South West property businesses are planning to invest

Property businesses in the South West are maintaining a bullish approach towards investment opportunities, with a quarter (25 per cent) intending to increase their financial investments over the next three to six months, according to a recent survey by Lloyds TSB Commercial.

Whilst an intention to invest is positive news in an otherwise flat property market, overall the latest ‘Property Matters’ report found that small to medium sized property businesses in the South West are continuing to face challenges across the sector, including a lack of confidence around issues such as local planning policy, which continue to impact on appetite to invest.

The latest Property Matters report found that businesses in the South West reported a net reduction in confidence from +8.8 to +0.6 in the last six months. This is in stark contrast to the London property sector, where businesses reported an increase in overall market confidence to +15.

The report revealed 67 per cent of South West property businesses expect static values. This compares to 64 per cent of small to medium sized businesses nationally, which expect values to stay flat.

Residential lettings are set to remain strong, with over two fifths (42 per cent) of South West SMEs predicting that the market will prosper over the coming 3-6 months, compared to 45 per cent of SMEs nationally. Of these businesses 59 per cent of residential property businesses said they were expecting to see strong performance in residential lettings on a regional level, compared to 40 per cent of commercial operators.

More emphasis is also set to be placed on house build opportunities, with 40 per cent of commercial businesses in the South West planning to focus on this area of the market, compared to 31 per cent of all SMEs nationally.

Attitudes and confidence towards property portfolios in the region remained largely positive, 25 per cent of businesses are expecting things to improve. This is an encouraging sign and bodes well for future growth prospects over the next 12 months. Although, it is notable that no area of the country compares with London prospects, which saw a +27 point increase in confidence, largely on account of the number of cash rich, foreign investors being attracted to the capital.

Colin Vallance, senior manager, property for Lloyds TSB Commercial in Devon & Cornwall, said: “It continues to be a challenging time for those operating in the property sector in the South West. It is welcome news that a quarter (25 per cent) of SMEs in the region plan to increase their financial commitment over the next 3-6 months. The commercial sector and operators in residential also revealed an intention to invest for the future.

“SMEs continue to cite the challenging UK economy and local planning policy issues as influencing their decisions to invest. We continue to work closely with our customers and have a team of dedicated property managers focused on supporting and advising businesses operating in the residential and commercial sectors. 

“The ‘Lloyds Funding for Lending’ initiative aims to foster an environment where businesses can invest for future growth, whilst taking advantage of low cost borrowing. This will help businesses across a broad spectrum of industries, including those operating in the property market.”

‘Property Matters’ is based on interviews with financial decision makers in a range of property businesses in the UK, comparing confidence amongst those operating in residential, commercial and major businesses.

Property Matters is available to download from http://businesshelp.lloydstsbbusiness.com/industry-focus/property/property-matters/