Deals conclude in the regions but too soon to call it a trend, says Colliers
The latest property snapshot from Colliers International has shown that despite deterioration in the UK economy, UK property markets while lacklustre are generally stable.
Confidence is the missing ingredient, but when it returns markets could turn very rapidly.
London remains the focus by value and foreign investors remain the moving force. Although quite a few deals were concluded in the regions in July, it is too soon to call it a trend.
Retail sector trading remains tough; the Olympic effect appears to have supported online sales and footfall was down on UK high streets.
Markets remain sluggish, despite numerous large requirements, but completions are very likely later in the second half of 2012 when further and substantial localised rental growth is expected.
The market is stable, but vulnerable. Foreign demand for London properties worth more than GBP2m is being impacted substantially by the new stamp duties.
Walter Boettcher (pictured), director of research and forecasting at Colliers International, says: “The ONS first estimate of Q2 12 GDP growth was -0.7 per cent q/q. Some question the figure, but weak tax receipts support the data. Markets were unmoved, focusing instead on the eurozone. The latest UK purchasing manager indices suggest that Q3 12 is not off to a good start; composite indices are consistent with growth of -0.3 per cent q/q.
“The Bank of England added the Funding for Lending Scheme to its policy toolbox which already includes base rates, quantitative easing and the Extended Collateral Term Repo Facility. Economic stagnation is undermining the government’s fiscal austerity plan. The government remains committed to ‘Plan A’, but a substantial policy shift is likely in the autumn term and may mean a slowing in the pace of austerity."
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