Property’s confidence in the UK economy has “dropped significantly”, according to a survey by Grosvenor Britain & Ireland and the British Property Federation.
Confidence in the UK’s economic prospects in the next 12 months was down by 55% on the previous year. Data from the survey of 112 BPF members found 33% expressed confidence in the country’s economic prospects compared with 88% of those polled for the previous year.
Of those surveyed, 67 were property owners and 45 were advisers. The poll was conducted in November and December.
Confidence in the property sector’s own performance in the coming year has similarly fallen, from 88% in the previous survey to 40% this time round.
Uncertainty caused by EU exit negotiations was believed to pose the greatest challenge to the health of the sector in the next 12 months. More than four-fifths (87%) of property industry advisers polled believed this uncertainty would be the top challenge to the sector as a whole.
Craig McWilliam, chief executive of Grosvenor Britain & Ireland, said confidence to invest would “require strong signals from government in the short term that the UK remains open for business”.
While plans for new investment in 2017 remain comparable to last year’s results with similar levels of gearing, a smaller proportion of those polled believed their company’s financial performance would be better in 2017 than 2016 (45% compared to 66% last year). Appetite to expand development activity was also significantly lower (42% planned to increase development activity compared with 60% the last time the survey was conducted).
However, an increased proportion of BPF members surveyed (59%) remained confident about the UK property sector’s prospects for the coming five years.
BPF chief executive Melanie Leech said: “The decisions that will ensure the infrastructure for a strong UK economy in the future need to be taken now. There is much the government can do to give confidence to investors – by demonstrating its commitment to working with us in partnership, by maintaining a fair and stable tax system and ensuring an efficient planning system.”
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