UK property market 'remains resilient'

Posted: 02 Nov 2011 16:04:26 GMT

The housing market has performed solidly despite tough economic conditions.

The UK housing market has remained resilient despite facing significant economic pressures over the last few years, a new study has suggested.

Carried out by the Association of Investment Companies, the research found that although the sector has experienced numerous highs and lows of late, it is now regaining favour among investors.

Jason Baggaley, manager at Standard Life Investments Property Income, noted real estate is one of the few asset classes still giving decent returns over the year to date.

The industry figure observed this has been achieved despite escalating uncertainty brought about by the ongoing problems in the eurozone.

Richard Kirby, manager at F&C Commercial Property Trust, stated: "The property market has proved remarkably resilient in the face of slow domestic economic growth, fiscal austerity, a stalling of economic recovery overseas and the Eurozone crisis."

Mr Kirby explained two years of growth were followed by a marked downturn, adding: "The initial sharp bounce-back, has been replaced by a year when performance has been largely driven by income."

He noted London continues to outperform most other regions throughout the UK property market and Mr Kirby observed this is largely due to the capital boasting a stronger economy, tight new supply, an affluent population and the fact it is viewed as an international and national hub.

The city continues to attract investors from overseas because the metropolis is deemed a "large, mature, transparent and liquid market".

However, the expert suggested the gap between London and other areas could be set to narrow in the years to come due to the turmoil seen in the financial and debt markets.

Last month, a study carried out by Knight Frank suggested prime central London house prices could climb by around five per cent in 2012.

According to the investigation, this rise will stall in 2013 before another escalation of four per cent follows in 2014.
 

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