A new survey of British Property Federation (BPF) members, released today, shows a positive short-term outlook for the UK real estate sector, with 88% expressing confidence in its performance over the next 12 months.
The survey, commissioned by BPF and Grosvenor Britain & Ireland (Grosvenor) with fieldwork by Ipsos MORI, found the position is less certain in the longer term, with just over half (54%) confident of the real estate sector’s performance in the next five years.
A majority of property owners and investors (60%) said their company’s development activity would increase in 2016, although the survey also identified a number of barriers to property supply which central and regional Governments could lower.
In London, this included a call for the Mayor to assemble and sell developable land and encourage investment in the burgeoning ‘build to rent’ sector, which sees developers retain ownership of newly built rental homes.
According to the survey, Greater London is the most favoured area for planned investment, with a combined three quarters of respondents saying their company plans to either increase (53%) or maintain (23%) investment levels in the next 12 months. This is ahead of other regions such as the Midlands, where 60% expected to increase (33%) or maintain (23%) investment; North West England, where nearly half expected to see increased (25%) or maintained (23%) investment; and Scotland, where under a third of respondents expected increased (16%) or maintained (16%) investment levels. For a full list of regions, along with other findings, please see the link below.
Melanie Leech, chief executive of the British Property Federation, said: “The real estate industry is a vital contributor to the UK’s economy and crucial to bringing about regeneration and growth across the country. It is therefore welcome to see that sentiment over the next year is positive.
“Wider economic circumstances and political uncertainty are outside of our control, but there are a number of things that Government can do to ensure that the outlook remains bright. The next London Mayor has a clear mandate from the industry to assemble and sell public sector land, if they really want to boost development early on in their tenure.
“It is good to see that investment is flowing into all parts of the UK however, and not just London and the South East. We hope to see this increase as devolution deals continue to be rolled out across the country.”
Peter Vernon, chief executive of Grosvenor Britain & Ireland ,said: “The findings are a reminder of the real estate sector’s willingness to invest in the UK’s long-term economic future. The sector’s ability to boost supply will rest in part on Government lowering the policy barriers. In London, getting more developable public land to the market and unlocking new rental homes to meet growing demand will be key to success.”