Property firms 'more positive about future'
SOUTH West property SMEs are expecting to invest despite wider market concerns, a new report says.
Small to medium-sized property businesses are more positive about the future of the sector than in 2011, with 36 per cent expecting an increase in market activity in the next six months, according to a report from Lloyds TSB Commercial.
The latest quarterly Property Matters report reveals a distinct contrast with last year's results, with property business owners in London becoming less confident in the UK market and regions such as the South West showing a slight swing towards optimism.
The report comes at a time when Lloyds TSB Commercial says its lending to UK property SMEs has risen by nearly nine per cent.
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But despite the slight increase in positivity across the South West, respondents were split in their opinions on activity in the region, with 19 per cent expecting activity to slow and 45 per cent predicting activity will stay at current levels.
This gives the region a net confidence score of +17.
The report looked at the confidence of SME property businesses throughout the UK based on their attitudes to investment and views of sources of funding.
It revealed that even though expectations for the regions have improved, property business owners are more cautious about the recovery of the UK market.
Fifty one per cent in the South West believe activity will remain static and the rest are split between improvement and decline (24 per cent each).
Colin Vallance, relationship director for Lloyds TSB Commercial in the South West, said: "While there is more overall positivity than 2011, the overwhelming message is SME business owners are not expecting a massive swing towards a vibrant market.
"This is not surprising with so many wider economic factors still in play.
"From a bank perspective, while it would be nice if this crucial sector of the property market were confidently expecting 2012 to be significantly better than the latter half of 2011, that isn't going to happen without far more tangible evidence of movement in the market.
"However, the slight swing towards a belief in an upturn in the market and the fact fewer people are predicting a decline is a positive sign."
He said positive lending figures also indicate there are businesses doing deals and investing in their portfolios.
But the number of businesses expecting the value of their portfolios to remain static is 68 per cent.
Mr Vallance added: "Predicting values is challenging for small businesses as they have seen the values of their assets erode in recent years.
"Whether the wider prediction of static values indicates they believe prices have bottomed out remains to be seen.
"What is clear is whatever decisions property owners take over the next six months will need to be made with caution and guidance to ensure their fragile optimism isn't overturned."
Property Matters is available to download: www.lloydstsb.com/propertymatters