Yorkshire property businesses reveal sharp uplift in sector confidence

PROPERTY businesses in Yorkshire are responding to a resurgent housing market and are more positive about the growth of sector activity in the next three to six months, with industry confidence at its highest level since 2011, according to a new report.

The latest Property Matters survey from Lloyds TSB Commercial Banking revealed that 57% of small to medium sized property businesses in Yorkshire are confident that the market is recovering and that they will see an uplift in activity.

This contrasts heavily with the flat market conditions reported by firms six months ago.

The report also reveals that with encouraging attitudes and confidence in the growth prospects of the sector, a third of businesses in the region have increased their overall investment plans for the next three to six months.

The positive attitude amongst local property SMEs has resulted in a significant upturn of confidence in the region since last summer, up from +1 to +36.2. SMEs in Yorkshire predict that their portfolio will exceed performance expectations, with half expecting an improvement as economic conditions recover.

The significant growth seen in the residential sector in the past six months is generating a renewed sense of optimism in SMEs, with the latest RICS figures showing an increase in the number of house sales.

Firms are capitalising on this market growth, with the ‘Property Matters’ report showing that residential lettings remains the region’s strongest performing sector, with more than half (52%) of Yorkshire property SMEs focusing their attention on this area.

Industry priorities are responding to growing consumer confidence, with more than a third (35%) of local firms favouring housebuilding as the next best performing sector, overtaking out of town retail.

The investment intentions of some businesses in Yorkshire have been altered by the announcement of the proposed HS2 route.

The Property Matters report shows that 11% of property SMEs are now more likely to invest in residential real estate along the proposed route, with six per cent of firms looking to increase their portfolio of non-residential property next to the intended route. The impact of the HS2 route is more muted in Yorkshire compared to London, where a quarter of SMEs are more likely to invest in property along the planned route.

Ken Davies, relationship director at Lloyds TSB Commercial Banking in Yorkshire, said: “Confidence in the property sector is growing and is at its highest levels since our inaugural Property Matters survey was conducted in 2011, with a resurgent housing market encouraging confidence for SMEs throughout Yorkshire.

“As a result it is encouraging to see that 57% of the region’s businesses are predicting an uplift in activity across the sector, with increasing consumer demand for new build properties helping to drive growth in the residential market.”