The East Midlands is the fastest-growing region in the UK so far this year, say latest figures – and it’s a region whose output is at its pre-crisis level. So, what does that mean for the local property market? Chris Sinclair says it’s good news…
So far the property scene in the East Midlands has been good and the figures give cause for real optimism for the remainder of 2014 and into next year. Coming into the new year, people felt that January was brighter than it was in January 2013 and this has continued to be the case – with increased activity that continued into quarter two.
The amount of stock transacted and level of activity is certainly moving in the right direction. In the Nottingham office sector, in the first half of the year, we saw a doubling of the amount of space sold or let compared to the first half of 2013. In office investment, the number of transactions in the first six months of 2014 was more than we did in the whole of 2013. This wasn’t a blip – this increase in activity is definitely set to continue.
What is happening in Nottingham is reflected across the wider East Midlands. Our regional economy has expanded by 0.9 per cent in the second quarter, adding to the one per cent growth in the previous three months which makes it the fastest growing region in the UK so far outside of London.
This level of growth of course has an impact on the property market as businesses expand, and others move into the region. It’s all good news and I am confident that we are settling back into the pattern which was broken when the world went ‘bang’.
There are the usual quieter periods of course around holidays, but outside of those times, we are seeing an increased level of calls and enquiries. As people return from summer holidays, we anticipate a renewed focus and increased activity as we head towards the end of the year
Of course, there are two things which could have an impact on the property market moving forward – rising interest rates and the General Election in 2015. Of course, Mark Carney told us that interest rates would rise – but I think this will be in small (0.25%) steps and should not amount to more than a total of one to one and a half per cent in the next 12 months.
Businesses may wait to see what the General Election holds and what colour will win, but again I don’t envisage any tail off in local economy growth – or activity in the property sector this year.
The retail scene locally is showing some big changes too. The amount of available stock is decreasing as the High Street is springing back to life.
It’s worth mentioning in the industrial sector – which is quite strong in Nottinghamshire. But stock levels are running down because no new buildings are being constructed. We need new modern buildings and increased stock levels. There are positive signs that there will be some building in the broader East Midlands which is good news.
However, the lack of stock is something which we all have to deal with. Developers are started to contemplate building in the industrial sector and that represents the start of the cycle… it’s not easy for businesses to grow if they don’t have the space. And it’s important that we keep our East Midlands talent local – we don’t want it going elsewhere!