UK’s counter-cyclical affordable housing may beat recession

A shallow technical recession is possible in the UK in the coming year or so, according to David Inskip, head of UK strategy and research, CBRE Investment Management.

However, Inskip said that this will not be a sizeable recession which has a major effect on unemployment.

And while more consumer-facing real estate segments such as retail and hospitality are more likely to be affected, logistics and residential are likely to be more resilient, he said.

He said that investors are looking to residential as one one of the sources of reliable income.

“We particularly like the affordable housing sector in the UK where you have a regulated structure, you have a waiting list of people looking for properties, a consistent under supply, as well as having some inflation linkage in your lease structure, which is really appealing at the moment,” Inskip said.

It is also an asset type that tends to behave counter cyclically. “Fundamentally, we’re not building enough houses and when household formation is outstripping the rate at which you’re building houses, then that demand/supply imbalance is a persistent one, and while that remains the case it’s a really reliable source of consistent income streams.”

Click on the video to watch the full interview or listen to the podcast below.