Property sectors in the UK expect to continue their expansion throughout 2015 with a trend towards more sustainable levels of growth predicted to appear
The forecast follows analysis by real estate advisor CBRE which suggests that prime markets in London will maintain growth during the New Year.
Increased confidence and investor interest will spur growth in prime regional markets while secondary housing markets are predicted to progress better than in recent years.
The analysis highlights that last year average total returns to property stood at almost 20 per cent. While growth rate in this area will slow down and settle at just below 13 per cent during 2015, healthy returns will mean good capital accumulation for buy to let investors.
A positive outlook
The oncoming general election is sure to bring with it some uncertainty regarding property decision-making however year on year rental growth in most sectors is likely to be significant.
An improvement in yields as investment inflows continue to find their way into the UK market is also anticipated.
Head of UK research at CBRE Miles Gibson commented on the significant growth seen throughout the property market in 2014 and the probable return to slower but healthy levels of growth heading into 2015.
“This has been a year of extraordinary expansion across the property sector and while this will continue into 2015, overall there will be a return to more sustainable levels of growth,” he said.
He continued to say that rental growth is set to continue across all sectors and, with continually high levels of capital flowing into UK markets, investment yields will continue to improve.
He also explained the distribution of the expected growth, saying he believes there will be a ripple effect as property investors shift their focus from the Capital and into other regions.
Highlighting global economic factors that are expected to bring benefits to the UK this year, Gibson said the most significant would be crashing prices of crude oil as well as reduced inflation rates and boosted consumer spending.
From these market activities we can expect to see a domino effect that will benefit retailers and potentially lead to growth in the retail property sector.
For more information on and predictions for sustainable growth in 2015 within the Buy to Let market please read this recent article from Steve Olejnik.
7th January 2015