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UK Investment Market - November 2016

David Hutchings

David Hutchings

International Partner

Phone +44 207 152 5029

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  • The UK property sector has stabilised after the Brexit shock and while it is too early to say the market has fully corrected to an event that is still, after all, largely an unknown, sentiment and the immediate outlook have clearly improved.
  • Investment volumes rather than values have taken  the strain of the correction to date, with volumes down 26% on Q3 to their lowest since 2013 while prime yields, on average, have increased just 15bp.
  • Demand however is robust, and indeed has increased from some quarters, such as among overseas players, and investment supply is having a more telling impact on activity.
  • International capital flows will continue to be swayed by geopolitical events, but while some activity and investment may be displaced from the UK to other global markets, the UK’s appeal is increasing thanks to the relative movements in yields and the Pound.
  • As the shape of the new US government evolves and Brexit talks get under way in Q1, conditions will remain uncertain for investors and occupiers alike but not all parties will be equally affected and some businesses will continue to be active in those cities and sectors that work for them. In fact, as the market reacts to changing news and buyers and sellers adjust strategy, this will create not just risks but also opportunities in the UK market.