Sentiment wavers in UK property market

Tuesday, 11 December 2007 12:00 AM

Expectations for 2008 are beginning to waver among property investment professionals, according to research released by property portfolio managers Young Group.

According to the research 63 per cent of investors expect UK property prices outside London to fall, with a further 33 per cent expecting prices to remain static.

Only three per cent of investors expect UK property prices outside London to rise.

However, sentiment in the London market is more positive, with 39 per cent of professional investors expecting prices to increase in the capital.

Only 19 per cent expect prices to fall, with the remaining 43 per cent expecting prices to remain stable.

"Young Index figures show confidence in the London market outstrips the rest of the UK by more than five times, which is a consequence of the continued undersupply of property in the capital and London's dominant position as the world's leading centre for global business and finance," said Neil Young, chief executive of Young Group.

Yet, pessimism in the market appears to be short-term.

Up to 93 per cent of all investors plan to hold all their property over the next 12 months, with only seven per cent expecting to sell.

Few are planning to increase their holdings however.

While 54 per cent of investors plan to expand their portfolio during 2008 in the capital, this falls to just ten per cent who intend to add UK property situated outside of the capital to their holdings.

"The Young Index results clearly show that buy-to-let investors continue to have confidence in the sector," continued Mr Young.

Even following the recent credit crunch - which has made mortgage funding harder to obtain - the property market remains positive.

"The UK's economic indicators are still positive; inflation is within 0.1 per cent of target, unemployment is low and falling, the growth forecast for 2008 is more than two per cent, productivity is up and further cuts in the base rate are forecast," explained Mr Young.

"Buy-to-let property is still a solid medium to long-term investment class, provided that people do their research and look at the facts and fundamentals of investments, without being swayed by marketing spin or doom-mongering press reports," he concluded.

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