By Nick Keable, Vice President UK Operations, The Saint Consulting Group
2011 is going to be a very interesting year for the property industry here in the UK.
Several issues are going to bite.
The UK economy within Europe – With the Euro zone looking decidedly shaky, fresh from the massive bailouts of Greece and Ireland, and with Portugal and Spain hanging in the economic wind, if you are a European property investor, the UK and the British pound will inevitably look like a safer haven for your investors’ cash; particularly as the threat of the endlessly talked about ‘double dip’ is fading fast.
The UK property market – With income down, and still no serious debt finance to speak of, it has meant that development activity has been historically low in recent months. With the UK market looking up, albeit tentatively, this should be the year when good quality, selective development activity begins to return.
The UK Government agenda – The new Coalition Government has a radical agenda for planning reform. It is a very mixed bag, and the fear is that it will make an already glacial approval process even easier for the NIMBY brigade to further frustrate development activity.
Residential woes – The hiatus in demand is just that. With banks right now requiring an average 26% mortgage deposit, most have been priced out of the residential market. At the same time on the supply side, all the Coalition Government changes to date have further weakened supply. Whilst all this points to a horribly unsustainable boom market when the banks ease their lending criteria – 2013, 2014, can anyone help on that prediction? – 2011 looks very subdued, and that for an economy where housing has always been a very major factor.
The UK rollercoaster continues. Having hit the bottom, we are now half way up the next incline. No one should take their seatbelts off just yet.
Nick Keable is vice president of UK Operations, The Saint Consulting Group, email email@example.com, phone +44 207 592 7050