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Archive for August, 2017

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Posted On 07  Aug  2017  

A word on UK Real Estate

On most measures UK property is expensive. It is most expensive in the South East and in London in particular. Yields in London vary between 2% in the expensive parts to perhaps 4.5% on the outskirts. More risky properties in the Midlands and North can yield 6-7%, but most of those assets require upgrading. There is also a shortage of stock. Foreign buyers and big players domestically are moping up anything decent that comes to market. Institutional investors have moved into prime property because yields on Government and corporate bonds are so low. If these institutional investors are right, then inflation should remain low for very long time. Signs that inflation will remain low is indicated by the fact that UK rates are not going up anytime soon. Sterling has weakened considerably since Brexit, but inflation remains subdued. The BoE forecasts that the UK economy will slow down a little