Property used to be the great diversifier. It was an alternative to equities, bonds and cash that it had a lower correlation to as well as allowing investors the additional diversification quality of access to real, tangible assets.
Tumbling economies following the global financial crisis put a temporary end to the residential property price boom with the average UK house price taking seven years, until Q2 2014, to pass its pre-crisis average level of £184,000.
Since then, the pace at which UK house prices have risen annually has gradually slowed from 12.1% a year in September that year, down to 5.2% in July 2015 and, according to the most recent figure, as at February this year, house prices in the UK are growing by 7.6% a year, according to the Office for National Statistics.
The picture in London, with a property climate separate from the rest of the UK, is seeing top-end properties actually selling at a discount of up to 10% to their asking price as demand slows thanks to changes in stamp duty rules, the oil and oligarch money drying up and the uncertainty over UK’s membership of the European Union. There is also an increase in the supply pipeline with at least 200 more Gherkins, cheese-graters and walkie-talkie buildings planned for the skyline.