Eleven consecutive months of negative capital movement in the UK means property values, at the headline level, have fallen by a cumulative 3.2% since November 2011, as occupiers, agents and investors remain cautious about the challenging conditions in the UK market.
Eleven consecutive months of negative capital movement in the UK means property values, at the headline level, have fallen by a cumulative 3.2% since November 2011, as occupiers, agents and investors remain cautious about the challenging conditions in the UK market.
According to IPD's UK Monthly Property Index, values fell by a further 0.4% in September, pushed down by mild rental declines, which have now fallen for the fourth straight month, and slight yield expansion, an indication of further uneasy valuer sentiment.
Despite values now falling for the 11th month, returns in the UK have remained positive. Total return for September was 0.2%. Income return remained steady at 0.6%, and initial yields crept up overall to 6.4%.
Phil Tily, IPD managing director for UK and Ireland said: 'Despite the ongoing shocks on the continent and the worsening effects of austerity cuts at home, UK property has managed to keep its head above water so far in 2012, which is no small achievement.'
He continued: 'Obviously there is a considerable disparity in performance between London and the rest of the UK, but every cloud has a silver lining, and yields in some regional markets are now in excess of 8% - the difficulty remains in finding and keeping suitable, stable tenants for these assets.'
