Growing confidence in property market

CHARTERED surveyors Eddisons has revealed growing confidence in the property market, compared to recent years.

The property firm, which is headquartered in Leeds city centre, reported that in a survey among its database of industry professionals, 75% have more confidence in the market than in 2012. Confidence compared to 2010 is even higher, at 85%, the firm said.   

There is also positive news for landlords and developers with more than 65% of those questioned predicting an increase in occupier demand and 58% expecting this to result in an increase in pre-let activity.
 
John Padgett, head of agency at Eddisons, said: “Today there are more cranes and scaffolding poles than the previous six years put together, demonstrating the emerging confidence.

“An increase in demand will see prices hardening in the short term along with a reduction in the incentives being offered, particularly on modern purpose built space, with resultant uplifts in rents.

“Demand is likely to manifest itself in a move towards Grade A space, which in turn will create a shortage. The reverse will be true of lower quality stock which is likely to come under pressure as occupiers demand better quality space.”

Opinion on the general economic outlook is also positive with three quarters of respondents to the survey feeling that the economy turned a major corner in 2013 and anticipate it to improve further throughout this year. 

Bank lending came in for criticism, with 56% of respondents feeling that there was no improvements in this area, or it had stayed the same.          

In an open question about Government policy aligned to the property market, Eddisons said there were overwhelming calls for changes to the business rate system and in particular concern over the postponement of the 2015 Rating Revaluation to 2017. This was ignored in the Chancellor’s recent Autumn Statement and means businesses are still paying rates based on rents before the crash in the UK economy in 2008/2009 and the necessary rebalancing is further delayed, Eddisons said.

Rod Edwards, director and head of rating at Eddisons, said: “Although the Autumn Statement contained some important changes for business rates, these are very retail biased. They do not take into account the many other struggling business sectors and the burden of empty rates liability remains fully on non-retail property.”

Stuart Hicks, managing director of commercial property consultancy Dunlop Heywood, said he believes the outlook for UK commercial property in 2014 continues to improve, driven principally by the strengthening UK economy.

“Challenges to business will develop as it tries to expand with economic growth within an environment of restricted lending. Many eyes remain fixed on the rent quarter days and particularly March 2014,” he said.

“Nonetheless, prospects vary by market and geographical location. Many of the statistics presented in the media are under pinned by the South East and in other areas such as the North East and Yorkshire the market remains fragile.

“Rents for offices in the South East are starting to grow as demand for office space increases and this trend is expected to spread to the ‘Big Six’: Manchester, Birmingham, Leeds, Bristol, Edinburgh and Glasgow.

“As with any period of change, there will be myriad opportunities to be grasped by those who are bold and decisive.”

 

 

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