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It has been an awful summer and not just the weather writes Duncan Young, head of commercial property services at PF&K.
The incessant rain has dampened everyone’s spirits and many businesses report poor sales as incomes are squeezed and people lock their savings away with the future uncertain.
This uncertainty, lack of confidence and the ongoing lack of availability of finance have placed many investment plans on hold and this has been reflected in a difficult market for commercial property - which this agent is not afraid to gloss over. Sales and lettings have been down across the board this summer. This is not to say no deals have been done but they have been fewer and further between than normal for this period, with the general level of inquiries also well down. Transactions are happening but more especially where sellers and landlords are prepared to be flexible and realistic on prices and rents.
Markets are driven by people and their underlying aspirations and sentiment more than any other factor and, as time goes on, the desire to fulfil goals becomes stronger. There will be many people now wanting to move on with their lives, onto the next thing. That yearning will eventually close the gap between what people are prepared to pay and what they will accept for property and business opportunities. Time will bring the market back into equilibrium.
How long will that take? Well, if you are a seller or landlord waiting for a return to 2007 values, forget it! Its not going to happen any time soon. Weigh up your options and if you are in a position to be flexible and realistic there are people who will step into the breach and buy or rent from you.
With interest rates still at historically low levels, banks being provided with funds to lend under the Funding for Lending scheme and the summer events and holidays behind us, some recovery of the market this autumn may be more than just a pipe dream.