This report is based on a survey of Propertymark commercial agents conducted during the fourth quarter of 2023. It is further addended with an analysis conducted by Propertymark of key statistics relevant to the commercial property market.
Economic outlook
Despite the interest rate being held in December 2023, uncertainty continues to pervade the UK economy. GDP growth is anaemic and there has been little change in inflation.
The Bank of England Monetary Policy Committee voted (6 to 3) to hold the base rate at 5.25% in December 2023. Three members voted to increase the rate to 5.5%. This relative stability is welcome although the rate remains high in comparison to December 2021 (0.25%) and December 2022 (3.5%).
Class Use E sector
We asked our members what they expected to happen to supply and demand levels within the sector over the next 12 months. In total, 50% forecast an increase in supply compared with 71% in Q3. In addition, more members forecast a reduction in demand in Q4 (38%) than in Q3 (29%). As such, supply and demand remain imbalanced.
Office sector
We also asked our members what they expected to happen to supply and demand levels within the office sector over the next 12 months. Just over one-third predicted a decrease in demand (35%), while around half (47%) predicted an increase in supply. Again, supply and demand are out of kilter.
