CBRE has predicted that 2015 will see growth slow to sustainable levels.
The company said total returns to property averaged nearly 20% in 2014, however in 2015 it predicts a slowing of growth rates across the sector, with average returns just under 13%. It estimates price growth in the housing market will ease in 2015 to around 6%, with transaction levels having peaked for the time being.
Retail properties will face the most difficulties according to the company, and the general election will bring some uncertainty to the sector.
CBRE head of UK research Miles Gibson said: “This has been a year of extraordinary expansion across the property sector and while this will continue into 2015. Overall there will be a return to more sustainable levels of growth. Rental growth will continue in all sectors and we expect investment yields to continue to improve as levels of capital flows into the UK market remain high. In terms of where growth will be, we forecast a ripple effect next year as property investors shift from London out to the regions.”
