Real estate has never been more attractive to fund managers, with investment opportunities abound. However, without better data infrastructure, the sector risks squandering a golden opportunity. According to Marc Harris, Head of Real Assets, EU&ME at Vistra Fund Solutions, firms are struggling to access accurate data, hindering investment in the sector. Over the past decade, the UK's real estate market has experienced significant growth, with property prices increasing by 55% since 2013, according to data from the Office for National Statistics (ONS). However, the lack of reliable data is making it difficult for investors to make informed decisions.
The problem is twofold. Firstly, data is often fragmented and scattered across various sources, making it difficult to access and interpret. Secondly, the data that is available is often outdated or inaccurate, which can lead to poor investment decisions. This is having a knock-on effect on the wider economy, with the real estate sector accounting for 20% of the UK's GDP, according to the Royal Institution of Chartered Surveyors (RICS).
The Bank of England's recent decision to keep interest rates at 4.5% is likely to have a significant impact on the UK's real estate market. With interest rates at this level, it is becoming increasingly expensive for households and businesses to borrow money, which could lead to a decrease in property prices. This, in turn, could have a negative impact on the economy, particularly for those who rely on the property market for investment.
Investors who are affected by this lack of data include those who hold mortgages, savers who are looking for a stable return on their investments, and investors who are seeking to diversify their portfolios. What this means for you is that you may need to be more cautious when making investment decisions, and to seek advice from a qualified financial adviser.
The UK government has pledged to improve data infrastructure in the real estate sector, but it remains to be seen how effective this will be. In the meantime, firms will need to find ways to overcome the challenges posed by fragmented data in order to unlock the potential of the real estate sector.