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Lending to commercial property (Apr.)

Net lending to property rose sharply in April, after three consecutive months of easing. But the latest jump is most likely a once-off as we expect that credit demand will be dented by rising interest rates over the course of the year.
Pieter Du Preez Property Economist
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UK Commercial Property Valuation Monitor

Valuations worsen further, but may be bottoming out

Commercial property valuations worsened for the sixth quarter in a row in Q2, and for all-property is now the most overvalued since late 2007. But since the end of June gilt yields have edged back and we doubt they will match their previous peak over the next couple of years. With property yields also set to rise we therefore doubt that valuations will continue to deteriorate.

11 August 2022

UK Commercial Property Data Response

RICS Construction Market Survey (Q2)

The latest RICS Construction Survey showed a further rise in workloads during Q2, though sentiment for the next 12 months worsened slightly. With labour and supply shortages remaining a major concern and signs that rising interest rates are biting, we expect building activity to weaken in the near term.

4 August 2022

UK Commercial Property Data Response

S&P Global/CIPS Construction PMI (Jul.)

The fourth consecutive decline in the headline construction PMI took the index below 50 for the first time since January 2021. While driven by an idiosyncratic drop in civil engineering activity, the upbeat new orders and future activity balances look wildly optimistic. Bank of England Drop-In (4th August, 10:30 ET/15:30 BST): Join our post-MPC, 20-minute online briefing to find out why we think UK rates will rise by more than most expect, despite a looming recession. Register now.

4 August 2022

More from Pieter Du Preez

UK Commercial Property Data Response

IPF Consensus Forecasts (May)

The latest IPF Consensus Survey indicates that the outlook for this year is stronger than expected three months ago, though after 2022 forecasts were more pessimistic. Our view remains more downbeat than the IPF Consensus across the period.

27 May 2022

UK Commercial Property Valuation Monitor

Valuations worsen to post-GFC low

Commercial property valuations worsened further in Q1 and now look overvalued. The spread between property and gilt yields narrowed to its lowest level post-GFC, but still has some distance to fall to reach the lows of 2007. With more interest rate hikes on the cards and gilt yields set to rise further, we expect property valuations to worsen over the next 12 months. See how UK commercial property valuations compare with the US and Europe on our new CE Interactive dashboard.

10 May 2022

UK Commercial Property Data Response

S&P Global/CIPS Construction PMI (Apr.)

The construction PMI for April showed that building activity remained solid, but that the pace of growth has slowed. An easing in new orders growth also hints at a further slowdown ahead, as the sector faces supply constraints, intensifying cost push pressures and higher costs of borrowing. UK Housing Drop-In (10th May 10:00 BST/17:00 SGT): Economists from our property team are hosting a 20-minute briefing to explain why we think UK house prices are heading for a fall – and how bad the fallout will be. Register now.

6 May 2022
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