IPD’s survey finds property analysts expecting 7% returns this year powered solely by income
Property forecasters are expecting zero rental and capital growth in 2002.
The Investment Property Forum’s latest survey of independent forecasters – property advisers, equity brokers and fund managers – reveals they expect a property total return of 7% this year to come entirely from income.
Predictions for capital growth in 2002 range from 3.3% for the most optimistic to-4% for the most pessimistic.
The most bullish forecasters of rental growth reckon rents will rise 2.1% this year, while the most bearish say they will fall 2%.
On average, property advisers were the most hopeful for the year ahead, showing the highest predictions for total return, rental growth and capital growth.
Equity brokers were the least optimistic. Their average predictions for rental growth and capital growth were negative.
All forecasters have become more pessimistic on prospects for UK property since the last survey in October. Then, the average total return predicted for 2002 was 7.8%, with forecasters expecting some rental growth (1.3%) and minimal capital growth (0.7%).
The market is expected to make a recovery in 2003. UK property will see total returns of 9.4%, rental growth of 1.9% and capital growth of 2.1%, said those surveyed.
The IPD annual index figures are to be reported next month. On average, forecasters expect the 2001 total return to be 6.8%, with rental growth of 2.6% but with capital values falling by 0.3%.
Forecasters have become marginally more negative on 2001 capital growth and rental growth since October, but the range of predictions has narrowed.
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Investment Property Forum survey of 27 independent forecasters |
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Forecasters say that the property market will revive next year, with total returns rising to 9.4%, rental growth of 1.9% and capital growth of 2.1% |
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Rental value growth (%) |
Capital growth (%) |
Total return (%) |
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|
Property advisers |
2001 |
2002 |
2003 |
2001 |
2002 |
2003 |
2001 |
2002 |
2003 |
|
Maximum |
3.0 (3.9) |
2.1 (3.5) |
4.3 (5.0) |
1.0 (0.5) |
2.0 (3.2) |
4.7 (4.9) |
7.3 (7.5) |
9.2 (10.4) |
11.9 (12.0) |
|
Minimum |
2.0 (2.0) |
-2.0 (-2.0) |
0.0 (0.0) |
-1.1 (-1.0) |
-2.0 (-2.5) |
0.0 (0.0) |
6.0 (6.0) |
5.0 (5.0) |
7.5 (8.0) |
|
Range |
1.0 (1.9) |
4.1 (5.5) |
4.3 (5.0) |
2.1 (1.5) |
4.0 (5.7) |
4.7 (4.9) |
1.3 (1.5) |
4.2 (5.4) |
4.4 (4.0) |
|
Median |
2.5 (3.0) |
0.6 (2.4) |
2.0 (3.2) |
-0.2 (-0.3) |
0.0 (1.5) |
1.9 (3.0) |
6.6 (6.8) |
7.4 (8.5) |
9.1 (10.1) |
|
Average |
2.6 (2.9) |
0.5 (1.7) |
2.1 (2.7) |
-0.1 (-0.2) |
0.5 (1.1) |
1.8 (2.4) |
6.6 (6.8) |
7.6 (8.2) |
9.3 (9.8) |
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Fund managers |
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|
Maximum |
3.5 (4.0) |
1.5 (2.5) |
3.8 (4.6) |
0.2 (0.3) |
1.0 (3.3) |
6.0 (6.0) |
7.3 (7.5) |
7.8 (10.5) |
13.0 (13.0) |
|
Minimum |
1.5 (1.0) |
-2.0 (0.0) |
0.5 (0.9) |
-0.8 (-1.5) |
-3.0 (-4.0) |
0.0 (0.0) |
6.6 (6.0) |
5.0 (3.5) |
5.3 (6.7) |
|
Range |
2.0 (3.0) |
3.5 (2.5) |
3.3 (3.7) |
1.0 (1.8) |
4.0 (7.3) |
6.0 (6.0) |
0.7 (1.5) |
2.8 (4.2) |
7.7 (6.3) |
|
Median |
2.5 (3.0) |
0.5 (1.6) |
2.0 (2.5) |
0.0 (-0.7) |
0.1 (1.0) |
2.5 (2.4) |
7.0 (6.5) |
7.0 (7.8) |
9.9 (9.5) |
|
Average |
2.6 (2.9) |
0.3 (1.5) |
2.0 (2.6) |
-0.2 (-0.7) |
-0.1 (0.9) |
2.4 (2.7) |
7.0 (6.5) |
6.8 (8.0) |
9.7 (10.0) |
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Equity brokers |
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|
Maximum |
7.1 (4.0) |
1.3 (2.0) |
2.8 (3.0) |
0.0 (2.0) |
2.4 (2.0) |
3.9 (4.0) |
7.5 (9.0) |
9.4 (9.2) |
11.0 (11.0) |
|
Minimum |
0.0 (1.0) |
-2.0 (-2.0) |
-1.0 (0.0) |
-1.0 (-0.9) |
-4.0 (-3.0) |
-1.0 (0.0) |
6.0 (5.5) |
3.0 (4.0) |
6.0 (7.5) |
|
Range |
7.1 (3.0) |
3.3 (4.0) |
3.8 (3.0) |
1.0 (2.9) |
6.4 (5. 0) |
4.9 (4.0) |
1.5 (3.5) |
6.4 (5.2) |
5.0 (3.5) |
|
Median |
2.0 (2.6) |
-2.0 (1.1) |
2.0 (2.0) |
-0.4 (0.4) |
0.0 (0.7) |
2.9 (2.2) |
7.0 (7.7) |
6.5 (7.5) |
9.0 (9.5) |
|
Average |
2.5 (2.8) |
-1.2 (0.4) |
1.5 (1.5) |
-0.5 (0.6) |
-0.2 (0.0) |
2.0 (2.4) |
6.9 (7.6) |
6.4 (7.0) |
8.9 (9.5) |
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All forecasters |
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|
Maximum |
7.1 (4.0) |
2.1 (3.5) |
4.3 (5.0) |
1.0 (2.0) |
2.4 (3.3) |
6.0 (6.0) |
7.5 (9.0) |
9.4 (10.5) |
13.0 (13.0) |
|
Minimum |
0.0 (1.0) |
-2.0 (-2.0) |
-1.0 (0.0) |
-1.1 (-1.5) |
-4.0 (-4.0) |
-1.0 (0.0) |
6.0 (5.5) |
3.0 (3.5) |
5.3 (6.7) |
|
Range |
7.1 (3.0) |
4.1 (5.5) |
5.3 (5.0) |
2.1 (3.5) |
6.4 (7.3) |
7.0 (6.0) |
1.5 (3.5) |
6.4 (7.0) |
7.7 (6.3) |
|
Median |
2.5 (2.6) |
0.1 (1.6) |
2.5 (2.4) |
-0.2 (-0.5) |
0.0 (1.0) |
2.5 (2.4) |
7.0 (6.5) |
7.0 (8.0) |
10.0 (9.5) |
|
Average |
2.6 (2.8) |
0.0 (1.3) |
1.9 (2.4) |
-0.3 (-0.2) |
0.0 (0.7) |
2.1 (2.5) |
6.8 (6.8) |
7.0 (7.8) |
9.4 (9.8) |
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” Figures are subject to rounding, and are forecasts of “all property” annual index measures published by the Investment Property Databank. The measures relate to standing investments only, meaning that the effects of transaction activity, developments and certain active management initiatives are specifically excluded ” To qualify, all forecasts were produced no more than three months prior to the survey ” Maximum – the strongest growth or return forecast in the survey under each heading ” Minimum – the weakest growth or return forecast in the survey under each heading ” Range – the difference between the maximum and minimum figures in the survey ” Median – the middle forecast when all the observations are ranked in order. The average of the middle two forecasts is taken where there is an even number of observations ” Average – the arithmetic mean of all forecasts in the survey under each heading. All views carry equal weight Forecasts were supplied by: Property advisers (includes research consultancies): Cluttons, Colliers Conrad Ritblat Erdman, Fletcher King, GVAGrimley, Healey & Baker, Insignia Richard Ellis, Knight Frank, Property Market Analysis, Real Estate Forecasting Fund managers: Aberdeen Property Investors, Baring Houston & Saunders, Deutsche Asset Management, Henderson Global Investors, LaSalle Investment Management, Legal & General, Morley Fund Management, Prudential Portfolio Investment Managers, Savills Fund Management, Schroder Property Investment Management, Standard Life Investments Equity brokers: Credit Lyonnais Laing, Deutsche Bank, HSBC, INGBarings, Merrill Lynch, UBSWarburg, Credit Suisse First Boston |
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