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UK property headed for 'sharp recovery?'

Tuesday, February 03, 2009

Source: Catherine Deshayes

The latest house price review from the Nationwide and the Land Registry show the average price of property in Britain declined by around more than 16 per cent in the last year, but there is small optimism for the future in some quarters...

According to a report from consultants Aberdeen property Investors (API) UK property investors could be in for a "sharp improvement" in future returns when the country's economy begins to turn upwards again.

API examined Britain's overall economy and considered the impact on property investments. Although the consultants confirmed thoughts from elsewhere that rents would struggle throughout 2009, they said that the recovery period should be good news for investors when it does arrive.

Despite the latest IMF predictions that the recession in the UK will longer and deeper than in other major economies, one reason that property could see a good recovery is that the weak pound will attract foreign investment into the country.

A Spokesman at API said, "A strong recovery in performance is not unusual after a property market correction. Following severe weakness in the mid 1970s and early 1990s, commercial property delivered double-digit returns in real terms during the recovery phase."

With a dose of sober realism, however, API also agreed that this year could see the UK experience its worst economic performance for nearly 30 years - since the recession of the early 1980s.

Lombard Street Research last week said that the UK market could hit the bottom over the next 12 months or so, which contrasted with other gloomy reports saying property prices will fall for a longer time.

Source: www.hotproperty.co.uk