Rising yields more than offset improvement in rents

This rise in all-property rental value growth in September was not enough to prevent capital values falling on an annual basis for the fifth consecutive month.  The fact that the chance of a no deal Brexit has reduced is positive for the economy and rental values. Even so, we expect continued declines in retail rents to weigh on all-property rental values for the next year or so. With the ball now in the EU’s court, the length of the Brexit extension given will determine how quickly economic growth improves. It will also determine how quickly property yields rise. But whether the extension is short or until early next year, we don’t expect all-property capital values to rise for the next couple of years.