UK Economic and Real Estate Briefing – April 2021
Things are beginning to look up for the UK economy. As the UK transitions out of lockdown towards the first phase of easing restrictions, many indicators are showing positive signs. It was a mixed picture for the real estate market in Q1. Investment volume was down 35% on Q1 2020, but investor confidence is increasing in line with improving business sentiment.
- The successful rollout of vaccines and extended fiscal support has led to renewed optimism about the economic outlook, which adds to the tranche of good news for the UK lately.
- BNP Paribas have revised UK GDP growth forecasts, with growth now expected to reach 6.1% in 2021 (previously: 4.0%).
- UK transaction volume reached 10.4bn in Q1, down 35% on Q1 2020. The Central London investment market had its quietest Q1 since 2010.
- Nevertheless, there are encouraging signs for the rest of the year. Weight of capital continues to build, which is putting pressure on prime yields in Central London.
- The industrial sector continues to take the headlines. The sector had its busiest Q1 on record, and prime yield compression continues as demand remains consistently high.