UK property market likely to face revisions and provisions but no crash thanks to bargain hunters

UK property market is one of the most happening real estate markets in the world right now, buzzing with financial provisions, revisions, discount, bargain hunting and liquidation. Big Real estate investment trusts are among those looking for liquidation as they face the biggest pressure of withdrawals from the clients. These groups of companies along with real estate developers are using discounts to attract customers and bring in fresh cash. Real estate developers are also those making revisions in their forecast for future earnings and big fund managers who are heavily invested in the UK property market are making provisions for losses. Unlike stock or bonds, actual loss in the portfolio may not be properly accounted until months due to less liquid nature of the market. These fund managers are also among those looking for bargains in the market. Situations like these can provide excellent investment opportunities for anyone with a big purse and longer view.

Norway’s Sovereign Wealth Fund (SWF) is among those big names. With $890 billion purse, it is the biggest in the whole world and 25 percent of its real estate portfolio is invested in the UK market. This week, it reported quarterly earnings. The report showed that at one had it valued down its portfolio by 5 percent in response to the vote, though actual data is far from being available and on the other hand it brought another prominent property in Oxford Street with 15 percent discount.

In July, UK property market suffered the biggest drop in prices since the 2008/09 crisis; however, we believe that the bargain hunters like above would eventually lead to market stabilization.