The UK is more of a safe haven than the Eurozone, Charles Conrath said at the Association of Property Lenders’ annual conference today.
Conrath (pictured), vice-president of research and strategy at JP Morgan Asset Management, said that market expectations had been too pessimistic in the period following the Brexit vote.
Low interest rates would keep making UK property relatively attractive regardless of short-term uncertainty, he said, adding that although capital values in offices had fallen by 4%, he did not expect that trend to continue.
“Interest rates are likely to be low for longer, and a probability of a sudden increase in interest rates has collapsed in recent months. This puts the UK at an equal footing with the Eurozone.”
He said that although the UK had to work through Brexit, Europe had its own problems, including the migrant crisis and the Italian banking crisis.
However, Conrath also said a lack of hard economic at the moment made it hard to see what the UK’s volatility was leading to.
He said: “It’s very difficult to get even a rough idea of what the UK economy will look like in 18-24 months.
“If you ask 10 different researchers, you’ll get 10 different answers.”
Simon Samuels, a partner at Brockton Capital, and Nicole Lux, a senior research fellow at De Montfort University, said the country’s fundamentals were still strong.
Political stability and transparency coupled with a market that is lender- and employer-friendly put the market at an advantage, they said.
The interest rate cut also boosted people’s confidence that the Bank of England was active and would respond to crises.
Starwood Capital Markets vice-president Lorcain Egan said: “I wouldn’t advise anyone to pile into anything, but there are good risk-adjusted returns in the UK market. The City of London won’t go anywhere.”
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