The imminent European referendum is causing some indecision in the property investment market, resulting in a slight slowdown in interest and hence values. This however, potentially presents a window of opportunity for those still looking to buy, says Mike Oldrieve MRICS of Vickery Holman Property Consultants.
ECONOMY
The UK economy has made steady progress during the first half of 2016 with consumer spending holding up and credit readily available. There are one or two signs of concern, as investment growth weakens and corporate credit availability tightens, reflecting less favourable capital market conditions, according to the latest quarterly figures from The Bank of England. Domestic manufacturing levels remained steady while exports reduced slightly. The housing market received a further boost from the changes to stamp duty in the buy to let markets but the most noticeable change was the marked slowdown in commercial property activity in London.
PROPERTY MARKET
At a national level, in their latest quarterly Commercial Property Market Survey, the Royal Institution of Chartered Surveyors (RICS) report “underlying market fundamentals remain solid for both occupiers and investors and expectations remain positive despite referendum unease”.
Capital value and rental growth is expected to ease with the drop off in the London investment market.
This is backed up by the IPD UK Quarterly Property Index which indicates that the ‘All Property index’ increased by 1.1% in the first quarter of 2016 which, annualised equates to 11.1%. This can be compared with equities at -5.8% for the year.
SOUTH WEST
The South West the market has had a busy first half of 2016 with prime net initial yields largely the same as last quarter.
