What will happen to the property market in 2018?

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The UK property sector will continue to perform solidly, despite the ongoing economic and political unknowns, according to CBRE’s 2018 Market Outlook report published today.

CBRE’s 2018 Market Outlook forecasts continuing economic growth for the UK, despite the uncertainties caused by Brexit. The report argues that those uncertainties are likely to peak in 2018, causing some further hesitation in business and consumer confidence. Employment growth looks likely to slow further. Rental growth may thus be patchy in some property sectors.

However, the Outlook finds that some sectors will weather the uncertainty well, including industrials and the so-called ‘beds’ sectors (build-to-rent, hotels, student accommodation and healthcare). This is because these sectors exhibit non-cyclical characteristics, or serious mismatches of supply and demand, or some form of structural change.

The Outlook examines how the key economic, political, and technological forces will affect property markets in 2018 and beyond, taking a comprehensive sector-by-sector review of the property industry, from flexible office space to e-commerce and ‘proptech’, to data centres and built-to-rent.

Miles Gibson, Head of UK Research at CBRE said: “The political noise is likely to reach fever pitch during 2018, but don’t be deceived: the UK economy is likely to grow as fast next year as this year, supported by an absence of further rate rises from the Bank of England and a benign global economic environment. That includes, ironically, solid support from the continued European recovery. While some property sectors will see extremely patchy growth performance, the rise and rise of Industrials & Logistics looks likely to continue, and the ‘beds sectors’ like hotels, built-to-rent and healthcare are also set to grow strongly. Whilst significant risks remain, from reduced consumer spending power, changes to US interest rates and the Brexit denouement, we anticipate robust investment volumes in the property sector in 2018.”

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