Savills Report: Lender and Investor Sentiment Improves, Living Sectors Favored
The latest findings from Savills’ 36th Financing Property presentation reveal a positive shift in lender and investor sentiment compared to the previous year. The survey conducted by Savills shows a strong preference for the living sectors, residential development, and prime logistics among respondents. This positive sentiment is also reflected in improved pricing across all property sectors.
Craig Timney, Savills’ head of UK valuation operations & head of Edinburgh office, notes the return of positive sentiment and highlights the growing comfort in price discovery across asset classes. Despite a decrease in asset trading volume at the end of 2023 and a Q1 12-year low in transactional data for 2024, there is optimism for market recovery as the year progresses.
The commercial property market, as highlighted by Mat Oakley, head of commercial research at Savills, is showing signs of recovery with investment volumes on the rise and prime yields beginning to harden. While challenges remain in certain sectors, such as offices, there is optimism for growth in prime Scottish office rents.
In the residential sector, Faisal Choudhry, head of the Savills Scottish residential research team, reports a stronger-than-expected performance in the UK housing market, with Scotland outperforming the market. The increase in mortgage rates and buyer confidence has supported market strength, with commuter locations showing stronger performance compared to rural areas.
Looking ahead, an improving economic outlook and anticipated interest rate cuts are expected to fuel further growth in house prices. Rental prices in Scotland’s main cities continue to rise, although the growth rate has slowed due to tenant affordability concerns.
Overall, the market is cautiously optimistic, with pricing nearing the bottom for many prime sectors in the UK. As transaction volumes normalize and investor confidence grows, there is potential for further growth and recovery in the property market. Stay tuned for more updates on this evolving landscape.
