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Commercial property 'is not overvalued'

By Jonathan Dawes, Thu 5 Aug 2010 - Published in Mortgages

There is little indication that recent price rises have made the UK commercial property market overvalued, an expert has asserted.

A recent report from HSBC found that the UK is still the preferred destination for international property investors, despite the weak outlook for rental growth.

Commenting on the research, Capital Economics property economist Ed Stansfield said he agrees that commercial property investment in Britain is attractive because of the market's size and liquidity.

He admitted that the market did go through price corrections during 2007, 2008 and the opening months of 2009, but noted that it recently experienced an upswing.

"I still think that the bottom line is that there is not a lot of evidence to suggest that the UK market has become overvalued as a result of the upswing," Mr Stansfield continued.

Last month, the Royal Institution of Chartered Surveyors claimed that the UK commercial property sector experienced a fall in demand, with seven per cent more of its members seeing a decline rather than a rise.