Most property traders say hopes of base rate cuts are boosting market optimism however they’re unworried by UK political change and international geopolitical uncertainty.
This is in keeping with the newest Handelsbanken Property Investor Report which reveals that tenant stress is beginning to ease
The report, based mostly on unique insights from UK property traders with a mean of 35 properties every, discovered greater than half (52%) say the prospect of a rate reduce in August and probably an extra reduce earlier than the tip of the yr makes them extra optimistic in regards to the market.
That is partly mirrored within the easing of indicators of tenant stress – round 53% of these questioned reported points of rental deferral / contract negotiations, in contrast with 60% in Handelsbanken’s 2023 report.
The quantity experiencing overdue or late funds fell to 34% this yr in contrast with 41% within the earlier yr.
Despite the drop in reported tenant stress, void intervals have elevated. Some 60% of the panel reported a rise in voids, up from 54% within the earlier yr though Handelsbanken believes this can be partly pushed by tenant demand for high quality and EPC scores.
Polled ahead of the overall election, the panel mirrored wider market sentiment on the influence of a change in authorities, with the bulk (51%) saying it could not have an effect on plans for his or her enterprise. Around two-fifths (40%) stated geopolitical uncertainty made them extra optimistic in regards to the UK property market whereas 44% stated it had no influence.
Handlesbanken chief credit score officer Simon Bradley stated: “There is cautious optimism across the property market and exercise amongst current traders is choosing up. It could also be that many have determined the economic system has probably reached the highest of the curiosity rate cycle and that the time is true to have interaction in new offers.
“We are seeing many of our Handelsbanken property professionals already seeking to enhance their credit score strains in anticipation of potential acquisitions as market charges soften and property values stabilise over the approaching months.
He added: “The report additionally reveals indicators of tentative enhancements within the stress elements affecting tenants, which have been pushed in current instances by the associated fee of dwelling and vitality crises. However, most respondents seem unaffected by potential political uncertainty and don’t imagine {that a} change within the celebration in authorities will result in important adjustments available in the market.”
