UK Commercial & Residential market overview June 2008

Despite some recent stability, a further softening in yields looks likely in the next few months, particularly for secondary stock. However, there does now appear to be some light at the end of the tunnel and whilst it seems clear that there will be more distress in the months ahead, so far at least, the dire predictions of bank foreclosures and widespread forced asset sales have not materialised.

Property Week - 1 July 2007

To some extent, this has actually held the market back from finding its floor as buyers and sellers are not yet in agreement on pricing. A lack of evidence is still masking exactly where the market is standing.

So far, the indications are that occupier markets are holding up well but parts of the market are undoubtedly more challenging and looking forward in to 2009, rental growth looks set to slow as weaker demand and inflationary pressures leave occupiers looking to cut costs.

As a result, the UK property investment market will remain demanding and, inevitably, comparisons with the slump of the early 1990s will continue to be drawn. There are, however, important differences between then and now.

Not least, there is currently a strong weight of money standing by to invest once the market is deemed to have reached its floor, focusing on prime stock.

This, together with a relatively balanced occupational sector, a falling pipeline of future developments, high employment levels and the lingering promise of lower interest rates, are the important elements which were not present during the recession of the early 1990s and which still point to the start of a recovery in the market by the year-end.

Cushman & Wakefield - For the full report click here