Brexit is impacting the real estate sector as confidence in the performance of the UK’s real estate sector over the next 12 months has fallen
Brexit is having an adverse impact on the real estate sector in the UK as the sector is less optimistic for 2019.
This has been revealed in a survey by the British Property Federation (BPF) of its members, which include investors, owners, developers and advisers, suggests just 24 per cent feel confident about the year. The proportion of developers that intend to increase development activity in 2019 has also fallen. While in 2017, 62 per cent of those who responded to the annual survey said they planned to increase development activity, the figures have fallen by more than a third to 41 per cent in 2019.
Although, 91 per cent of the respondents believe that leaving the European Union will be worse for Britain’s economy over the next 12 months, many see things improving in the longer term. Fifty five per cent are positive about the long-term outlook and feel confident in the industry’s performance over the next five years. Forty one percent believe it will be better, while 16 per cent think it will make no difference.
The survey also found that 85 per cent of respondents don’t believe that the public trusts the UK’s planning system, while 75 per cent think the public don’t trust the real estate industry. Additionally, nearly half (45 per cent) feel the sector is not changing quickly enough to increase social mobility, inclusivity and diversity.
Chief executive at the BPF, Melanie Leech said the results should be taken seriously by politicians. They 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 town and city centres can thrive.
Craig McWilliam, chief executive of Grosvenor Britain & Ireland said whilst business strategy is being reviewed it appears ways should be sought to recast the industry’s contract with the public and civic leaders. Much of the industry’s ability to operate is founded in the public’s consent for development activity. If industry leaders think the industry, and the system that defines its work, are distrusted then they must work to rectify this. It’s also true to say that the benefits of new places are rarely associated with the actions of developers. So the industry must also better demonstrate and explain its value to society.