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LSH Looks for Brighter Property Performance in 2002

LONDON-The UK property market faced a bumpy ride in 2001, reflecting the conflicting signals that are coming from the economy, but according to new research from Lambert Smith Hampton the worst could be over.

By Graham Parker | Updated on February 13, 2002

LONDON-Conflicting signals from the UK economy are causing policy uncertainty, according to Lambert Smith Hampton, but the agent says the outlook for property is brighter during 2002.

Although the UK manufacturing sector is technically in recession, consumer spending is still growing, and the housing market remains strong with low interest rates leading to a 16.8% increase in prices across the UK in the past 12 months. These conflicting indicators are reflected in the varying performance of different property sectors, said LSH.

At the end of 2001, average rental growth for the whole commercial property sector had fallen to 2.5%, down from 5.9% in the preceding year. Retail rents finished the year lowest, down to 1.8%. Industrial rents halved in 2001 down to 2.4% and office rental growth slowed from 9.8% to 3.5%. Reflecting this total property returns fell to 7.1%, although they still outperformed equities and government bonds.

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