Britain’s regional recovery is underway with 88 per cent of property professionals expecting their assets to rise in the next six months — compared to just 10 per cent this time last year.
And confidence is highest north of the border, claims the twice yearly Commercial Property Confidence Monitor, with Scotland seeing the biggest turnaround. Ninety per cent of its small and mid-sized firms anticipate an increase in market activity, a ten-fold jump from the same point in 2012.
The figures are the highest since the property monitor was launched in 2010 with the regions showing equally well. In the South West 86 per cent of businesses were optimistic about the future, followed by the North West at 77 per cent and the Midlands at 75 per cent.
The Lloyds Bank survey, which questioned 500 real estate professionals, showed that overall 80 per cent of major businesses were actively planning for the future with 63 per cent expecting to increase their investment commitments during the first half of next year.
“The UK market in 2013 has been stronger than many expected it to be. “It’s becoming an increasingly competitive environment for developers and investors as well as the banks.
“The huge upswing in confidence among fund managers in the past year is perhaps the most significant bellwether yet of the market’s recovery and, with a majority of large businesses looking to invest more, the momentum is continuing to gather pace,” said John Feeney, of Lloyds Commercial Banking.
Among smaller businesses the response was markedly similar. According to the latest CPCM, 69 per cent of small and mid-market enterprises in the commercial property sector expected an improvement. Fifty-nine per cent believed their portfolios would perform better in the months to next June with 51 per cent confident of an asset rise.
Mark Ellis is head of property, SME Banking, at the Lloyds Banking Group. He believes, “the recovery has now started to trickle down from the sector’s major players with SMEs catching the infectious confidence flowing from the top end of the market and London”.
The research also showed London, Manchester and Birmingham as the top three destinations for investment over the coming months. Respondents across the board could see a residential and commercial investment boost from HS2, the new high speed rail link between London and Birmingham.
Responding to a question about factors that could threaten the real estate sector’s recovery in the regional markets, the biggest concern is local planning policy.
“Our clients tell us that while the National Planning Policy Framework has done a great deal to correct the errors of the past, it can still be unnecessarily cumbersome,” said Marty Green, at Lloyds Commercial Banking.
“Confidence is such an important factor in the market, so with sentiment now stronger than it has ever been since we started the CPCM research, it’s important that any possible barriers to growth are examined carefully.”
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