Property consultant Simon Morris recently shared his opinions on how the UK property market performed over the course of 2014. What did he say?
A General Overview
Simon Morris’ expertise as an independent property consultant to UK property investment funds showed him that throughout the course of 2014, interest rates remained low. Whilst there are no concrete signs that they’ll pick up this year, 2015 should see interest rates start to rise again. Meanwhile, 2014 saw investors continue to look at property and property-based investment opportunities in the form of trusts, funds and bonds as an avenue through which they could reap a higher yield for their investment.
Challenges remain for investors going into 2015. One challenge will see investors strive to avoid overpaying for income. This is particularly relevant because a lot of assets look fully priced, due to the stagnant nature of interest rates over the past half-decade. When you couple this with expectations that government monetary policy looks set to become more frugal in 2015, and the outcome for income assets seems less than clear cut.
The Head of Communications at Chase de Vere, Patrick Connolly also noted: “Income investors face challenging times in 2015. Equities are particularly vulnerable if we do not see sufficient earnings growth, while fixed interest will struggle in a rising interest rate environment.”
Property funds also saw a revival throughout the course of 2014. With capital values increasing and yields of circa 3% or more on offer, property acted in many instances as a bond proxy, which prompted a flood of investors to trek into the sector.
Simon also felt it import to note that in the first ten months of 2014, IMA listed property funds saw £2.9 billion-worth invested in terms of combined capital. Evidence suggests that this is a greater investment into the sector than it enjoyed throughout the last three years combined.
What’s in Store for 2015?
Simon also took the time to outline his expectations for the direction of the UK’s property market in 2015. Through 2015, the property consultant suggested that the base case for property looks as though it’ll remain solid; prompted by a general search for increased yield and the UK’s sustained economic recovery.
Simon went on to comment: “Investment into property and property-based financial products will still be popular, but the expectation is that returns will level out for 2015… Those looking for a low-risk investment should still ensure that investments entered into are regulated and that the initial capital invested is secure.”
Maximising Profit Potential on Property Portfolios in 2015
In other words, property specialist Simon Morris’ experience has shown him that the positive trends that characterised the market in 2014 look set to continue, albeit at a more moderated pace in 2015. Yet 2015 will not pass without presenting challenges to investors looking to maximise profit potential on their property portfolios throughout the course of the year.