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Confidence in UK real estate falls

Words: Laura Edgar
Housebuilding / Shutterstock

Confidence in the performance of the UK’s real estate sector over the next 12 months has fallen.

A survey by the British Property Federation (BPF) of its members, which include investors, owners, developers and advisers, conducted with Grosvenor Britain & Ireland, suggests just 24 per cent feel confident about 2019.

Furthermore, the proportion of those in the property industry that intend to increase development activity in 2019 has fallen by more than a third to 41 per cent. In 2017, 62 per cent of those who responded to the annual survey said they planned to increase development activity.

Of the respondents, 91 per cent believe that leaving the European Union will be worse for Britain’s economy over the next 12 months. However, in the longer term many see things improving; 55 per cent feel confident in the industry’s performance over the next five years and are positive about the long-term outlook.

Over the next 10 to 20 years, 41 per cent believe it will be better while 16 per cent think it will make no difference.

The survey also found that 85 per cent of respondents don’t believe that the public trusts the UK’s planning system, while 75 per cent think the public don’t trust the real estate industry. Additionally, nearly half (45 per cent) feel the sector is not changing quickly enough to increase social mobility, inclusivity and diversity.

Melanie Leech, chief executive at the BPF, said the results should be taken seriously by politicians.

“They send a clear warning that development activity is at risk, and this will undermine the country’s ability to deliver the high-quality homes, offices and leisure spaces that inspire innovation and regeneration to ensure our town and city centres can thrive.”

Craig McWilliam, chief executive of Grosvenor Britain & Ireland said: “Whilst business strategy is being reviewed it appears we must also seek ways to recast our contract with the public and civic leaders. Much of the property industry’s ability to operate is founded in the public’s consent for development activity. If industry leaders think we, and the system that defines our work, are distrusted then we must work to rectify this.

“It’s also true to say that the benefits of new places are rarely associated with the actions of developers. So we must also better demonstrate and explain our value to society.”

Image credit | Shutterstock