Onside | Page 23

ONSIDE / PROPERTY Q&A Q: Has residential property remained an attractive asset class despite all the bad press and talk of bubbles? A: Yes, very much so. The residential market has shown the best long-term performance of all the UK’s main asset classes. The residential property market has shown strong historical performance and low volatility. Investors remain challenged by a lack of attractive alternative investment opportunities with a similar risk and return potential. Q: What’s happened to the housing market over the last cycle? A: There is no doubt the housing market got overheated in the last boom and house prices were at an unsustainable level, driven up by the availability of cheap money and 110% mortgages. So it wasn’t surprising that when the banking crisis happened, house prices fell. Unique to this trend was London where there has been significant house price inflation whilst the rest of the country is only just starting to see a recovery in house prices. Q: If London is where all the action is why not start a residential fund investing there? A: The London housing market has seen significant house price growth over the last few years however on a normal valuation basis such as house price to income ratios, the market looks overvalued and there are signs that this market is slowing. The London market is very difficult to value as it has been driven by overseas buyers who see London property as a safe haven. We believe at this time there are better opportunities to invest in the regions where there has been limited house price growth and there are strong fundamentals to drive future growth. « We believe at this time there are better opportunities to invest in the regions where there has been limited house price growth and there are strong fundamentals to drive future growth. » 23