The RICS 2011 UK Commercial Market Survey highlights that moderate increases in both occupier demand and availability took place during Q2. However, rental value expectations remain negative at the all property level, albeit only moderately.

Confidence is still subdued but the level of property viewings and offers received does continue to increase. The availability of bank/debt funding for new lending rather than regearing still seems to worsen and for the commercial property market and in particular development the supply of new premises will cause a quality shortage over the next 18 months to two years.

Industrial property stock of reasonable quality is starting to diminish with improved demand form manufacturing companies; demand for good quality freehold property is improving especially in the pension fund markets.

The office market is patchy but demand for small suites on flexible terms especially for new and fledgling business is gaining momentum especially in the nicer established locations. For example at Hagley Hall another series of lettings have been agreed to diverse companies from cup cakes to interior design and construction.

The level of activity in the housing market remained subdued, and had softened further in some areas. The Bank of England Agent’s summary for July says, “There were a number of reports of an increase in caution among prospective buyers, and of a rise in the number of mortgages being withdrawn at a late stage in the transactions process.” First-time buyers continued to find it difficult to secure funding. But weak demand from would-be owner-occupiers had supported rents in the lettings market, which continue to attract buy-to-let investors. Developers and builders are more active and we have agreed a number of small land sales (for 5 to 10 houses) – we are yet to see new construction but this will only be the case for a short while.

The bigger national house builders are also very active in our area looking to plug there land banks for the inevitable up turn – but we would need a crystal ball to see when that might be – next year maybe of 2013 – still very hard to judge !!
 

Alan K Knight FRICS Head Of Commercial Walton and Hipkiss – Stourbridge   01384 397 797