With economic uncertainty in the face of Brexit, business confidence has taken a hit. Companies are more hesitant to invest in expansion, both in commercial space and recruitment. However, recent findings show that while there may still be some uncertainty, many business owners are still looking to invest in commercial property, either to expand or set up shop.
According to data collected from the National Association of Commercial Finance Brokers (NACFB) commercial mortgage enquires have risen by 75% in the past month compared to September.
Enquires from October this year have almost doubled from the amount in the same period last year.
Applications have come from businesses ranging from pubs and restaurants to shops, signalling a potential return of the highstreet. The highstreet has been on the decline in recent years with the rise in popularity of online shopping. However, this new data shows that many businesses are still confident enough to invest in commercial property.
64% of businesses applying for mortgages were from companies based around London, proving that the capital is still a popular place to set up shop. Though operating a business from London is much more expensive due to property values increasing and therefore business rates, it’s still the number one choice for many entrepreneurs.
These findings reflect the NACFB’s annual results which showed that £5.2 billion of commercial mortgages were granted this year, an increase of 55% from the previous year. Commercial mortgage is one of the strongest areas of growth of NACFB members, coming second after bridging finance.
Chairman of the NACFB, Paul Goodman said that an increase in demand for commercial mortgage shows that business confidence is improving. “Last month we saw a huge uplift in enquiries from a variety of businesses – ranging from publicans and smaller retailers to hairdressers and restaurants – so it’s starting to feel like the SME community has got over any Brexit-related nerves,” he said.
“While some of those businesses will also be looking to avoid steep commercial rents, especially in the capital, the confidence to take out a commercial mortgage bodes well for the future.”
What are your thoughts? Are you planning on investing in commercial property or simply looking forward to a return of the highstreet? Let us know what you think.