With the over-hyped negative publicity surrounding the UK economy in the wake of the fall out from the US credit crisis we need to consider the fall out at a local level.   Despite last month’s Bank of England rate reduction many lenders put up their residential borrowing rates. HSBC made a mockery of this with the bold move to match any fixed rate deals which were expiring and to extend these by a further two years.

Whilst Commercial First put new lending on temporary hold lenders are still generally positive albeit and understandably they are more cautious. One cannot overlook the fact that interest rates remain low and unemployment is still falling.

Activity in the Cornish market remains strong albeit certain sectors are fairing better than others. The investment market is undergoing a correction period which many would argue is overdue. Not withstanding this yields would have needed to be corrected to reflect the added costs of holding property through empty business rates should landlords suffer rental voids. Thank you Mr Brown!

With business confidence having been knocked activity in the office market has slowed slightly. Notwithstanding this there is still an underlying desire for companies to be located in better quality accommodation and for professional firms to be represented in the County.  The industrial market is performing well with the quality of stock having improved over the past few years which has benefited rental growth. Void rates are low.

The retail and licensed and leisure sectors are most likely to suffer should there be an economic downturn. This is where the brand “Cornwall” will come into its own. The March Easter and poor weather did not particularly benefit the local economy however with most of the UK’s schools enjoying a late holiday after Easter it is understood from various catering establishments that April may have proved to have been a better month than last year.

The T5 fiasco, expensive Euro and lack of sporting successes will make overseas holidays and short breaks less attractive. This together with the improved A30 and increased flights into Newquay can only help Destination Cornwall.