Figures released by the IPD this week show that UK property sector growth has continued its upwards trajectory, despite said growth falling slightly short of the figures recorded for March. Simon Morris asks, what does this mean for return expectations for your property investment portfolio, as it stands?
The IPD Index
According to the latest figures measured on the IPD Index – the definitive measure of UK property values – the sector saw a rise of 0.8% in April. Still a significant rise, it nevertheless falls short of the 1.1% rise recorded in values the previous month. However, it’s also important to note that this rise actually totals more than the rises recorded for the property sector at large for the first two months of 2014.
This continued rise in property values highlights a trend that has been running through the property market for the past year. This is the industry’s 12th consecutive month of growth and notably, values have risen 8% over the corresponding period, ensuring increasingly higher returns for property investment funds across the board. However, they still sit below the peak value property recorded at its height in 2007.
Each individual element of the property sector recorded significant activity in April. According to the results released from the IPD Index, commercial property performed particularly admirably, returning 1.3% in April and recording income return of 0.5%.
Simon Morris Comments
The clearest indicator of the profitability of the industry is the figure it’s valued at over the long term. Higher values equal higher returns on your property investment portfolio as they result not only in real term gains, but in improved industry confidence, which in turn itself generates revenue.
Simon Morris – an expert with a wealth of experience in both the commercial and residential sectors that regularly acts as an advisory capacity, finds that this sustained rise in property values shows the lucrative nature of the entire industry, no matter the type of property featured prominently within your portfolio.