UK Property 5 Percent Average Capital Growth in 2015 and Shunning of Equities by UK Property Investors
It has been confirmed that residential property investments across the United Kingdom could be appreciating by 5 percent on average come 2015. In a nutshell, UK property will be appreciating by 3-5 percent in 2015, London market will continue slowing down as the property activity regionally continues increasing as a vast economic activity indicates the UK house market is ready for a sustained growth as a result of high demand and low rates.
Growth by 5 percent
The UK residential property costs are expected to grow by about 3 percent and 5 percent come next year as per new estimates released. Halifax price inflation reports on houses has indicated the demand for houses or homes need the support of strong economic growth, low rates of mortgage and higher levels of employment as well as an increase in earnings. For those who are investing in buy-to-let they have already been told that investing in property in England’s north will be generating much better percentage yields in days to come. Halifax even predicted extensive concerns on global economy might end up tempering purchaser activity and demand in London’s top end market by 2015 to make the property market in the UK mostly regional in the next twelve months.
The property market fluctuations as per housing economists are that it usually coincides with an extensive economic activity. As the United Kingdom continues to strengthen in the next 24 months the increases in potential property buyers has been going up and is expected to continue.
Nonetheless, the higher UK property demand has not been matched by lots of sellers making their way into the market, which has resulted in a very robust upward pressure on the cost of houses in a number of areas in the UK. The global economy could be affecting things especially in the UK property market and it is the view of housing economists that growth pace is still very robust; the Inflation Report for November from the Monetary Policy of the Bank of England has forecasted interest rates will continue to remain the same for a short period or for the midterm.
British investors and the shunning of equities
Investment managers in Britain have seen equity allocations kept at the lowest level in two years in November 2014, maintaining huge property holdings including most of the funds collected in October as they grapple with divergent world economy risks. A monthly poll on asset managers in the UK has indicated equity holdings have gone down to around 51.7% from about 51.8% as property holdings went up to highs of 4.7%, which is the highest in many years.
The managers were found to have lowered their cash holding by about 8.3% on average level from October’s high average of 11.2%, although it is still high if other times of 2014 are anything to go by. Essentially, cash remains a safe point for investors when they are expecting some kind of market volatility. British investors also have to deal with divergent policies due to the difference in growth rates between major economies and the United States. Such a divergence in world monetary policy could be bringing the toughest challenges in 2015 for markets.
Investors have also shunned the euro zone as the bonds percentage held there reduced from about 26% to 23.6% and equities shares to about 13.7% from around 15.9% due to the fear of continued European Central Bank’s stimulus.