Commercial property growth slows while residential grows

August 4, 2017 10:35 am

typical investment potential

News from across the property and construction sectors.  Growth is slowing due to economic uncertainty, particularly in the private commercial sector.  Investment is generally being held back although there are a few exceptions.  Notably, the residential market contrasts from the norm, buoyed by both new optimism and financial incentives.  What’s more Ashfield and Mansfield seems to be outperforming the market in a number of key sectors.

Private commercial sector growth slows

The results are out from the RICS UK Construction and Infrastructure Market Survey for Q2 of 2017.  This clearly shows that workload growth has slowed across all sectors of the construction industry.  And most sharply in private commercial.  Many respondents reported that uncertainty regarding Brexit was weighing on investment decisions.  In addition, the political turmoil generated from the general election was hampering growth ambitions.

The most significant easing of activity was in the private commercial sector.  Here, 21% more respondents saw their workloads rise rather than fall in Q2, down from 31% Q1.  Just as worrying, is the slide in profit margin expectations from 18% to 8%.  Respondents also expect greater price pressures on tenders, as in Q1.  The more uncertain outlook for the economy overall has led to a less optimistic outlook for the sector.  Even so, 44% more contributors expect activity to rise rather than fall, down from 53% in Q1.

Financial constraints are considered the most significant impediment to building activity, at 79% (up from 70% in Q1).  This represents the highest reading in four years.  Economic uncertainty, largely driven by Brexit and subsequent election result, was identified as the primary cause.

Of the other market sectors, expectations for infrastructure workloads are broadly unchanged. The strongest output growth is predicted for roads, rail and energy.  In the Midlands and East Anglia, activity has been boosted thanks to a surge in infrastructure.  However, respondents in other parts of the UK report a workload fall.

29% of contributors continue to report a rise in private housing activity, and expectations remain positive.  Despite the slowdown in growth, skills shortages persist. 55% of contributors report these as a growth constraint, notably for quantity surveyors and bricklayers.

Rippon Homes

A new development from Mansfield-based homebuilder Rippon Homes is providing over £357,000 in community contributions in Tibshelf.

Work commenced last month at Cavendish Gardens on Doe Hill Lane.  Already 37 of the 57 homes have been bought off-plan by keen home hunters.  Furthermore, Rippon Homes will be providing some £275,000 for education and over £43,000 for children’s play areas within the parish.

Ian Dyke, Managing Director at Rippon Homes said: “Cavendish Gardens is the ideal development for families.  Homebuyers will therefore be pleased to know that we are supporting education in Tibshelf to benefit local schools.  Play areas are important in supporting a child’s development and aiding their learning experiences. Our contribution towards children’s play areas will also benefit the schools, as well as local residents.”

Rippon Homes will also contribute £10,000 towards public art and over £27,000 towards the maintenance of the local parks and play areas within the parish.

Ian further commented: “We believe in the importance of supporting local areas wherever we build a new development.  Tibshelf is a beautiful small village which we are proud to contribute towards.”

Ashfield and Mansfield

Against this national backdrop, it seems that Ashfield and Mansfield is outperforming the market.  The are is currently enjoying a high level of interest – from both occupiers and investors.  Read more.  Why not contact us or perform your own property search?

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