Uncertainty around a UK exit from the EU has clouded the Investment Property Forum鈥檚 (IPF) latest consensus forecast for the UK real estate market.
Total return expectations among fund managers for 2016 have fallen since the survey was last conducted in February, from 7.9% to 7.1% 鈥� but the IPF said the UK鈥檚 upcoming referendum on its EU membership had made it difficult to gauge sentiment.
September鈥檚 report 鈥� coming after the referendum on June 23rd 鈥� might 鈥減rovide a better view of the markets鈥� over the short and medium term, it admitted.
It said it was difficult to determine how much the slowdown in UK commercial property was due to the uncertainty surrounding 鈥楤rexit鈥� or whether the market was going through a cyclical correction.
The fall in total return expectations was primarily due to an 80bps fall in the forecast of capital value growth, from 3.0% to 2.2%.
The second IPF survey of 2016 describes a pattern of declining growth and total returns for the majority of the forecast period, with only a modest recovery across all measures in 2020.
Capital Ecomomics said its own forecasts were 鈥渟lightly more positive鈥� than the consensus. The research consultancy is predicting total returns of 8.4% and capital value growth of 3.3%.
It said: 鈥淪ince we expect any tightening of monetary conditions to be gradual and economic growth hold up fairly well, we feel comfortable with our bullish position.鈥�
