Around four out of 10 (42%) real estate professionals expect inward UK investment and development activity to remain level or increase in London, compared to almost two-thirds of those surveys (64%) just six months ago.
According to the autumn edition of M3 Consulting’s London Development Barometer survey, which canvassed the views of 150 UK-based real estate professionals, 63% believe the global economy will have a negative impact on development activity, while 57% believe global politics is weighing on activity. These figures were 52% and 48%, respectively, six months ago.
More than three-quarters (76%) cited Brexit as a key driver of slowed development activity, while a considerable eight out of 10 surveyed (80%) said the UK government was has caused inactivity. This marks an unwelcome hallmark of two consecutive years for which the survey has reported dissatisfaction with the UK government at 80% or higher.
The survey also revealed increased expectation for greater social and affordable housing in London with 85% of professionals surveyed expecting as such, up from 74% earlier this year. Retail continued to decline in the industry’s expectations. Some 86% of those surveyed anticipate a decrease in development in this area, down from 79% in the spring and 41% two years ago.
Richard Hollingworth, director at M3 Consulting, explains:
“London has enjoyed a sustained if somewhat unexpected level of investment and market demand for a couple of years. That confidence is wavering with persisting Brexit uncertainty. The results again show the industry wants certainty – whether that’s within the EU or some form of a new normal – and for the governments to return their attention to practicalities like improving town planning processes.”