Banking on Price Rise
The City investment market can now be characterised as too much money chasing too few properties, with many foreign investors in play. Certainly, supply has been at a low ebb for the last 3-4 months, although there are signs of a little more becoming available. Banks are generally being much more canny than in the last recession, this time by ‘managing-out’ their property loans which have gone into breach – and are only slowly leaking properties onto the market, rather than dumping the lot which would of course drive prices down! The imbalance of supply and demand has driven prices up, which is helping the banks in their manage-out task – prime City yields are now fast approaching 6%, down by at least 100 baisis points from only 6-9 months ago.