes the report.
Prices v Valuations v Sentiment The IPD UK Monthly Property Index fell by a further 0.21%, bringing the total reduction in capital value for the months July-September to c. 3.6%. This compares with our own deal tracker, which suggests that values have fallen by just under 3%. Meanwhile, our investor sentiment survey conducted in July recorded that investors believed that prices had already fallen by 6%. Why the disparity? The IPD Property index tracks the net asset value performance of property funds; our deal tracker looks at traded property, and the last measure was sentiment only. Possible conclusions: Investors have traded their most defensive stock? Limited evidence to pull down valuations? Sentiment is overly bearish? There’s worse to come?
Popularity contests The Economist’s Daily Chart this week highlights the average earnings that are paid to celebrities for endorsing products on social media. Quite a lot as it transpires, with payments up to $300k for a single post on YouTube; but it all depends on the number of people following you. Can we use Twitter followings as a proxy for other popularity power battles? On this basis Donald Trump (12.5m followers) would beat Hillary Clinton (9.7m), but both are dwarfed by Barack Obama (78m). Jeremy Corbyn (650k) would beat Theresa May (170k) and Nigel Farage (485k) would beat Donald Tusk (400k). Pop stars Justin Bieber (88m ‘Beliebers’) and Katy Perry (93m ‘KatyCats’) duke it out for the #1 celebrity slot, but Bieber’s prodigious posting (an incredible 30k tweets) and following of others (288k followed) are perhaps what propels him to higher net worth ($200m v $125m). Meanwhile Kanye West has 28m followers, but he only follows one person – surprisingly not himself, but his wife.
Richard Pickering, Head of UK Research & Insight.