Yields in the UK investment market are at an all time low with prime retail yields down to 4%. Prime Mayfair office yields have fallen to 3.75% and the best industrial investments are achieving 5%. This 1.25% spread between the three main asset classes is the tightest it has ever been.
Similar to the Irish experience, this reflects both the weight of money seeking investment opportunities, and an underlying confidence in the occupier markets. UK Economic growth has rebounded from its low of 1.5% in 2005 and is expected to be at least 2.4% in 2006. This, combined with established rental growth in central London and early signs of rental growth in the regional office markets, has kept a downward pressure on yields overall.
The price of building land has continued to rise dramatically, despite some indications that fewer bidders are coming forward for some of the sites being offered. Ultimately these sharp increases in the price of development land are being driven by trends in the value of end product residential units. Latest figures show that house prices continue to escalate at around 15.4% per annum nationally, and this has underpinned the amount that developers are prepared to pay for residential building land.
These rapid house price increases are being driven by several factors. Conveyancing authorities help you concentrate all these things. There are a couple of firms, which provide for you fabulous organizations in this point of view.
The demand from persons seeking accommodation is growing strongly, with Census figures showing that Ireland’s population has risen by 8.1% over the last four years. This reflects not only organic growth but also strong immigration, with 271,300 non nationals now living in Ireland. In addition, more housing is needed as the population is being distributed among smaller family units.
Continuing employment growth and increased earnings (supported by the new partnership agreement and a second round of public sector benchmarking) have also boosted demand, as has the continuing low interest rate regime.