It’s that time of year, when Business Link Magazine invites the region’s business leaders to offer up their predictions for the year ahead.
It has become something of a tradition, given that we’ve been doing this now for over 30 years.
Here we speak to Paul Morris, Development Director at St James Securities.
Looking back at last year’s predictions and they largely unfolded as planned, with the economic slowdown beginning to stabilise.
Inflation has come down, although it remains a cause for concern, especially given recent announcements in the Budget and observations from the Office for Budget Responsibility (OBR).
Over the next 12 months, we are likely to see modest reductions in interest rates – possibly by a half-point in total, delivered as two quarter-point adjustments. While not as many or as deep as had been hoped, the cuts will still provide some relief and stimulate activity across various sectors.
Economic growth continues to be slow. While we had not anticipated any significant growth, some Budget measures may inadvertently have the consequence of supressing growth. That said, I hope much of the revenue raised will be directed toward improving public services and, crucially, start Britain building again with more funds to support housing and regeneration projects.
A government aligned with urban regeneration goals provides a promising backdrop for advancing these critical initiatives.
The property market will benefit slightly from reduced interest rates, with property yields likely to sharpen and values beginning to climb again. Meanwhile, construction and material cost inflation has stabilised at 2–3%, a manageable level that will support on-going and new developments, albeit the inflation encountered over the last 24 months is now baked in and continues to provide challenges to project viability.
This stability is encouraging, although progress remains slower than we would like. Hopefully we will see continued steady improvements subject to actions on the world stage.
We remain steadfast in our commitment to transforming the Becketwell area of Derby into a true mixed use regeneration scheme.
Our future plans include a 150-bed build-to-rent scheme, a four-star hotel, multi-storey car park, and 100,000 sq ft of prime office space, which will create a dynamic destination for living, working, and leisure.
A key focus for us is securing substantial pre-lets, and we are working closely with Derby City Council and the East Midlands Combined Authority (EMCA) to access funds to assist in the delivery of future phases.
Interestingly, Derby’s challenges are not unique. Many cities are grappling with similar issues, particularly around development viability. However, we are starting to see steady improvements – interest rates are slowly recovering and will gradually drop to around 3.5% by 2026. This should create a more conducive environment for investment and growth.
Looking ahead, realism is key. While progress may not be rapid, the steps being taken today lay the groundwork for a more stable and prosperous future.
