UK Commercial returns are set to decline

UK commercial property returns are set to fall by 17% in 2006 and by 9% in 2007, according fresh forecasts made by the Royal Institute of surveyors (RICS).

According to the RICS annual UK commercial property forecast published this week, UK i nvestor interest in the commercial sector is set to continue rising over the next couple of years. But this is likely to be offset by a fall in demand from foreign investors, who were the "dominant force in the market in 2005", accounting for £15bn or 30% of all commercial property purchases.

RICS economist Oliver Gilmartin said: "The doors to commercial property are opening up to a much wider audience … however, while the next two years will continue to see healthy returns for investors in UK commercial property, some will be disappointed if they are expecting the kind of stellar performance experienced in the last three years."

BOE keeps rates on hold

The Bank of England's Monetary Policy Committee (MPC) has opted to hold interest rates at 4.5% for the ninth month in a row. The MPC last reduced interest rates in August, by a quarter percent, down from 4.75% to 4.5%.

Another property company to float on AIM

Ciref, the property investment fund, this week announced that it plans to float on AIM by early May.

The Jersey-based fund hopes to raise £35m through a placing of new shares, with the intention of cutting debt and making further investments in both the UK and Europe.

Mike Watters, Ciref's managing director said: "CIREF already has a very strong portfolio of investments and development opportunities. The money that we raise and the visibility afforded by AIM will allow us to expand and apply our active management strategy to additional opportunities in the UK and throughout Europe. This is a very exciting time for the company and we are looking forward to joining AIM, the world’s most successful market for fast growing companies."

Average house price breaks £160,000 barrier

Average UK house prices rose by 2.3% in Q1 2006, the fastest quarterly increase since Q3 2004, according to Nationwide.

The newly released 'Nationwide Regional House Price report for Q1 2006', which covers all thirteen UK regions, reveal that the average UK house price now stands at £160,319, 4.9% higher than in Q1 of 2005.

Average house prices in all UK regions rose in Q1, with average house prices in Northern Ireland recording the fastest growth at 17.6%, which is three and a half times faster than the UK average. The slowest growth was in the northern region, where average property prices increased by 0.5% to £123,483. Incidentally, average house price rises in London outpaced the UK for first time in four years.