Investor Confidence Returns to UK Property

Lloyds TBS Private Banking claims that investors have more confidence in UK bricks and mortar as an investment than any other asset class according to this 22th July, 2013 issue of every investor by Sarah Davidson.

Improving sentiment among investors surveyed in nations and regions like Wales, the West Midlands and North West has added to already “towering confidence” in London with 44% of investors thinking the outlook for property is positive in the next six months, against 12% who think it is negative.

Investor confidence in UK property measured by Lloyds’ index rose 32% in July – a significant increase from +25% in June, +18% in May and +8% in April.

The boost was driven by improving figures from the UK nations and regions, with the strongest surge reported in Wales, where the figure jumped by 27 percentage points from an average of +7% for April and May to +34% in June and July.

The West Midlands had the next biggest jump, increasing by 26 percentage points from +8% in April and May to +34% in June and July, while the North West of England increased by 24 percentage points from –2% in April and May to +22% in June and July.

“Residential property is a popular investment for many private investors, and the increasing levels of confidence shown by the index are likely to be a result of the improving economic outlook coupled with improving prices outside of London,” said Ashish Misra, head of investment policy at Lloyds TSB Private Banking.

“Housebuilders have also performed well in the stock market recently, mainly as a result of government programmes to boost house sales. With regard to commercial property, our client portfolios are slightly overweight in this asset class.”

The survey also revealed that UK and emerging market shares are the asset classes that investors are second and third most bullish about with net sentiment of +19% and +14% respectively.

However, these are both down on the previous month’s figures, when net sentiment was +23% for both UK and emerging market shares.

Net sentiment in US shares has also fallen significantly from +13% to +6%. The latest wave of research was carried out in late June and early July, following the announcement by US Federal Reserve chairman Ben Bernanke on 19 June that the Fed planned to “taper” its quantitative easing policies, after which global stock markets fell for several consecutive days.

Misra said the fall in confidence towards equities is “almost certainly down to the market rumblings following the Fed’s announcement of QE tapering”.

And he added: “This announcement was always sure to cause volatility in global stock markets as investors digest the news of a potential reduction in central bank liquidity, but we’ve already seen the majority of indices begin to recover.

“The change in stance by the Fed reflects their view of the strength of the US economy as well as a greater confidence in the broader global economy, and it is important that investors do not over react to such bumps in the road and keep the longer term in mind.”

Author: Sarah Davidson
Article Source:  http://www.everyinvestor.co.uk/news/2013/07/22/investor-confidence-returns-to-uk-property-5074/