Industry response to latest inflation figures and its impact on housing
Industry response to UK inflation remaining at 3%.
Nathan Emerson, CEO of Propertymark, comments:
“Although inflation has remained steady since last month, it is important to acknowledge geopolitical tensions moving forward, and the effect such pressures may have on many households over the coming months.
“Today’s news should help bring a measured sense of consistency in terms of the ‘here and now’ regarding how the economy is currently coping. However, when looking at the wider global picture there are many factors which remain changeable and have the potential to highly influence the economic outlook moving forwards.
“Following recent news that government borrowing costs were higher than anticipated, there is significant work needed to encourage and support growth in the housing market over the coming months.
“We have moved from a sense of optimism to a feeling of justified concern in a short amount of time. While caution from the Bank of England will be necessary to help further slow inflation, it is hoped that we will eventually see more favourable mortgage rates appear across the lending spectrum when realistic.”
Daniel Austin, CEO and co-founder at ASK Partners, said:
“Today’s steady inflation will be approached with caution by the property market as it holds its breath ahead of the expected downstream effects of the Iran war on the broader economy. Households, buyers and developers are keenly aware that today’s figures have yet to reflect the full impact of the conflict, expected to result in rising prices across the board – the UK home loans market has already seen nearly 1,000 mortgage products pulled by lenders since the start of the war.
We expect investment activity to remain directed into structurally resilient, income-led segments such as build-to-rent, co-living, logistics, self-storage and data centres, where chronic undersupply underpins consistent demand.
A clearer downward path for inflation would be the real catalyst for unlocking stalled projects. The Bank of England’s recent rate hold reflects uncertainty around the effect of conflict in the Middle East on global economies, impacting the inflation outlook. Until that path becomes more certain, both developers and investors are likely to remain cautious. In this environment, capital will continue to favour disciplined, income-focused strategies – with real estate debt in particular offering a way to stay active while managing downside risk.”
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