The next phase of the property cycle will be driven by rental growth, according to James Thornton, chief executive of Mayfair Capital.
Speaking at Property in a Brave New World, Mayfair Capital’s investment seminar, Thornton said rental growth of between 3% and 5% could take place over 2015.
Consequently, he advised “moving away from a defensive position”.
Thornton pointed to the return of speculative development in all of the main regional cities for the first time in 10 years as evidence of the strength of the market.
Hamish McRae, economic commentator and associate editor of The Independent, agreed, saying that investment in property is “a no-brainer”.
The exception was the retail sector. Thornton said the sector “lacked the influx of retailers to create competitive tension to drive up rents”.
Both speakers felt the regional devolution promised by the government would be a boon for the economy but, conversely, that Scotland was a concerning area.
McRea said: “I am bullish about the northern powerhouse but worried about Scotland.” He added he had heard that some small businesses in Scotland were moving to places such as Carlisle.
Thornton agreed, saying that he would not be investing in the country.
