Strong foundations: The outlook for UK property
Guy Glover and Emma Gullifer assess the outlook for the UK property market in 2020.
In this note, we explain why we remain confident in UK property (excluding the majority of retail!), focusing on the fundamentals and capital flows as pointers of future performance.
The headlines for the UK have been dominated by Brexit and political uncertainty for the past three and a half years, sapping confidence from UK businesses. This has been reflected in investment volumes for commercial real estate transactions, which were down by around 25% in 2019 compared with a year earlier, and more in line with volumes in 2012 and 2013 rather than the past 5 years.
This has been partly due to a sellers’ hiatus; why sell your asset in this uncertain environment? But the fears of a rush for the exit in the wake of the Referendum result have proved unfounded, and the third and provisional fourth quarter data shows some revival in activity. With the political clouds having lifted with the decisive election result and a path set out for Brexit, it is worth reviewing the prospects for property for 2020 and beyond.
Assistant Fund Manager
Past performance is not a guide to future performance.
The value of your investments and any income from them can go down as well as up and you may not get back the original amount invested.
The value of directly-held property reflects the opinion of valuers and is reviewed periodically. These assets can also be illiquid and significant or persistent redemptions may require the manager to sell properties at a lower market value adversely affecting the value of your investment.