Eurozone woes spur UK property bargain hunt, says Lloyds

LONDON: UK property businesses are hunting for bargains in the country’s battered real estate market, encouraged by heavy discounts that show how the eurozone crisis has hit confidence in the sector, Lloyds Banking Group said.

Data from the bank’s quarterly Commercial Property Confidence Monitor showed the net balance of major businesses intending to make purchases in the next six months rose to 57 in May, from 52 in February, while the net balance of fund managers keen to invest rose to 38 from 36 over the same period.

A net balance is the sum of all positive and negative survey responses which ignores the middle ground. A positive number, for instance, would indicate that there were more bullish responses than bearish ones.

One survey respondent, a small company, told Lloyds that “property is so cheap people are starting to buy,” the bank said in the report.

Lloyds managing director of corporate real estate, Lynda Shillaw, said there was clearly pessimism about the market’s near-term prospects.

“Investors are nevertheless seeing the opportunity for longer term value growth when buying at today’s prices,” she said in a statement.

UK property values fell 2% in the first half of 2012 and recovery was expected to be still far off due to the uncertain economic outlook, Investment Property Databank said last week.

Despite the broader growth in investment appetite, Lloyds said most businesses expected activity in the UK property market to slow over the next six months, with the number of pessimists outweighing the number of optimists among small and medium-to-large businesses.

A Reuters poll of economists predicted on Thursday that the eurozone has sunk back into its second recession since 2009 while a second poll said the British economy would stay in recession three months longer than previously expected.

By Reuters