London replaced as most attractive region for property investors

london-replaced-as-most-attractive-region-for-property-investors

The East of England is the most attractive region for property investors over the next 12 months, according to Handelsbanken’s latest Property Investor Report.

Based on insights gained from UK property investors with an average portfolio of 35, the bank’s report found that 26.5% respondents cited the East of England as the most attractive region for investment.

This was closely followed by North East & Cumbria (24.5%), North West (22%) and South East (21.5%), with respondents appearing to focus on areas with higher yield characteristics rather than those with historically strong demand.

Last year, London was the most popular investment hotspot, while this year, it dropped to fifth position with 21% – on level-pegging with the East Midlands. Support for the South East has also fallen this year, compared to last when it scored 26%.

Nearly two thirds (62.5%) plan to grow their portfolio in the year ahead. Over a quarter (27.5%) will maintain their portfolio’s current size, and just 8.5% aim to exit the market completely.

An overwhelming majority of respondents (81%) expect the value of their portfolio to increase over the next 12 months, with nearly a third (31%) believing it will grow by more than 20%, and nearly 50% expecting a slight uptick of around 5%. Optimism was highest in Wales, with 59% of respondents expecting to see a large upswing.

James Sproule, UK chief economist at Handelsbanken, said: “While headlines over the coming months are likely to be dominated by the general election, interest rate cuts and the ongoing cost of living crisis, these factors don’t seem to be jeopardising investors’ upbeat mindset.

“The adjustments to capital valuations, often masked by inflation, as well as increases to rents, have resulted in property once again delivering a premium over gilt yields – and opened up the potential for attractive opportunities as the economic recovery progresses.”

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