Rising rent levels combined with low interest rates should ensure solid economic growth for the next two years, according to JP Morgan real estate analyst Tim Leckie.
Rising rent levels combined with low interest rates should ensure solid economic growth for the next two years, according to JP Morgan real estate analyst Tim Leckie.
Leckie told EPRA’s annual conference on Wednesday that the summer turmoil in the financial markets is likely to put back the timetable for increasing interest rates, at the same time as rental growth spreads across Europe.
He said: ‘Rental growth is spreading to Germany, Spain and Ireland after appearing first in the UK and this is very positive for net asset values of listed property companies.
‘The summer’s turmoil in financial markets has probably pushed back the lift-off point for interest rates or flattens the speed at which they will rise. This means for the next 24 months or so we will have a continuation of the positive environment for the property industry: broadening rental growth and rising property values against a backdrop of historically low interest rates.’
The slide in global stock markets triggered by the slowdown in the Chinese economy has made listed real estate stocks an attractive prospect, with the UK offering the best prospects in Europe, according to Leckie and fellow analyst Neil Green. The IPD All Property Index shows rents in the UK have risen by 1.2% since March.
