Residential returns three times ahead of commercial property

Kasmira Jefford
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RETURNS from investments in the residential property sector are over a third higher than those in the commercial property sector, according to a report commissioned by Qatar Diar and Delancey.

But despite the higher gains over the 10-year period to December 2012, the residential sector attracts comparatively little institutional investment, the report published yesterday says.

The private rented sector was valued at £1 trillion in 2011, but institutional investment accounted for only £2bn of properties, or 0.18 per cent.

Professor Michael Ball, of the International Centre for Housing and Urban Economics who authored the report, said: “Both long-run trends and future predictions for private rental residential sectors show that, in the UK, there is a strong case for significant large scale investment to deliver attractive returns.”

Delancey and Qatar Diar are developing 2,818 homes on the site of the former Olympic Athletes’ Village – now known as East Village – in one of the biggest private-rented schemes in the UK.