Confidence levels among property and construction professionals in Bristol and across the South West are the second highest in the UK, according to a new report from accountancy, investment management and tax group Smith & Williamson.
Only professionals in London and the South East are more optimistic about their prospects, the firm’s annual survey of senior executives in the property and construction sector found.
The highest levels of confidence are in the residential sector where just under three-quarters (74%) consider housing as a compelling five-year investment - a 10% rise on the previous year.
The report also shows that confidence remains strong in commercial property, partly fuelled in the region by work starting on the Hinkley Point C nuclear plant at Bridgwater – Europe’s largest construction project. 
The biggest barrier to growth is the planning system and its frequent delays – a common bugbear among property professionals.
A shortage of development land was also highlighted as another ongoing challenge.
Paul Bray, pictured, a partner in Smith & Williamson’s Bristol-based property and construction team said one reason for the region’s optimism was that people are increasingly being drawn to its thriving commercial centres and beautiful countryside.
“This further strengthens demand for cost-effective housing, with the availability and price of building land providing added incentives to developers, particularly when compared to London and the South East,” he said.
“One possible threat to the housing market in Bristol and South Gloucestershire comes from South Wales where estate agents say the majority of recent house buyers in Chepstow and other parts of Monmouthshire are coming from the greater Bristol area, motivated in part by the prospect of lower commuting charges thanks to the halving of the Severn Bridge tolls in 2018.
“There are already new housing developments underway in these areas in anticipation of this growing demand.”
Mike Neale, partner and head of Smith & Williamson’s property and construction team in Bristol, added: “We know that these works will have a huge effect on the industry and bring new opportunities to many.
“However, it will be interesting to see how access to the single market and any freedom of movement restrictions post Brexit will impact contractors and sub-contractors, particularly those looking to Europe for labour.”
Smith & Williamson said one area which wasn’t being properly exploited, but which could provide property and construction companies with a welcome boost to cashflow, was the ability to claim tax relief on research and development (R&D) expenditure.
The report reveals that not enough UK-based companies are taking advantage of the R&D tax credits available to them.
Just 20% of survey respondents said they understood their entitlement and made regular claims. Over half (56%) said they were unsure which types of work qualify while almost a quarter (24%) said they were unaware of the scheme.
Paul Bray added: “The problem is that many senior executives don’t consider their businesses to be innovative. In fact, there are a wide range of exciting developments taking place within the industry with off-site manufacturing, 3D building information modelling, advances in modular flat-pack homes and new energy-saving initiatives being among those highlighted in our report.
“There are significant opportunities for companies to save tax but the majority aren’t aware of them. HMRC has tried to simplify things for smaller businesses, typically with a turnover of less than £2m, by introducing an advance clearance system – but even this isn’t being fully exploited.”
For a free copy of Smith & Williamson’s annual property report, visit http://smithandwilliamson.com/business/insights/news/property-survey-2017
