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Lending to commercial property (May.)

After falling sharply in April, net lending rose in May. We think this can be explained by the extension of payment holidays rather than an increase in new loans. Further ahead, we expect a weak recovery in investment activity and, as the economic recovery gathers pace, we think banks will be less willing to grant further forbearance, so net lending will turn negative again.
Prohad Khan Property Economist
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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

UK Commercial Property Update

Stretched consumers to cut back on leisure spending

As the cost-of-living crisis bites consumers will be forced to cut back on discretionary spending, with the leisure sector set to suffer as a result. At the same time, operators are facing shortages of labour and rising costs. We have therefore cut our rental value forecast to a 1% fall this year and no change in 2023.

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.

2 August 2022

More from Prohad Khan

UK Commercial Property Update

South East office rents still have further to fall

Although we expect the economic outlook will continue to improve, we think that South East office rents will still edge lower this year. What’s more, we don’t expect much of a rebound in 2022, as a shift to remote working will continue to weigh on demand.

7 July 2021

UK Commercial Property Update

Weak starts to limit construction after 2021

We think that delayed Central London office projects and new industrial starts will drive commercial construction output this year. But once the backlog of delayed projects has been exhausted, we think structural factors and high costs will deter developers from building new projects further out.

24 June 2021

UK Commercial Property Update

Can urban logistics fill the void in cities?

The acceleration of structural shifts is likely to result in some conversion of retail and to a lesser extent office space to urban logistics use. However, we think these conversions will be relatively limited given the significant shortfall in values between existing uses and industrial.

9 June 2021
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