The commercial markets have been “largely unmoved”, says Mat Oakley, Savills head of European commercial research.
Indeed, the market has just recorded its strongest quarter in the last 15 yers, with investment volume in Q1 2015 reaching over £17 billion, while central London’s turnover was 28 per cent higher year-on-year at £3.1 billion, just over 60 per cent of which was from non-domestic buyers.
“The perception that the UK is still a strong and stable investment destination has continued to intensify and non-domestic investors have widened their focus to include markets outside London,” adds Oakley. “The first four months of 2015 have seen £5.4 billion of non-domestic purchases of commercial real-estate investments outside London, nearly half the total volume that was seen in 2014 (which was in itself a record year for non-domestic investment outside London).”
“With such a slim majority it almost feels like we’re ‘back to the 90s’ but the overall economic outlook remains favourable,” comments Miles Gibson, Head of UK Research at CBRE.
“Strong employment, low inflation, low interest rates and high levels of inward investment all bode well for the property sector.”
Despite the overall positive mood, though, there are lingering concerns surrounding the promised referendum on the UK’s relationship with the EU, which could have significant consequences for the UK business and financial industry.
“An EU referendum if it were to lead to the UK leaving the EU, would have a damaging effect on London’s attractiveness to US and Asian businesses who are looking for a European HQ,” says Savills.
“Even though we think the PM would campaign for an “in” vote and would ultimately win, the sooner the new PM can resolve this issue, the better,” adds Gibson.