New survey shows
The last six months has seen the London development industry formulate a more optimistic outlook on the future of development in the capital, according to the London Development Barometer. The overall picture, however, remains one of concern.
London-based development manager M3 Consulting launched the London Development Barometer in autumn 2017, which revealed subdued forecasts and a damning indictment of government, with 57% of the industry anticipating lower levels of development activity over the next five years and 86% believing that governments at a local and central level were not doing enough to enable development. Six months on, the figures stand at 42% and 82% respectively.
A few key takeaways from the survey include:
- 42% believe there will be less development activity over the next five years versus 33% who think there will be more. While a negative outlook overall, this reflects a drastic movement from 57% versus 19% respectively six months ago.
- 53% of the respondents believe that Brexit will either have no impact on, or lead to more inward investment from overseas, with 76% believing it will largely come from Asian investors. However 37% believe the volume of overseas investment will go down.
- 82% of the respondents believe that the central and local governments are not doing enough to enable London development activity, 11% of whom believe they are discouraging it.
- More than three-quarters (76.3%) of the respondents agree that construction skills and capacity will have a negative or significant negative impact on the London development activity in the next five years, slightly more than the 72.5% believe the same for Brexit
- Improving town planning policies remains the industry’s top priority for enabling London development activity.
Gavin Kieran, director, M3 Consulting, comments:
“It seems that the industry has processed and adjusted to the political and economic shake ups of the last two years. It is shifting into a more optimistic outlook with cautious overtones, while the pragmatism remains. It continues to call for more action from central and local governments on matters directly under their control that could enable development activity: town planning processes, funding, and stamp duty policies.”
In terms of industry breakdown of respondents, SMEs (up to 250 staff) accounted for 56% of respondents, with 44% from large companies (251+ staff). There was an average of over 19 years of experience and representation from all major property submarkets, including residential sales, build to rent, offices, retail, student accommodation and hotels.