Real estate industry leaders have slowed plans to increase development activity in the UK but the longer-term outlook is more positive, according to a survey carried out by the British Property Federation (BPF).
The survey, conducted by the BPF and Grosvenor Britain & Ireland, revealed that the proportion of property leaders intending to increase development activity in 2019 has fallen by 34%.
The survey, which polled 107 of the UK’s largest investors, owners, developers and advisors who are members of the BPF, stated that in 2017, 62% of the respondents said that they planned to increase development activity in 2018. For 2019, this has fallen to 41%.
The latest data revealed that while 91% believe leaving the European Union will be worse for Britain’s economy over the next 12 months, the longer-term outlook is more positive, BPF said.
Over a third (36%) believe the industrial sector will perform best in terms of financial return in the next 12 months, with 17% saying the same about residential, BPF said.
Melanie Leech, the chief executive of the BPF, said: “They [the survey results] 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.
”Confidence over the long-term in UK real estate remains strong, but the government must work in partnership with the real estate industry to overcome feelings of mistrust in development among the wider general public if we are to achieve our shared goals of ensuring successful, sustainable communities.”
Craig McWilliam, chief executive of Grosvenor Britain & Ireland, said: “The signals from our survey point to a challenging year ahead for the property sector. Macro-economic worries are impacting performance expectations, and with it our industry’s ability to deliver much needed new jobs, homes and better places.
“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.”
Source: IPE Real Assets