Monthly Commercial Blog 

Well Mr Osborne has sat down again having shown off his new bag – but little to excite us – maybe yes / maybe no!!

There are signs of market improvement both commercially and residentially and although not getting carried away industry response is muted but positive. The government have announced a raft of reforms in the planning and building, which are bound to stir up consternation in some circles.

These include a new presumption that development should be permitted, unless the local planning authority can advance a compelling reason why they should not – this inverts the current decision making process where the developer / owner has to argue the merits on a scheme by scheme basis.

Also planning decisions must be made within 12 months and Local Authorities can no longer favour Brownfield sites over other pristine sites, although green belt continues to be protected.

There will be lifting of all restrictions on small modifications and additions to existing developments, this will no doubt please some of the bigger retailers as it will be easier to change the use of existing buildings, for example industrial to residential.

Finally a carrot for the local authorities along with a stick, in that they may have the ability to auction- for the benefit of the council taxpayer – the planning consents on parcels of land in their ownership.

This is potentially good news for a depressed, but improving, property market and may lead to a massive increase in development, both in the commercial and residential markets. They capture something the Treasury has believed for years, that the growth and competitiveness of the UK has been stifled by building restrictions. And a final thought the Government intend to bring back Enterprise Zones, something we have seen before in this area, namely Merry Hill!

Wendy Evans-Scott, President Elect of the NAEA (National Association of Estate Agents) said: “The review of Stamp Duty, for which we have long-campaigned, is a positive step and we believe the Chancellor is right to address planning laws and change of property use. However, without the ability to overcome the substantial capital barriers that are currently restricting property ownership, the market will stagnate in 2011. Such stagnation has wider implications for the economy as it restricts the flexibility of the workforce and the ability of families to own the homes they need as they grow. Encouraging first time buyers back to the market is an important first step, but it is just that – a first step on a long road to recovery.”

According to the Bank Of England Summary of business conditions “Activity in the housing market had been quite volatile during recent months. Lately, some contacts had reported that activity in the housing market had picked up somewhat. There had been a small rise in visitor numbers to newly built property, which was thought to have been helped by the increasing availability of financing products offered by homebuilders themselves. And enquiries and viewings had increased in the secondary market. But first-time buyers continued to be hampered by a lack of mortgages at high loan to values. And there had been a rise in cancelled transactions, due to concerns among buyers about further falls in prices, and disappointment with surveyors’ valuations. The rental market remained buoyant.

Business investment intentions in the manufacturing sector pointed to solid growth in capital spending over the next twelve months. New investment was being driven primarily by expectations of further increases in demand, particularly among exporters, with reports of investment in additional capacity becoming more widespread. Investment intentions in the service sector pointed to a more restrained pace of growth than in manufacturing.. The pace of expansion of several large retailers had started to slow and that was now detracting from the rate of aggregate investment growth. And budget hotel and restaurant chains were expanding capacity.

Walton and Hipkiss are seeing good levels of activity now in both office and retail lettings and sales across the town, Hagley and North Worcestershire, with manufacturing output now reported to be increasing along with exports gives a firmer foundation for business growth next year.Hagley Mews at Hagley Hall has seen some considerable take up with 5 new office lettings agreed in the last month alone, and a good number of transactions completing on proeprties which have been available for some considerable time. We are even seeing competing bids on some commercial propoerties, a site we have not seen for a few years.

More locally in Stourbridge very positive news after the Local Authority grants planning permsiion for the new proposed Tesco store and retail ddevleopment on the site of the Crown Centre and multi storey car park. We are told they intend to start work this year with a teget opening date by Christmas 2012. A much needed multi million pound investment in the retail offer in the town and welcome news to some retilers looking forward to a surge in visitors to the town and an opportunity for a major facelift to the area.

So Spring has come the sun is out – let us hope for some real change in the markets.
 

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