UK property capital values tumble in November

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Capital values in the UK property market fell by 4.1% in November, the fourth consecutive monthly decline, according to a report published by CB Richard Ellis. Values have dropped 8.6% from the peak in July and are 5.7% lower than at the beginning of the year. CBRE's figures showed all-property total returns were -3.7% in November, forcing the year to date into negative territory at -1.3%, compared to 16.8% in the same period last year. Annual returns are just 0.3%, the lowest figure recorded in this cycle. As yields across all sectors continue to shift out aggressively, the All Property capital value short-term indicator fell to a staggering -27.0% in November. Central London offices were the worst performing over the month, with capital values falling by 6.4%, but Retail Warehouses have recorded a more dramatic capital value decline of 34.2% on a three month annualised basis. All Property Rental Growth in the UK continues to moderate at 3.8% in the year to date, although this remains stronger than the same period last year. Central London offices are the only segment to show any notable rental growth at 0.9% month-on-month, but this is down from the 2007 mid-summer high of 2.3%. According to the IPD UK Monthly Index November showed the worst monthly total return on record, beating the -1.8% recorded in May 1990 by some distance. To read our article about the IPD's Index, click on the link below

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