Across England and Wales, just nine local authority districts will exceed £1 billion in commercial property sales in 2023, a significant drop from 25 the previous year and 24 in 2019. Since 2017, the total value of commercial transactions has halved (-49%) from £104 billion to just £53 billion in 2023, with transaction volumes similarly falling by more than a third (-34%). Only eight districts saw an increase in overall commercial transaction value year-on-year. According to property data provider Search Acumen, the growth trajectory continues to be held back by debt, interest rates and limited investment returns.
Tough conditions in the commercial property market have led to a sharp fall in the number of local authorities in England and Wales that collect more than £1 billion in commercial property sales per year, according to new analysis by property data provider Search Acumen.
Just nine areas in England and Wales are expected to see commercial property sales exceed £1 billion in 2023, according to an analysis of official data from HM Land Registry (HMLR).
This is the first time since comparable records began in 2017 that the number of local commercial property markets worth over £1 billion has fallen into single figures.
In contrast, 25 local authorities will exceed £1 billion in commercial property sales in 2022, with a similar number (24) achieving this milestone in 2018 and 2019 (21), the last year before the pandemic. [Table1].
Table 1: Number of local authorities in England and Wales with a commercial turnover exceeding £1 billion
Year 2017 2018 2019 2020 2021 2022 2023 Number of districts with over £1 billion 2024 2117 28 259
Source: Search Acumen analysis of HM Land Registry data
Cycle Low
Analysis by Search Acumen shows that the total value and volume of commercial property sales in England and Wales has fallen steadily since 2021, with last year's figures marking a full cycle low.
Since reaching a high of £104 billion in 2017, the annual value of commercial trade is set to halve (-49%) to £53 billion by 2023, with trade volumes similarly falling by more than a third (-34%). [Graph 1].
Source: Search Acumen analysis of HM Land Registry data
Commercial winners and losers
Search Acumen's £1 billion commercial property hotspots survey revealed which regions have endured the market downturn, with the top three areas expected to see the most £1 billion spend in 2023 being Greater London at £14.6 billion, Greater Manchester at £2.2 billion and the West Midlands at £1.8 billion. [Table 2].
Table 2: Nine authorities spending over £1 billion in 2023 by local authority area
Local authority area Total trade value over £1 billion in 2023 Greater London £14,642,494,629 Greater Manchester £2,153,096,439 West Midlands £1,761,645,783 Kent £1,669,479,955 West Yorkshire £1,458,560,760 Surrey £1,447,647,685 Essex £1,048,817,529 Nottingham City £1,048,595,020 Hampshire £1,017,398,734
Source: Search Acumen analysis of HM Land Registry data
*(For volume comparison by region, see Table 5 in Editor's Note)
Across England and Wales, just eight local authority areas (7%) saw an increase in their total commercial value year-on-year, with Nottingham city leading the way with a 117% increase compared to 2022. [Table 3]Other cities such as Brighton (63%) also appear to perform well, but in Wales it is Bridgend (55%) that comes out on top.
Table 3: Eight local government districts with year-on-year growth in commercial transaction volume in 2023
Local Authority District Year-on-year change in commercial transaction value (2023) IncreaseNottingham 117%Westmorland Furness 89%Brighton and Hove 63%Bridgend 55%Bristol 5%Herefordshire 5%Leicester 3%West Berkshire 3%
Source: Search Acumen analysis of HM Land Registry data
Of the 10 towns seeing an increase of more than 50% in commercial property transactions in 2023 compared to the previous year, North Tyneside seaside town Whitley Bay took the top spot with an increase of 146%. [Table 4]Interestingly, transaction volumes in Whitley Bay are down 52% year-on-year, suggesting land values are key to transactions in these areas.
Only eight towns saw an increase in commercial property transaction volumes compared to the previous year, with Farnborough leading the way with a 38% increase in transactions.
Table 4: Top cities with year-over-year growth in commercial transaction volume in 2023
Year-on-year change in town commercial trade volume (2023) Whitley Bay 146% Hailsham 127% Farnborough 125% Brighton 97% Washington 75% Oldham 62% Bicester 57% Dewsbury 57% Nottingham 55% Redditch 52%
Source: Search Acumen analysis of HM Land Registry data
While many of the UK's largest cities continue to play a vital role in sustaining commercial property transactions, their outlying districts have been hit hard. Thirty of the 118 local authority districts across England and Wales have seen commercial transaction values fall by more than 50% year-on-year in 2023, including 24 (80%) outside the South East. The three biggest areas with year-on-year value falls were Cumbria (-93%), Rutland (-92%) and Central Bedfordshire (-88%).
Market Commentary
Andrew Lloyd, managing director at Search Acumen, commented: “Our analysis shows that commercial property growth has been trending consistently flat since 2021. Debt, interest rates, investment income and opportunities continue to hit the commercial market, with some investors hesitant to invest until they have more confidence in a healthier future outlook.
“While these figures are disappointing for the economy, the real estate industry is adept at navigating uncertain times and often uses these to strategize and capitalize on new opportunities. We know there are thriving areas of investment focused on the fundamental strengths of prime assets and emerging opportunities in sectors such as technology and life sciences. This selective approach to investment highlights the importance of detailed, reliable real estate data in informing strategic decisions. For us in the real estate data and search sector, this reinforces the need to continue to innovate to provide fast, effective tools that can get transactions done quickly and with confidence in sensitive markets.”
“It is also important to view this trend in the context of industry-wide delays, particularly in terms of transaction volumes. Over the past two years, the number of property conveyancing companies has fallen dramatically, creating bottlenecks among those that remain. This consolidation is now stabilising, and the surviving companies may be able to adapt and expand their capacity to meet increased demand. This is likely to be reflected further in HMLR figures later this year.”
“Going forward, the outcome of the election will undoubtedly have a major impact on wider economic policy which could either stimulate or dampen property market activity, but the wheel of fortune also rests in the hands of the Bank of England as the industry waits with bated breath for an interest rate cut which could inject some energy into the property sector and see further multi-billion pound neighbourhoods emerge by the end of 2024.”
“In the meantime, increasing the amount of capital flowing into the UK commercial property sector will be crucial if the new government is to successfully oversee continued economic growth. Policy and industry need to work together to enable the sector to recover from the trough of the economic cycle.”