Filtered by Subscriptions: UK Commercial Property Use setting UK Commercial Property
Economic headwinds and shortages to weigh on activity in the near term The latest RICS survey indicated that activity in Q4 and the outlook for the short term were broadly unchanged. The survey also suggested that labour and material shortages will …
3rd February 2022
Net lending defies Omicron fears in December A marked jump in lending to standing property resulted in total net lending reaching its highest level in just over 18 months in December. Although this is encouraging, several challenges remain during the …
1st February 2022
Omicron deals a blow to office and retail demand, while industrial surges The spread of the Omicron variant took some of the steam out of the property recovery in Q4 2021, but the latest RICS results are consistent with further growth in 2022. They also …
27th January 2022
Credit availability to remain good, but mortgage rates to rise The Q4 credit conditions survey suggests that, while credit conditions will remain loose, scope for lenders to absorb further increases in interest rates into their margins has run out. A …
13th January 2022
PMI dips as Omicron and supply constraints take hold The construction PMI declined last month to end the year on a negative note, more than erasing the gain made in November. Despite tentative signs that they are starting to ease, we expect labour and …
7th January 2022
Net lending reverses course as uncertainty grows Declines in lending for both standing property and new developments resulted in total net lending moving back into negative territory in November. The outlook is for credit conditions to remain tight in the …
4th January 2022
PMI points to improvement, as constraints fade slightly The construction PMI rose for a second-consecutive month in October, to its highest level since July. However, we expect continued labour and supply shortages to hamper output in the near term. While …
6th December 2021
Development activity rises sharply in October A drop in repayments and rise in development activity resulted in positive net lending in October for the first time since March. Despite this turnaround, credit conditions will remain tight and uncertainty …
29th November 2021
More upgrades to the consensus view, but heavily driven by 2021 The resilience of the commercial property market has led to further upgrades to the IPF Consensus view for this year, albeit still below our forecast. Beyond this year, we are more downbeat …
26th November 2021
Shortages continue to threaten recovery The latest RICS survey indicated that construction activity remained robust in Q3, while the outlook for the near term is favourable. Although we agree, we expect that building material and labour shortages, along …
4th November 2021
A modest improvement, but supply issues continue to bite Construction firms reported that activity strengthened in October despite higher costs and continued difficulty sourcing materials. The big picture is that until those constraints ease construction …
Rising repayments weigh on net lending Net lending to UK commercial property was negative for the fourth month in a row in September, probably due to a rise in repayments. We expect further repayments, caution when seeking development opportunities and …
29th October 2021
Office demand improves for first time since onset of pandemic Surveyors reported a continued improvement in occupier demand and investment enquiries in Q3, and notably the net balance for offices turned positive on both measures. That said, surveyors …
28th October 2021
Improving credit conditions may protect housing market from higher rates An ongoing improvement in credit availability may offset the increase in Bank Rate we expect in 2022. That offers support to our forecast that mortgage rates will remain low. A …
14th October 2021
Recovery in construction falters due to shortages The further drop in the construction PMI in September suggested that the recovery in construction has faltered amid a severe lack of materials and staff, spiralling costs, and softening demand. The drop in …
6th October 2021
Broad based decrease in net lending Net lending to property decreased for the third consecutive month in August, driven by falls in both lending for standing investment and development. Looking ahead, we think that tight credit conditions and the slow …
29th September 2021
Materials shortages restrain activity The further easing in the construction PMI in August was due to materials shortages rather than any softening in demand. The drop in the headline construction PMI from 58.7 in July to 55.2 in August suggested that, …
6th September 2021
Consensus could be surprised on the downside beyond 2022 The upgrades to the IPF Consensus views for this year still leaves them below our forecast. However, our more downbeat view on the outlook for offices because of the shift to more remote working …
3rd September 2021
Second consecutive fall in net lending as banks tighten on repayments The fall in July’s net lending total was the fastest drop since last July. As investment activity remained healthy and the economic recovery remains solid, it is likely that lenders …
31st August 2021
Recovery gathers pace, but may prove short-lived The latest RICS survey confirmed that construction activity rose strongly in Q2 and suggests expectations are upbeat about the outlook. But while we think output is likely to remain strong in the coming …
5th August 2021
Construction PMI dips, but underlying demand strong July’s construction PMI figure was slightly disappointing compared with the previous month’s highs. But it continued to point to robust activity and we think any dip is most likely a reflection of …
Office and retail pessimism eases, while industrial sentiment still buoyant Surveyors indicated that both occupier demand and investment enquiries improved in Q2 on the back of stronger industrial activity. Looking ahead, expectations for office and …
29th July 2021
Net lending falls sharply as repayments rise As the economic recovery gathers pace, lenders have been less willing to grant further payment holidays to landlords and a rise in repayments probably explains the sharp decline in net lending in June. Looking …
Easing lending conditions to support house prices A further easing of concerns about the outlook for property prices and the economy suggests that mortgage lending conditions will continue to improve. That will help ensure that house prices are resilient …
15th July 2021
Construction booming despite difficulty sourcing materials Despite a further deterioration in the availability of building materials, construction output rose at the fastest pace since 1997 in June. That suggests output in the sector is now well above …
6th July 2021
A surprise rise, but net lending is likely to fall again soon 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 …
29th June 2021
High materials prices fail to stifle strong activity Construction output rose further above pre-virus levels in May despite growing shortages of contractors and materials, and high cost inflation. The rise in the headline construction PMI from 61.6 in …
4th June 2021
Net lending expected to stay negative in the near-term We think a reduced willingness by lenders to allow for further payment holidays probably explains the sharp fall in net lending to property in April. Looking ahead, we expect subdued transaction …
2nd June 2021
Near-term upgrades at the expense of slower recovery in values later on While the IPF Consensus Forecasts saw notable upgrades for this year and next, t his comes at the expense of weaker performance in all sectors later in the forecast period. Despite …
28th May 2021
Construction activity stays strong, though growing signs of cost pressures Strong demand for new projects brought further growth in output during April, according to the latest construction PMIs. But there is also growing evidence of cost pressures, …
7th May 2021
Construction recovery well underway as optimism builds The RICS Construction Survey points to a rise in output at the start of this year, with the highest workload reading since Q1 2016. Looking ahead, respondents are more optimistic about the outlook but …
6th May 2021
Second consecutive rise in net lending but lenders to act cautiously We think the extension of payment holidays boosted net lending again in March. But as the economy bounces back in H2, lenders are less likely to allow for these concessions and we expect …
4th May 2021
Surveyors less downbeat about office and retail, more bullish on industrial The Q1 RICS survey showed that while occupier demand continued to fall, investment enquiries picked up, mostly due to rising industrial activity. Looking ahead, surveyors are less …
29th April 2021
Confirmation banks’ risk appetite is returning Robust house price growth and the prospect of a strong economic recovery have caused banks’ risk appetite to return. As a result, banks expect to increase the availability of high LTV loans and reduce …
15th April 2021
Strongest growth in construction activity since 2014 A broad-based strengthening in construction activity pushed up the construction PMI to a six-and-a-half-year high in March. Strong housing and logistics development will continue to support …
8th April 2021
Net lending to turn negative again despite February’s rise The increase in February’s net lending total was the first rise since September last year. We think this can be explained by the extension of payment holidays rather than a rise in new loans. …
29th March 2021
Construction sector’s strong innings resumes after rain delay The rebound in the construction PMI in February suggests that the dip in activity in January was due to heavy rainfall rather than any deterioration in demand. While residential activity …
4th March 2021
Weak start to the year Net lending remained negative in January and we think this is explained by weak transactions and renewed UK lockdown. Looking ahead, any recovery in lending to commercial property is likely to be slow. After all, the weak near-term …
1st March 2021
Consensus more optimistic after this year Though February’s IPF Consensus Forecasts were upgraded for 2021, we remain somewhat more upbeat on UK commercial property performance. Further ahead, our gloomier view for the office sector means that we expect …
26th February 2021
Further signs of optimism about construction activity this year The Q4 data showed a first rise in reported construction workloads since Q4 2019, albeit a modest one. With expectations more upbeat too, this could suggest activity has turned a corner. But …
4th February 2021
Star performance starts to fade The construction industry outperformed the rest of the economy in 2020 by being the first and only sector to see output recover to its pre-virus level. But the unexpected dip in the construction PMI in January suggests that …
Negative net lending likely to continue in the near-term In line with our expectations, net lending was negative again in December and we expect it to remain so in the coming months. After all, we think a weaker near-term economic outlook will restrict …
1st February 2021
Apart from industrial, the outlook for property values remains poor The RICS survey for Q4 showed that occupier demand and investment enquiries continued to fall. Though there was a slight improvement on Q3, this was largely due to the industrial sector. …
28th January 2021
Strong demand allows banks to maintain stringent lending standards Very strong demand allowed banks to maintain tight lending standards in Q4 2020 while still increasing mortgage lending volumes. Of course, buyer demand is likely to drop sharply when the …
21st January 2021
Construction continues to recover…for now The seventh consecutive construction PMI reading of over 50 in December mainly reflected a continued strong recovery in housing activity. The rebound in construction of commercial property has already all but …
7th January 2021
Negative net lending likely to continue in the coming months Consistent with soft investment activity and a return to more regular loan repayments, net lending was negative for the second consecutive month in November. Looking ahead, we think a weaker …
4th January 2021
No double dip in construction The rise in the headline construction PMI in November showed that the industry continued to recover even as overall economic activity probably contracted again. But builders’ optimism that this will continue for the …
4th December 2020
Net lending likely to remain negative in coming months Net lending turned negative in October. We think this can be explained by weaker investment activity and a return to more regular loan repayments after earlier payment holidays. Looking ahead, we …
30th November 2020
Outlook for 2021 deteriorates The latest IPF Consensus Forecast saw a marked downgrade to next year’s outlook. Although we expect values to decline next year too, we are less pessimistic when it comes to the size of those falls. Further ahead, our …
27th November 2020
Upbeat expectations to be short-lived While the RICS Construction Survey still points to a small decline in output in Q3, there was a marked improvement in the share of surveyors reporting a fall in construction workload. Expectations have become more …
5th November 2020