PA ANALYSIS: Property is not even a diversifer these days

Added 22nd April 2016

Property used to be an alternative investment, a diversifier to equities, bonds and cash but as external influences push investor sentiment further south, it is struggling to even be this.

PA ANALYSIS: Property is not even a diversifer these days

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.



Kames Income Hub


Vincent McEntegart, manager of the Kames Diversified Monthly Income Fund, explains how he aims to deliver a stable and sustainable income of 5% p.a.*, paid monthly, by investing in a range of asset classes

Square Mile Research

Lazard Emerging Markets
Lazard Emerging Markets

Talking Factsheets is a video service for users...

Visitor's Comments Add your comment

Add Your Comment

We won't publish your address

About Author

Gary Corcoran


Portfolio Adviser & International Adviser

Gary Corcoran is the editorial director for Portfolio Adviser, International Adviser and Fund Selector Asia. He is also programme director and chairman for events hosted across the UK, South Africa, Middle East and Asia. Gary joined Last Word Media in August 2006 as the launch editor of Portfolio Adviser, having previously worked at Bacon & Woodrow, Legal & General, FT Business and MSM International.



Investment Strategy




PA Channel Island 2016
PA Channel Island 2016

8th November 2016
The Royal Yacht, Jersey


17th November 2016
The Andaz

PA Emerging Markets 2016
PA Emerging Markets 2016

1st December 2016
The Mayfair, London

Sponsored Content

Investment Strategy