Rental market continues to struggle despite Brexit bounce, survey suggests
The rental market will continue to feel the squeeze even after a boost from the effects of greater clarity around Brexit, a closely watched survey has showed.
Landlords are struggling in the face of poor demand and the market is unlikely to turn around, according to a survey by the Royal Institution of Chartered Surveyors (Rics).
The chartered surveyors who responded to the study said they expect rents to rise modestly across commercial property in the UK. But while there are indications that greater clarity on Brexit could spur activity that had been put on hold, the retail market is likely to stay in a downturn.
One chartered surveyor said: “Outside of London the commercial market is dangerous. It is very difficult to find tenants in many secondary commercial office and retail locations, rents are dropping to try and improve take up. Affluent micro economies like Rochester are thriving. Places like Crewe or Clacton on Sea are very bad.”
A majority of those asked think the market is in a downturn. However, this majority narrowed from the last survey in the third quarter of 2019. More people also said they think the market is in an upturn.
And rents for industrial and office space are expected to rise in the next 12 months, Rics said.
“Expectations appear to have strengthened in the office and industrial sectors following the decisive outcome of the general election, with markets in prime locations in particular seeing projections for capital value and rental growth revised higher,” said Rics economist Tarrant Parsons.
“That said, this improved sentiment has not found its way into the retail sector, where the outlook remains just as downbeat as before.
“Given the continued rise in retail vacancies and sharply falling demand, any change in fortunes across the sector still seems to be some way off. In the meantime, further downward adjustments in rents and capital values are expected both in the year to come and further ahead.”