Looking ahead to 2O2O
a more positive year
The “Boris Bounce” started in our market at 0840 on Friday 13th December, with a previously dithering buyer checking on an unsold sold, which he thought would “now show me some growth”, he exchanged at £2,000,000 two days later, no ifs and no buts.
There are of course many factors that govern pricing and demand, but this immediate change of heart, swiftly followed by three other sales has left us with a very positive view of 2020 and 648 sales done.
Buyers’ confidence will drive growth in both liquidity and volumes in the year ahead. Rental growth should become a feature in the office and industrial sectors as the economy grows with the help of the promised Government investment in infrastructure and health particularly in the regions which is one of the priorities of the new regime.
With interest rates remaining low and stable, we return to the central tenets of our market which is the appeal of high yielding income streams when there is a yield gap to exploit, and buyers seeking control of their own tangible assets.
The disparity of yields we believe will remain as there will continue to be a supply of high yielding retail that needs to be re-positioned, and with a more flexible planning environment allowing retail to be converted to residential use, these opportunistic buyers will deliver meaningful returns.
Other pundits have called the bottom of the residential market in London and the South East after some years of weak performance, which will add to the demand for added value opportunities and mixed parades that we have seen sell so well consistently over the last year.
At the other end of the risk spectrum, the prices for the most vanilla and long let assets could improve again across all sectors as the market polarises further into low yielding long leases and the higher yields that value added opportunities offer. The only limitation is supply. Sellers might need to be convinced to move these assets on but with a ready and willing buying pool they can be sure of a good price and in a more liquid market there will be plenty of other opportunities for them to re-invest into.
Each property is of course unique, and with over 270 years of experience in the market our team is well placed to advise as the market continues to evolve.
We would like to thank all our clients for their business over the last twelve months and look forward to a busy year.