All quiet on the built environment front

Mmm. Fridays – and Mondays, for that matter – are awfully quiet on the press release front these days. A cynic would say the lack of correspondence mirrors the new Tuesday to Thursday work from office trend (let’s not kid ourselves that everyone is burning the candle at both ends on Mondays and Fridays when working from home). But could it also be that there is no longer the same volume of activity on a Friday or Monday that there once was?

I cannot recall a quieter Christmas and New Year period. Normally, the end of the year resembles the football transfer window as everyone scrambles to get deals over the line by 31 December (those dealing with clients who don’t observe Christmas sometimes even having the pleasure of working on 25 December). Not so in 2022, and so far, 2023 hasn’t been much busier.

Every Friday, I think this will be the week things pick up, but they don’t, and despite the economic forecast improving from deep recession to shallower downturn over a longer period, and recently to shallower downturn over a shorter period, the experts have not exactly been enthusiastically talking the market up. That may be because in many sectors, values still have further to fall – a lot further in some instances.

At the recent ‘2023 property forecast’ dinner debate I chaired, hosted by Blick Rothenberg, the focus quickly turned to development land prices. The expectation among the guests was that prices could fall by anything from 10% to 50% this year.

Who would look to buy if that’s the case? With the market already weak, who would look to sell? Many would continue to sit on their hands, predicted Related Argent partner Robert Evans. “There are an awful lot of people who will just go: “Can I afford to sell at that price? No. I’ll just find some way of playing keepy-uppy with it.” And they do.”

There was, however, hope of an improvement in market conditions and uptick in activity mid-year. Homes England chair Peter Freeman noted: “When you get a downturn, rents tend to fall and the yield tends to go out, so it’s a double whammy. You only need one to come back to make a profit.”

SAY Property Consulting founder Debra Yudolph added that she had already observed a shift from “a fear of f***ing up… to a fear of missing out”. People also agreed that there were significant pockets of opportunity, such as the build-to-rent sector and student accommodation (although the jury was out on the “overhyped” life sciences sector).

Even the LSE’s Professor Tony Travers was upbeat. “Unless some other fabled ‘black swan’ event happens, I would say the future looks curiously attractive and I’m the world’s most pessimistic person,” he remarked.

Curiously attractive it may be, but fortune favours the brave – and there seems to be a curious lack of bravery right now.

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