UK Economic and Real Estate Briefing – Year in Review 2020
COVID-19 has dealt unprecedented economic damage. Growth and consumer confidence should rebound next year, but hopes of a recovery will be largely dependent on the labour market and the efficacy of a vaccine to reduce the likelihoods of further lockdowns.
Thanks to COVID-19, the UK economy is in its worst ever recession. GDP contracted 20.4% in GDP, laying foundations for a likely contraction of 11.5% in 2020.
One hope for next year is an effective vaccine programme, which will reduce the need for lockdowns in the medium to long term. This will help restore business and consumer confidence and boost growth to 6.4% in 2021.
Despite unprecedented threats to income security and pricing this year, real estate returns have generally been resilient. We expect as 27% upswing in investment volume next year as investors target prime and distressed assets come forward.
The acute uncertainty has exacerbated pre-existing trends to such an extent that the market has changed forever. Occupiers now want flexible real estate solutions that allow them to thrive in a green economy. Investors are already reallocated capital to benefit from these trends.