Investors would rather spend their cash on physical commercial property, rather than on market shares, according to the latest Lloyds TSB Private Banking Investor Confidence Index.
With the commercial sector offering high yields and investor confidence being boosted in the recent months, more potential buyers are shifting their gaze towards bricks and mortar. The Index highlighted that sentiment had drastically increased in the north-west of England, the West Midlands and Wales, with London still leading the way for investor confidence.
In total, the sentiment level stood at 32 per cent across the UK, whilst 44 per cent of the respondents believed that the sector forecast for the next six months looked positive. The latter figure is compared to the 12 per cent who predicted a negative six months ahead.
Investor sentiment was only eight per cent in April (2013), meaning that property stood behind gold, emerging market shares, commodities and UK shares as the fifth-highest asset class. In the past three months, buyer sentiment towards gold has dramatically fallen from 46 per cent to just 12 per cent, suggesting that more are shifting away from shares and towards physical property.
There is a degree of caution however. Ashish Misra of Lloyds TSB Private Banking states that investors within the commercial market may already be too exposed, while according to the Independent, Jonathan Hopper of property search consultants Garrington suggested that the industry should not get too excited over these figures. He said: "Yes, the property market is in a much healthier state, and initiatives like Funding for Lending have played a key role. But the market is not out of the woods yet."