Property predictions for 2010

THERE is no doubt that 2009 was a tough year for the region’s property sector, but will things get better in 2010? We asked leading figures from the North West’s property sector what’s in store over the coming months.

Peter Vinden, managing director of construction project management company The Vinden Partnership:

“It is never easy to call the bottom of a falling market but my view is that this has been and gone. There are now green shoots appearing all over our economy and although it will remain a buyers’ market for some time, banks are now lending and investment is slowly returning.



“I have complained and campaigned for some time to see an end to empty property rates. I remain convinced that this divisive piece of legislation has put a sword to many potential developments and the sooner we see an end to this vacant property tax the better”

Simon Dew, managing director of Cheshire-based Muller Project Management, part of Muller Property Group:

“The commercial property and development market continues to be severely restricted by the lack of bank funding which is obviously limiting not just development activity but also transactions for existing commercial stock whether these be occupier led or investment purchases.

“There are, however, signs in the market that certain institutions are starting to consider funding specific schemes that are viewed as lower risk, such as pre-lets with high quality occupiers for example, but there is still a long way to go before activity reaches a level that can be viewed as a sustained recovery.

“The key challenges over the coming months will continue to revolve around the ongoing lack of liquidity in the marketplace and the Government’s ability to stimulate bank lending.

“A key part of this process will be how banks deal with their distressed asset portfolios. With commercial investment values having fallen by circa 40% in many instances, there is still a vast amount of distressed assets in the system, which will need to be proactively worked through in order to provide financial institutions and borrowers with an exit strategy, once the recovery becomes more established.”

Tom Bloxham, chairman and co-founder of Urban Splash:

“The last 12 months have been the worst for commercial property in my career. I do think that there are signs of things picking up; sales enquiries are up, we’re Tom Bloxhamsecuring new lettings and sales but things are still a lot quieter than a couple of years ago.

“This does present a good opportunity, however, and I think that the next five years will present the best opportunities, certainly in my lifetime, for an entrepreneurial property company and I want to make the most of them.

“Vital regeneration must stay at the top of both political parties’ agendas. We must try and influence them that stopping fantastic regeneration work cannot be an option.”

John Walley, partner and co-founder of Drivers Jonas’ Manchester office:

“I think talk of green shoots is certainly credible, but their roots are in shallow ground. All the indications are that residential values are beginning to stabilise and that house builders are returning to buy land, albeit at very different levels when compared with the height of the boom.

“There are signs of improvement in the investment market with prime yields beginning to compress. The relative cheapness of the pound will help the UK attract investment from overseas.”

Kenton Whitaker, managing director of Seddon Homes:

“Seddon Group are developers and contractors, so we have quite a broad view across the sector. We know there are a lot of people sitting on their hands.


“It will be very interesting to see at what point the larger house builders restart their building programmes as their stock runs down – that will be a good indicator that they have inventory and cash back under control.  



“Two of the bigger challenges will be the ever-increasing burden of planning regulation (including CIL) and the upward-only revisions to building regulations – this will continue to suppress viabilities on schemes and make it progressively harder to get schemes off the ground in a weakened market.”

Mike Redshaw, director of property agent Nolan Redshaw:

“Both the commercial property and property development markets are at, or very close, to the bottom of the property cycle and both will be starting a recovery in the spring of 2010.



“Empty rates legislation is without doubt a disaster to the future health of the commercial property industry and needs to be rescinded as soon as possible.”

Peter Gallagher, partner at p3 property consultants:

“Wanting to do deals and talking about doing deals is not the same as actually doing deals, and perhaps there are still too many that don’t get that this is not a temporary situation – this is going to be how things are for some time yet.

“It may be a decade or more before we see another bull market and Darwin got it dead right when he said only those best able to adapt will survive.



“The key challenges are to be able to identify who is going to be equipped to be active in the next property cycle and who is not – separating the dreamers who haven’t really got that things have changed forever, from the doers who really understand what risk taking is going to mean in the future and how to price it sensibly.

“A piece of legislation that would have a wholly beneficial effect on the property sector would be to make the Government’s Prompt Payment Code, by which signatories commit to pay suppliers within their agreed terms of business, mandatory.”

Jonathan Mills, director of national investment and head of Jones Lang LaSalle’s Manchester office:

“Overall, our view is that we are seeing early signals of a positive turn in the UK commercial property market, although this is the start of a long process of recovery rather than the heralding of a steep rebound.

“Sadly, the much documented empty rates legislation continues to hinder and unfairly penalise our industry.”