Have the clouds hanging over the U.K. economy begun to lift?
According to M&G Real Estate’s U.K. Real Estate Market Outlook, U.K. real estate is forecast to have a strong 2014, as fundamentals look increasingly good.
The M&G Real Estate report notes:
“Just over five years after the financial crisis began in earnest, the U.K. economy finally looks as if it is starting to gather ‘escape velocity’. Although economic activity still stands at over 1 percent below its 2008-peak level, there are reasons to believe that it will have recovered, and perhaps even exceeded, this level of output by the end of 2014.”
Bright spots for the U.K. economy include the improving labor market, with unemployment falling to its lowest level in five years, and the strengthening housing market.
That improved economy bodes well for real estate investors. In fact, investor confidence is up. According to the M&G Real Estate report:
“The most notable trend in 2013 was undoubtedly the rapid intensification in investor sentiment. Although already positive as we moved into 2013, the mood changed palpably in the summer months, resulting in sharply accelerating total returns. According to IPD, the U.K. market recorded a total return of 2 percent in December alone, pushing performance for the year into double-digits, well ahead of consensus expectations.”
That improved sentiment is expanding out of London to the rest of the country.
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Loretta Clodfelter is production and copy editor at Institutional Real Estate, Inc.
