See our new brand in action
Search Menu

2019 – the year of the unknown for the real estate sector

Next year in real estate is almost impossible to predict. Brexit – and the period before and after 29 March – will have a significant influence on the future outlook for the property sector, both commercial and residential.

Consistently across most areas of the economy Brexit has created the greatest market uncertainty in many years, the Real Estate sector is no different.

Despite this, to date, the market has remained surprisingly resilient however, as the reality of Brexit looms, that resilience will be tested. Add to this, challenged occupier markets, weaker sterling and the potential for increased inflation and interest rates, we have a perfect-storm of uncertainty.

However, at some point in the New Year, we hope to have clarity re: the Brexit exit and that will crystallise decisions; market resilience will be tested and investors and occupiers alike will reflect on the reality of the situation and make decisions accordingly.

The real estate market is made up of many sectors, distinguishable by property type, but also the distinct differences between occupier and investor markets. Since confirmation of the leave vote, analysts and commentators have looked for evidence demonstrating a significant shift in the property markets – however, across sectors, a degree of resilience has existed.

Looking at each sector, here are my reflections on this year, plus some thoughts on what we’ll be seeing in real estate in 2019:


  • We’ve seen strong investor interest and occupier demand in private rented and student accommodation – and this will carry through to next year.
  • But there’s some uncertainty in large-scale ‘traditional’ residential schemes with increasingly cautious investment.
  • The market practice of mid- to long-term strategy assumes short-term volatility but, post 2019, strong growth will provide a degree of protection to the sector.
  • Greater flexibility in implementing planning policy alongside government investment in larger infrastructure projects, to maintain and stimulate the market.


  • Despite concern around the impact of Brexit on the financial occupier market, the national picture has remained resilient – but that resilience will be tested.
  • Demand for office space in regional markets will continue to increase, with particular growth in Bristol, Leeds and Manchester.
  • This continued regional growth is a bi-product of occupier uncertainty, the cost of occupying in London and a desire to reduce operational cost.
  • While we saw an immediate post-vote slowdown, the market is picking up and will continue to do so, driven by a number of factors including take-up of space by North American tech companies.
  • Brexit will remain a threat, particularly for City financial institutions, however, at this stage, there has been little significant impact, with many occupiers delaying long-term strategic decisions.


  • Retail will remain a challenging market, driven by consumer behaviour and the cost imbalance for traditional high street retailers and their on-line competitors.
  • The impact of business rates, upward-only rent reviews, and the cost of living wage is severely affecting operators – a situation which is likely to worsen.
  • Market polarisation continues with London and other affluent locations offering greater resilience than traditional suburban markets
  • Despite sympathetic noises from government, further support needs to be forthcoming, and above and beyond the commitment to invest £675 million through the Future High Street Fund. The recent autumn budget offered to ease the burden of business rates for the smallest retailers, but further investment will be required.
  • Without additional support and intervention, the retail market will continue to face an uncertain future, irrespective of – but compounded by – Brexit.

Brexit alone is not the only influencer of short- and medium-term market sentiment, with general inflation, interest rates, changing markets and wage inflation all impacting occupier profitability and investor sentiment against the context of a well-priced existing market.

A level of certainty with Brexit, coupled with positive government intervention and investment will remain key to long-term viability and growth in this sector, enhancing investor appetite and occupier growth.

Photo of Deborah McLaughlin

Deborah McLaughlin

Managing Director, GL Hearn, part of Capita

As managing director of GL Hearn, Deborah leads an enlarged real estate consultancy which better meets clients’ needs. Formerly Director of Housing at Manchester City Council, Deborah joined Capita in September 2016 from the Homes and Communities Agency (now Homes England) where she was an executive director. Initially head of housing delivery, she was subsequently appointed managing director of Capita’s real estate projects business. With over two decades’ experience in the sector, she is an influential and highly-regarded figure within the real estate industry and brings a new energy and perspective to the business.

Connect with us