Real Estate Outlook series
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Our conclusion
Overall, the key game changers in the real estate industry are indeed inflation, costs (funding and construction) and regulation.
Those within the real estate industry cannot quickly change their portfolio across the various sectors. The change of balance of their portfolio is only considered as a long-term strategy, but we are starting to see investors starting to look at considering either to substantially invest in a new sector or change the balance of their portfolio at margins.
The instability in the economy has hindered opportunities given that inflation is driving the properties prices higher as well as the construction costs; and banks are taking a more risk-averse stance, seeking more security which contributes to the increasingly unfavourable borrowing terms for those with the industry.
Although tax incentives like super deduction did not have any significant influence on decision making processes that were intended it seems property specific taxes such as SDLT, business rates and RPDT have had an influence of hindering the investment in the market. The real estate industry is still seeking greater support from government in the form of meaningful tax reliefs and other incentives as well long-awaited relaxation or reforming of planning systems.
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Outlook series
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