UK commercial property values fall for 12 consecutive months
Commercial property values in the UK have fallen for the 12th consecutive month, according to a report released by Investment Property Databank (IPD).
The average value of the UK’s commercial real estate value dropped by 3% from September, which as Phil Tily, managing director at IPD said, was a “rather unfortunate milestone for the UK property sector.”
Recent improvements in underlying performance may signal that the market has bottomed out.
Leading economist Adam Chester suggested that capital values are slowing down, which is good news for investors. He said that the market, “offers exceptionally good value at the moment,” but may take several years to fully recover.
According to the Jones Lang LaSalle UK index; the total returns rate for UK rental values was 4.3% up to June 2012, compared to 9.3% registered in the same period in 2011.
In the past three months, the UK has come out of its first double-dip recession since the 1970’s.
Governor of the Bank of England, Mervyn King, has said that the economy may shrink in this quarter, supporting findings by the National Statistics Office that show unemployment benefit claims were at their highest rate in more than a year.
Chester suggests that the main thing holding back the UK’s economic recovery is confidence.
Financial industry leaders, Lloyds Banking Group, predict that GDP will grow by just 1.2% in 2013, followed by further disappointing figures in the years that follow.