Property expert Alan Knight from Walton and Hipkiss gives his view about Brexit's effect on the industrial and domestic market.

Looking forward to 2019 the outlook for the land and real estate market one can foresee a turbulent political scene, driven by Brexit uncertainty, causing hesitation and delay for property markets, businesses and consumers alike.

Coupled with political uncertainty, weakening global economic environment, UK GDP growth in 2019 is expected to be 1.5 per cent, slightly stronger than 2018.

The e-commerce revolution will continue to sustain demand for industrial and logistics space in 2019, with demand for bigger ‘big boxes’ increasing fastest.

‘No deal’ Brexit concerns have not yet been a major force in driving demand and speculative development is starting to address supply-side concerns.

Investment demand remains very strong, but investors will need to keep an eye on innovations in logistics technology.

For retail, a ‘perfect storm’ of Brexit, business rates, inflation, the growth of e-commerce, and labour cost pressures, will weigh on the minds of UK retailers in 2019.

The retail and hospitality landscape will polarise into ‘experience’ and ‘convenience’, with shopping centre owners likely to act to reposition their assets accordingly.

Investment volumes are likely to remain low, but pubs, leisure, and roadside retail will move increasingly into investors’ sights as these previously niche sectors become more investable.

On the local front we are however seeing brisk activity in small retail shops and offices within the Stourbridge and Dudley markets.

The smaller and new start up business having a “let’s have a go” attitude and not seeming to fear what is ahead but just get on with it, perhaps a lesson for the politician’s in London ?

The shortage of stock is hampering expansion of some firms and/or forcing them to look elsewhere.

There is still a good weight of money looking for prime and/or safe, secure investment product.

The office to residential conversion market remains strong with good demand where prices are sensible.

There continues to be a shortage of modern industrial and office accommodation with strong demand for freehold properties.

The fourth quarter 2018 Bank of England Summary of Business Conditions reports investor demand for UK commercial property remained modestly ahead of supply, reflecting a search for yield and the low supply of available stock in many areas.

Investor appetite was weakest for retail properties, where vacancy rates continued to pick up, with demand most buoyant for distribution sheds and warehouses, in part reflecting the structural shift to online retail. However, there were also growing concerns about the impact of Brexit on the commercial property market, and there were signs that development activity was starting to weaken, with some projects being delayed or put on hold.

In the housing market, contacts reported a general weakening in activity levels in the housing market, as the usual autumn pickup in activity failed to materialise in a number of regions.

Although the stock of houses for sale remained low, contacts indicated that demand was also falling.

For example, there had been an increase in the number of purchases falling through due to uncertainty among potential buyers.

More viewings were required before a sale could be achieved and buyers were taking longer to reach a decision to purchase.

In addition, the difference between asking prices and offered prices had widened.

Demand for new-build homes generally remained stronger outside London, although housebuilders reported having to offer more incentives and undertake more viewings in order to complete sales. Labour shortages continued to constrain supply.

Mortgage activity was mostly concentrated in refinancing deals and homeowners moving from floating-rate deals to fixed-rate loans.

The subdued demand for mortgages, combined with the entry of new lenders to the market, had resulted in intense competition.

In turn, this has led to tighter pricing and improved availability of higher loan to value and loan to income mortgages, as challenger banks competed for higher-risk loans in order to grow market share

So the national markets are showing signs of concern we still remain very positive about the year ahead.

Land deals are particularly active at the strategic level – we are currently advising on future development for circa 2,000 homes within our area with a healthy demand from major UK house builders.

So let’s get on with the job and have a successful 2019. The message is clearly don’t panic and stick with it – properties are selling and letting! – take advice and see how you can benefit from this market and understand the increasing number opportunities open to you.