Britain is trapped in its third national lockdown as it battles a more contagious strain of the coronavirus. Its economy is likely to shrink again in the first quarter. But analysts are still forecasting a strong real estate rebound this year.
The biggest factor is that the U.K.’s deal to leave the European Union is finally completed, removing a political and economic uncertainty that has shadowed the market for years.
Britain’s vaccination program is also moving forward and economists expect growth to accelerate in the second half of the year.
The U.K.’s “settled new relationship” with Europe, plus low interest rates, will drive an uptick in commercial real-estate investment, said Miles Gibson, executive director of U.K. research for real-estate-services firm CBRE. The firm forecasts £48 billion, equivalent to about $66 billion, worth of investment this year, up 30% from £37 billion in 2020.