Guy Garrard, head of business development at Tiuta, looks at the state of the commercial environment
It seems that someone has been going around pruning all the ‘green shoots’ of recovery as it emerges that we are no longer exiting the recession but are in fact still entrenched in the longest one since records began. According to the Office for National Statistics, the economy has shrunk by 0.4% in the last quarter and by 5.9% overall in the last year. It is the sixth successive quarter of contraction and leaves the UK in the grip of the longest period of continuous decline since 1955. This flies in the face of recent predictions that the recession was over and is even more galling when the UK’s major rivals, including France and Germany, are now officially out of recession.
The question is does this cast a further shadow over the mortgage market? To a certain extent the answer is inevitably ‘yes’, as any economic failings could spell even greater problems in regards to funding and credit.
However, it’s not all doom and gloom. We are seeing a few exclusive and semi-exclusive products creep back into the more mainstream and even specialist markets which is a positive sign. One specialist market that has suffered badly over the past couple of years through falling values and lending restrictions is the commercial property market but it appears to be finally enjoying a welcome resurgence according to recent statistics.
According to Investment Property Databank Ltd (IPD), commercial property values in the UK, Europe’s largest market for real-estate investment, have risen at their fastest pace in more than three years.
The value of offices, stores and warehouses climbed 1.1% in September from the previous month, according to an index produced by the London-based research company, which represents the largest monthly increase since June 2006.
Other new research seems to back up this new found positivity. A report from Savills suggests that increasing numbers of banks are willing to lend sums of more than £20 million to commercial property investors. The report identified 23 banks in the £20 million and over lending category.
Commenting on the report William Newsom, Savills UK head of valuation, said: “In March when we conducted our last survey