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Property investment firms upbeat for 2010

Managers at property investment companies are optimistic that the upturn in property seen at the end of last year will continue, but at a slower rate.

The Association of Investment Companies has collated property investment company managers’ views on their outlook for the property sector this year.

Michael Morris, manager at ING Real Estate Income says that the growth in property will be more subdued than seen in Q4 but that the outlook for property investment remains positive.

He says: “With all the uncertainties surrounding the UK economy generally, there are still risks to a straight line recovery, but whilst interest rates remain low, real estate will continue to look attractive, coming off a much rebased floor.”

Marcus Phayre-Mudge, manager of TR Property Investment Trust, says: “The second half of 2009 and into this year have seen a general stabilisation of values coupled with a marked improvement in the pricing of prime assets.

“The main attraction is the high level of income and at the prime end the distinct possibility of rental growth.

“Importantly, we expect this demand for income to persist. We believe investors will continue to focus on strong income streams well into the future.”

A spokeswoman for the AIC says: “It is encouraging to see property investment companies experiencing a rebound after the lows from 2007 to mid-2009. 

“The unprecedented growth in the past six months clearly cannot be maintained but for investors that take a long-term view, property is an important asset to hold as part of a diversified portfolio.”


Lasting benefits of lower interest rates

In my last column I spoke about the multitude of house price indices and would now like to turn my attention to mortgage affordability.


Interest rates enter the expectation phase

Let’s be honest, I am sure no-one expected to see that the Bank of England Monetary Policy Committee, had suddenly raised rates from their current 0.5% level, although some commentators have been a little jittery with inflation nudging 3%.


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