Residential Property Investors Temper Forecasts

July 6, 2010 - PRLog -- Unsurprisingly, no one expects base rate to fall further over the next 12 months.  17% of respondents expect it be at the same current all time low of 0.5% by the second quarter of 2011.

Furthermore, the pace of any expected increase has tempered during the past quarter.  8.7% of respondents now believe that base rate will have risen to more than 2.0% by Q2 2011 (compared to 10% who predicted such a rise in last quarter’s report).

Only 1% of buy-to-let investors now expect base rate to rise to more than 3% by Q2 2011, still well below the long term average of 5.0%.

According to latest Young Index results, the average 12 month base rate forecast for Q2 2011 now stands at 1.14%, down from the 1.25% 12 month outlook that was predicted in last quarter’s Index.

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Young Index: Headline Results for Q1 2010

•   95% of buy-to-let investors intend to hold their residential property investments for the next 12 months.
•   55% intend to hold their assets for at least 10 years.
•   38% of landlords intend to retain their property investments for the next 20 years or more.
•   The average period that residential property investors expect to hold their property investment assets is now 13.6 years.
•   47% of investors are considering purchasing additional residential property assets within London over the next 12 months.
•   16% of investors are looking at opportunities in the UK outside of the capital.
•   87% of respondents believe that London prices will be at current levels or higher by this time next year.
•   For UK property outside of the capital, 47% expect prices to be at current levels or higher by this time next year.
•   Landlords expect to see an average price increase of 2.5% by this time next year, up from the 1.48% predicted last quarter.
•   The predicted 12 month outlook for UK property prices outside the capital turns from a fall to an increase for the first time since the credit crunch, at 0.2%.  This compares to a drop of 1.0% predicted last quarter.
•   The average base rate expectation for Q2 2011 stands at 1.14%, down from the 1.25% predicted in last quarter’s Index.
•   The majority of investors (55%) are holding property to finance their retirement.
•   52% of respondents believe capital growth to be more important than rental income or total annual returns.
•   On average, landlords review their mortgage product every 12 months, less frequently than the 10 months reported last quarter.

Full results can be found at:
http://www.younggroup.co.uk/research/youngindex.htm

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About Young Index

Young Index is a quarterly gauge of market sentiment within the private rented sector, polling Young Group’s client base of around 500 active investors/landlords who hold UK residential investment property.

About Young Group (www.younggroup.co.uk)

Young Group specialises in delivering Property Portfolio Management services to private and institutional investors. The Group’s activity spans the entire investment cycle from identifying opportunities and financing their acquisition, through to managing the asset (tenanting through our Sunday Times’ award-winning agency, Young London; furnishing through Young Furnishing; financing/refinancing through Young Finance), regularly reviewing the performance of the property holdings and advising on strategic direction, through to realising returns in the most tax efficient manner.

Young Group supports NORWOOD and CHILDREN with LEUKAEMIA, two charities doing valuable work that is particularly close to our hearts.