Prime Residential

• Bull and Bear have not escaped for half-term. The closest they have got to going away is reading Savills’ latest World Cities Prime Residential Research Paper. 

• Despite all the current global political and economic uncertainty, prime global residential property has remained pretty resilient, with average capital value growth of 2.20% in 2024.

• Madrid and Barcelona were the two cities which saw the strongest capital value growth in 2024. However, London saw prime Central London residential values fall.

• In the UK, the expectation is that the abolition of ‘non-doms’ status and the additional 2% stamp duty surcharge will result in further downward pressure on prices in the short term. Savills are expecting prime residential capital values in London to fall a further 4% in 2025.

• Bull and Bear been given next Sunday off, so will be back in a fortnight’s time (2 March).

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New Dawn?

• Whilst Bear worries about the downgrade to the UK's growth forecasts and what-on-earth President Trump is going to do next, Bull is focused on the dawn of a new cycle for the UK property market. 

• Armed with the latest MSCI Quarterly Index results, Bull is convinced that a combination of falling interest rates, low entry prices, good availability of debt, a limited development pipeline, and some positive investor sentiment, will deliver healthy returns.

• Is it time for investors to spring into action or hit the snooze button again for 2025?

• Enjoy your Sunday.  

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Flying High?

• Bull is uncharacteristically bearish about almost everything, although his ears prick up when he learns that the UK has out-performed the French. And he is hoping this good fortune will follow through onto the rugby pitch on Saturday.

• Bear is bullish about almost everything, especially the Government’s support for the expansion of London’s five airports and the re-ignition of growth plans for the Oxford-Cambridge Knowledge Arc.

• Manchester also gets a ‘shout-out’. But above all, both of them are hoping that the Bank of England will play ball on Thursday and cut interest rates.

• Enjoy your Sunday.

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Hybrid Hustle

• Working from home has again been hot in the press this week, so Bull & Bear plan to have another good moan about it.

• Knowing this, Bear Cub decides to join the conversation and offer a more balanced view on the subject.

• Cub convinces Bull & Bear that whether they like it or not, hybrid policies - where employees work 2 or 3 days a week in the office - are here to stay.

• The three protagonists go on to discuss how UK real estate can best place itself to accommodate this trend for the long-term.

• Enjoy your Sunday.

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January Blues

• Bear has a got a terrible case of the January Blues.

• Aside from his favourite football team's woeful run of form, Bear is fed up with the weather and the raft of negative news stories regarding the UK economy. He is also concerned that the recent bond yield spike will harm the relative attractiveness of property as as asset class. 

• Bull tries to reassure him that 2025 will be a year of opportunity for property investors (especially in the value-add space).

• Bull also highlights the popularity and success of the Build to Rent (BTR) sector as an area for optimism. Investment in BTR surpassed £5 billion for the first time in 2024, the fifth consecutive record for investment numbers.

• Enjoy your Sunday.

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New Year's Resolutions

• Bull attempts to persuade Bear to be more optimistic (and less Bearish) in 2025.

• But with the pound plummeting to its lowest level since 2023 last week and UK Government borrowing costs hitting their highest level for 16 years, Bear is concerned about the rather wintery economic backdrop.

• Bull, however, is keen to highlight the strength of the UK property market recovery, with December performance turning out much better than expected.  Bear's pessimistic view begins to thaw....

• Wrap up warm!  And enjoy your Sunday.  

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10.50% - Stick or Twist?

• Bull is due to have his annual performance review and is concerned that he may have overstepped the mark on occasions during the year. Bear certainly thinks so.

• On reflection though, Bull stands his ground and re-asserts his view that now is a great buying opportunity for cash buyers.

• Bear is anxious to trim back their total return forecast for 2025, but Bull sticks to his guns with an aggressive …10.50% on the back of a decent starting income return, some respectable rental growth and a little bit of yield compression.

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Black Friday

• Bear has a bone to pick with 'Black Friday'. He believes it's far too long, the deals on offer aren't truly 'bargains' and many retailers are hurting themselves by partaking.

• Bear's moaning prompts the two protagonists to look at the state of the UK's retail sector. They find that despite a number of recent setbacks, including the cost-of-living crisis and Labour's Autumn Budget, the occupational market seems in reasonable health.

• Investment in High Street retail hasn't taken the world by storm, but improved consumer sentiment, rental growth, hardening yields and positive Total Returns all paint a more merry picture for the sector.

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Mega-Funds

• Aside from discussing the start of Advent, Bull and Bear assess the Chancellor’s Mansion House speech on 14 November and the implications of the biggest pension reform in decades for the UK property industry. 

• The Government wants to merge the UK’s 86 council pension schemes into a handful of “pension mega-funds”. It is hoped the changes will lead to billions of pounds being invested in the UK in areas such as energy infrastructure, tech start-ups and public services.

• The proposals also indicate there will be significantly greater participation in impact funds and local investment strategies

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The Search for Scientific Talent

• Inspired by a list of mankind's greatest scientific discoveries, Bull & Bear discuss the established and emerging Life Science markets around the world.

• The pair discover that the US clusters of Boston (1) and San Francisco (2) lead the way, with the UK's Golden Triangle (3) the highest ranked Life Sciences hotspot in Europe. 

• The strength of these markets depends on a host of factors, like access to VC funding and R&D, business environment and property costs.  But, wherever you are in the world, the key ingredient is access to deep pools of scientific talent. 

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Locating Luxury

• This week, Bull and Bear discuss a sector they can only dream about ... the luxury real estate market.

• Bull discusses how the market is being transformed by the increasing numbers of ultra high net worth individuals globally, as well as the transfer of wealth to younger generations which is evolving how luxury brands operate.

• Luxury real estate has performed well in the face of tricky economic conditions, and going forward, brands are requiring more space as they move towards offering a more personalised all-round customer experience.

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Madness and Make-Believe

• Under the midday Malaysian sun, four mad bulls and Englishmen set about trying to resolve the sector’s woes.

• Returning from their Asian tour, and with the Budget and US elections now behind us, Bull is calling for no further foot-dragging. He wants investors to re-grasp the nettle and spark up their property strategies.

• In support of his case, the UK’s willingness to mark to market seems to be finally paying off with better performance numbers peeping through.

• Unsurprisingly, Bear is more cautious. He, and his fellow doubters, are preferring to wait and see whether the Government will deliver on their commitments.

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Budget Property

• Bull and Bear return after their half-term break to dissect Wednesday's Budget and, in particular, the more property-specific announcements. 

• The Budget included a raft of investment plans to propel the Government’s housebuilding programme, totalling a commitment of £5bn to be spent in 2024-2025. Also included were reforms to business rates and further hikes to SDLT rates for residential properties. 

• In light of the financial markets not being overly impressed, Bull and Bear end their conversation by discussing what they think the likely impact of the Budget will be for the overall fortunes of the UK property market.

• Enjoy your Sunday.

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The Halloween Budget

• After a glitzy reception gala to celebrate the inaugural International Investment summit, Bull is buoyed by the Government's promise to "invest, invest, invest".  

• But with the spectre of the Autumn Budget looming, Bear is concerned that an unprecedented raft of damaging tax rises will turn the Government's promise into empty rhetoric. 

• The pair will be return on 03 November - after a short half-term break - to pick over the bones of the Budget and evaluate what it means for the UK property market.

• Enjoy your Sunday.  

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