Property fund inflows hit an eight-year high in October, according to Calastone’s latest Fund Flow Index.
Property funds attracted a net £127m last month, the third consecutive month of inflows and the strongest results since August 2018.
Buying increased by £47m to £261m month-on-month. Sell orders rose by £20m month-on-month, but at £134m remained well below the £198m monthly average of the last three years.
Edward Glyn, head of global markets at Calastone, said: “Investors are returning selectively to property funds, seeing value at today’s prices despite the uncertain economic outlook. After the repricing of recent years, rental income offers a more compelling reason to invest, with scope for rental growth where tenant demand is strong. The investment case therefore need not depend on a rapid recovery in property prices.
“Higher borrowing costs still constrain the market. But buyers appear increasingly willing to accept that risk in exchange for income and the opportunity to acquire property at lower valuations.”
