Small to medium sized property businesses across the Midlands are more positive about the future of the sector than in 2011, with over a quarter (28 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 Midlands showing a slight swing towards optimism.
The report comes at a time when Lloyds TSB Commercial’s lending to UK property SMEs has risen by 13.4 per cent.
Despite the slight increase in positivity across the Midlands, respondents were split in their opinions on activity in the region, with 18 per cent expecting activity to slow and 54 per cent predicting that activity will stay at current levels. This gives the region a net confidence score of +10.
The report looks at the confidence of SME property businesses throughout the UK based on their attitudes to investment and views of sources of funding.
It reveals that even though expectations for the regions have improved, property business owners are more cautious about the recovery of the wider UK market. More than half (51 per cent) in the Midlands believe activity will remain static and the rest are split between improvement and decline (24 per cent each).
Paul Atkinson, relationship manager for Lloyds TSB Commercial in the West Midlands, said: “While there is more overall positivity than 2011, the overwhelming message is that 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 that less people predicting a decline is a positive sign.
“We are working hard to help businesses prepare for and take advantage of any upturn. Our positive lending figures are a further indication that there are businesses doing deals and investing in their own portfolios.”
However, the number of businesses expecting the value of their own portfolios to remain static is 56 per cent.
Paul Atkinson 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 that they believe prices have bottomed out remains to be seen.
“What is clear is that whatever decisions property owners take over the next six months will need to be made with caution and guidance to ensure that their fragile optimism isn’t overturned.”
Lloyds TSB now has over 100 property managers based throughout Great Britain who are immersed in the sector by virtue of their customers and their professional networks, including relationships with brokers and IFAs.