The worst of the property crash in Europe could be over with London leading the charge, according to a survey of investor sentiment in three core countries.
Confidence has risen across all sectors of the property market, the latest index from Union Investment shows with the UK recording a particularly steep rise of 12 points to 65.5.
It is the first time that the index of European countries has risen since the autumn of 2006 in the UK and France. The index rose 1.9 points to 63.4 in France and remained the same in Germany at 62.1.
The figures have excited the property investment sector. ‘The sharp rise in the UK is the biggest movement we have recorded over the past four years and it suggests that the correction in the London market in particular is beginning to tempt British investors back into the market,’ said Olaf Janßen, head of property research at Union Investment.
The ‘expectation’ factor was the major driver for the positive performance of the index, particularly in the UK, where it climbed 19.6 points to 57.7 with some 63% of UK investors upbeat about their prospects. In Germany 36% felt the same and 30% in France agreed.
In the UK a rise in interest from foreign investors is expected with some 87% of Brits indicating that they think this will happen.
The number of people planning to invest in property in the near future also increased. In the UK 42% planned to invest significantly more compared to 21% in December 2008 while 41% said the same in France and Germany.
There was also a new focus on generating returns rather than looking for safe havens, particularly in the UK where 68% of investors said they were focused on returns, with just 18% seeking safety. However in France and Germany only 28% and 29% were making decisions based on returns rather than safety.
The greater emphasis on returns among British investors is a further indication that the UK turnaround represents a sustained trend. Germany and France lag behind the British market both here and in terms of investor expectations,’ added Janßen.