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Insight & Opinion

How will the result of the general election affect the commercial property market?

Author: Gemma





The Conservative majority in the 2015 general election has boosted confidence in the UK’s residential property sector, but how will the result of the general election affect the commercial property market?

The UK’s commercial property market kicked of 2015 with a strong start. According to research from the Royal Institution of Chartered Surveyors (RICS), Q1 2015 witnessed a 46% rise in demand for opportunities in the commercial market. This is the strongest growth seen in the sector since 1998.

It is thought that economic growth and confidence in the business market has helped the sector to achieve strong rental returns.

The UK’s commercial property market has also attracted the attention of overseas investors, with 34% of all enquiries made in Q1 2015 made by international investors, up from the 17% recorded in Q4 2014.

The Conservative majority

It is thought that the surprise Conservative majority will have a positive effect on commercial property.

Property experts have suggested that now a party has been elected, the UK’s economy will continue to experience growth, which will in turn see companies increasing their office and commercial spaces.

Research from Savills has shown that, in a time of economic uncertainty in the run up to the general election, £17 billion was invested in Q1 2015. Savills suggests that this bodes well for the market and suggests that the UK’s commercial property market will continue to see rising investment throughout 2015 and 2016.

“There is good reason to now suppose the UK economy, that appeared to slow in the run-up to the election, can now resume a strengthening recovery. This will be good news for both the commercial leasing and investment markets,” James Roberts, chief economist of real estate firm Knight Frank, commented.

Head of UK research at CBRE, Miles Gibson, agrees with this sentiment and has stated that the country should experience low inflation, strong growth and continued employment growth which will add to activity in the commercial property market.

It would seem that the result of the UK’s general election will have a positive effect on the UK’s commercial property market, with industry experts forecasting a positive outlook for the remainder of 2015.

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