Residential market lets returned 2.8% in 2016, according the IPD/MSCI UK Residential Index, against the 3.9% returned by commercial property. Returns have been lower since a high in 2014 as capital growth slowed, particularly in the London market.
Malcolm Hunt, executive director at MSCI, said: “Residential was the second-best performing sector of the UK property investment market in 2016, behind industrials but outperforming offices and most areas of the retail market. Within that, UK market let residential returns continued to decelerate but capital returns remained positive outside of central London.
“Over the longer term, residential continues to dominate the absolute and risk-adjusted performance and rental growth league tables.”
