Like the economy, the property market is experiencing a “double dip”. Average capital values have been declining since November of last year, and are now slipping by close to 0.5% per month. Income return has been sufficient to offset this capital decline, however, meaning that total returns have managed to stay in positive territory, albeit only 0.3% over the three months to June 2012 on IPD’s Monthly Index.
The “average” picture hides a lot of disparities between different parts of the market. Central London has continued to outperform, both on the rental side and the investment side, driving ongoing capital growth. Outside of Central London, and particularly outside of the South East, the story is much weaker, with capital values for shops and offices falling by more than 5% over the first half of 2012 in some provincial markets.
Source : M&G Real Estate