Halfway through the 1978 blockbuster Superman: The Movie, Lex Luthor turns to his sidekick and opines, “Son, stocks may rise and fall, utilities and transportation systems may collapse. People are no damn good, but they will always need land.”

This phrase will have resonated with property investors in the past three-and-a-half years: perhaps as much as in any of the 41 years since Christopher Reeve emerged from a phone box clad in spandex.

By contrast, the subsequent assertion of Luthor, the fictional supervillain, has been severely tested. Since the EU referendum, it has been far from clear that people will always ‘pay through the nose to get it’.

During that period, national house price growth has slowed dramatically, agricultural land values that peaked in 2015 have softened by a further 2%, and commercial investors have become far more selective in both the sectors and individual assets they will acquire.

As we look forward to the next five years, we believe that greater political and economic certainty will underpin positive investment returns across the different property asset classes. However, the scale of those returns will reflect where we sit in the property cycle and some of the structural changes we are seeing in different sectors.

Within the residential sector, properties in the Midlands and the North offer both higher income returns and prospects for capital appreciation at this stage in the cycle. However, for the private investor, the regulatory and tax environment means buy-to-let is not a venture for the fainthearted. Institutional investment will play an increasing role, with those championing build to rent learning lessons from a more established purpose-built student housing sector.

Commercially, structural change in the way we use the high street will continue to influence where the weight of investment falls. But, as we set out elsewhere, those who adopt a simple logistics good/retail bad mentality risk throwing the baby out with the bath water. Meanwhile, whatever the travails of WeWork, the underlying shortage of good-quality office space, especially in London, is set to underpin the rental growth prospects in that sector.

From a structural perspective, agriculture faces a great deal of regulatory change over the coming five years, though indications are that policy evolution will be gradual rather than sudden. Continuity in the support and trading business environment, and scarcity of supply, in the medium term at least, is likely to underpin land values. However, competition from other land uses is likely to be the key driver of capital appreciation. In that respect, Lex Luthor nailed it.

_{Read the articles within UK Cross Sector Outlook below.}