Investor Confidence Still High in the UK Property Market

Recent research from Barclays Stockbrokers has found that people are still strongly favourable towards investing in property. Thirty-eight per cent of investors view commercial property as a cautious investment, while 27% believe this will generate strong returns. Thirty-six per cent of those surveyed thought that the performance of UK property is dependent on interest rates. Commenting on the Bank of England’s Monetary Policy Committee interest rate decision for June, Henk Potts, equity strategist at Barclays Stockbrokers, said: “The MPC finds itself in the middle of a difficult balancing act, involving rising inflation on one side and slowing economic growth on the other. There is no doubt that UK economic growth is moderating – the credit crunch has reduced the availability of credit, the housing market is slowing down and the high street is showing signs of softening. Real incomes are also being squeezed by high inflation, which has the potential to further reduce household demand. Meanwhile, inflation is way above target and set to go even higher in the coming months. However, as you look into 2009, slowing economic growth should reduce capacity pressures and thus inflation, and therefore there is still the possibility the MPC could cut interest rates later on in the year.”


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