Property confidence deteriorates

More than three in four property experts believe that investment conditions in the UK are deteriorating, according to latest research.

A survey by Reita, the education and awareness campaign for property investment, said that this compares to 69 per cent in the company's previous quarterly research.

In addition, almost one third of property experts said that conditions had significantly deteriorated, leading more people to choose to rent property in London.

Figures show that short selling on the UK stock exchange is one of the key factors leading to the volatility in the market.

"The property sector as a whole is not very liquid, especially in the small and mid-cap names which are exposed to higher leverage or development," said Dave Butler, head of external affairs for Reita.

Research shows that the benchmark for property investors fell sharply from a peak of 6.2 per cent in June to around 5.3 per cent last week.

"It is fair to assume that pricing will overshoot on the downside, just as it overshot on the way up," concluded Patrick Sumner, chairman of Reita.

This follows news that there are less people searching for property to buy, with more people sticking to renting property in the unstable market.

Published 22nd August, 2008

© 2008 Estates IT Limited