According to the latest report from Savills, the unexpected political events of 2016 will lead to a rise in caution and risk aversion among real estate investors in 2017, making secure income streams more highly prized among core investors globally.
- More international buyers will enter the market , where high levels of transparency and stable legal structures make UK real estate a safety play.
- Average UK house prices are expected to remain flat in 2017, before rising by 2% in 2018 and 5.5% in 2019 to a total of 13% by the of 2021.
- A supply / demand imbalance means rents will outperform house price growth, rising 19% over the same period.
- For opportunistic investors the continued ultra low interest rate environment will limit the extent to which distressed assets hit the market. These investors will instead look towards development markets, particularly mixed use opportunities linked to infrastructure improvements.
Mark Ridley, Chief Executive Officer, Savills UK and Europe, says: “’Expect the unexpected’ is now the normality, not the exception, on the world stage. Despite this, property remains a fundamentally safe asset class, giving strong income returns and, in many cases, is a refuge for capital preservation in the longer term, its appeal remaining resolute.