The company’s latest Index has forecast capital values to rise 10.1%, compared with FTSE 100 Index (+7.8%); gold (+1.4%) and Brent Crude (-3%) which will encourage investors to gravitate towards property over the next twelve months.
As the number of properties on the market remains low, house prices are expected to be driven up by sustained demand from foreign and domestic buyers. Overseas investors will continue to predominantly target apartments within new developments to add to their investment portfolios, whilst growing confidence that the economic recovery has taken hold will bring more domestic buyers to market.
In comparison, equities are expected to rise as corporate prospects begin to improve, but at a slower pace; gold, the ultimate safe haven faces greater uncertainty as global economies appear to stabilise; whilst oil prices are predicted to fall as demand declines from major importers.
Nick Barnes, head of research, said: “There is certainly a compelling case for investing in residential property in Prime London. Its long term track record is impressive, having delivered strong capital growth together with low volatility compared to equities and commodities whilst displaying low correlation with other mainstream asset classes. This has already attracted a wide range of prospective buyers.
“Looking ahead, demand is likely to continue to outstrip supply which will sustain capital growth whilst the private rented sector is forecast to expand further as the economy picks up and labour markets improve, thus providing more opportunity for steady rental income.
“Furthermore, with no further taxes proposed on high end property, bar capital gains on non resident owners, I expect demand from investors will continue to rise for the foreseeable future – assuming we do not see any unforeseen economic or financial shocks. Whilst it is less liquid than equities and commodities, it is an ideal longer term investment portfolio balancer.”
