Until April 2015, longer-duration government bond yields in the developed world had been in a secular decline. During 1981, yields on benchmark 10-year UK and US government bonds (known as gilts and Treasuries, respectively) reached highs of some 15 percent, French OATs some 17.5 percent, and German Bunds some 10 percent. As the “10-year government bond redemption yields” chart on page 35 shows, by April 2015 UK government bond yields had touched the extraordinary lows of some 1.5 percent, US Treasuries some 1.8 percent, OATs 35 basis points, and Bunds only 8 basis points. Two oft-cited key drivers for this remarkable secular trend are the onset of an era of lower, more stable inflation and the supposed taming of economic cycle volatility.

With the improvement in the economic situation and a rise in longer-term inflation expectations in Europe and the United States, these bond yields have (for now) risen off those very low levels.

As the “Historic UK property yie