2 Feb 2018
Policy area: Brexit
Confidence that the Government will secure a successful outcome to Brexit negotiations is low amongst property leaders in the UK, according to a survey of investors, owners and advisors who are members of the British Property Federation (‘BPF’), published today.
Data from the latest polling of BPF members who belong to some of the country’s biggest real estate companies, conducted by BPF and Grosvenor Britain & Ireland (‘Grosvenor’), shows fewer than a third of those surveyed (29%) are ’confident’ the Government will secure a successful outcome to its Brexit negotiations, while 58% are ’not confident’.
At the same time, three quarters of these property leaders (73%) believe the uncertainty caused by EU exit negotiations poses the top challenge to their business in the next 12 months, up from 69% last year and ahead of seven other factors.
Two-thirds of those polled (65%) say that a two-year implementation period following the conclusion of Article 50 negotiations for the UK to leave the EU (‘Brexit’) will make it easier for them to manage their development and property businesses. More than two fifths (43%) of participants say that “continued access to skills and talent to help workforce planning” is the most important factor to the real estate industry, followed by “breathing space for the Government to develop a compelling plan for the UK economy” (17%).
The survey also shows that confidence in the UK real estate sector in the next 12 months has stabilised over the last two years, however it remains significantly lower than it was before the referendum (48% in 2017/18 vs 88% in 2015). Those polled are more likely to plan greater development activity and property investment for 2018 compared with 2017. Greater London returns to favour as a location where these leaders intend to increase investment in the next 12 months.
Confidence in the UK’s economic prospects in the next 12 months is up on last year’s sentiment but still significantly down on levels before the Brexit vote in 2015 (41% vs 87%).
Melanie Leech, Chief Executive of the BPF said: “It is heartening that confidence in the real estate sector is holding up, although uncertainty over Brexit continues to be the top challenge facing businesses this year. It’s also clear that a two-year implementation period to ensure we avoid a cliff-edge scenario in 2019 is hugely important and will support much-needed investment into the UK’s cities and towns. As part of this, we must retain access to the skills we need for construction and development, so that we’re able to build the homes where people want to live, the offices that will drive productivity and innovation and the places where people want to spend their free time.”
Craig McWilliam, Chief Executive of Grosvenor Britain & Ireland said: “The uncertainty of protracted Brexit negotiations, and the narrowing range of options, will continue to erode business sentiment in London and the UK this year, threatening both the real estate and other industries vital to our economic prospects. It’s vital our civic leaders do all they can to keep our great cities open for business, attracting the private sector capital, skills and innovation needed to support jobs and growth.”