Insurance News Archive
Commercial property insurance: Rental declines sharpest in 5 years
Written by Dan Winters
Commercial property insurance policyholders around the world are seeing the pace of decline in capital values slowing, but rental expectations are still deteriorating, according to the latest research.
Rental yields dropped at their sharpest rate in the Royal Institution of Chartered Surveyors (Rics) commercial property report's five-year history.
Landlords in North America have the most to worry about, as confidence about future rents is bleakest in the region, according to the survey.
However, commercial property insurance policyholders in the UK have reason to be optimistic, as the country saw the steepest rise in investment bidders per real estate unit in Western Europe.
"Rental declines will weigh on property pricing across many developed economies into 2010, reflecting both rising availability and weaker labour markets," said Simon Rubinsohn, chief economist at Rics.
"The dearth in global finance continues to impede investment activity," he added.
Meanwhile, figures from Paragon Mortgages showed that buy to let insurance holders have seen contrasting fortunes, with rental yields rising up to 6.4 per cent in the second quarter of the year, up from 6.2 per cent in the first three months of 2009.
28 Jul 2009
