UK Economic and Real Estate Briefing – March 2021
The Bank of England stand firm on their previous guidance and do not intend to make any changes to monetary policy. Investor sentiment for core real estate has improved enough to begin to affect pricing.
Despite the rise in bond yields raising some concerns for investors, the Bank has not seen any change to financing conditions. Looking ahead, the BoE expect the rate of inflation to return and stay close to the 2% target in the spring.
With economic growth forecasts being revised upwards, and property’s risk premium relative to bonds still high, capital allocations to income-producing real assets have continued to increase. At the same time, the supply of core assets to the market has remained low.