Fri, 01/07/2022 - 12:00
· 1 min read

UK Economic and Real Estate Briefing – June 2022

Although we see a recessionary outcome as a possibility, we do not think it is an inevitability.

However, markets expect further interest rate rises, with significant implications for the cost of finance and real estate pricing.

  • With inflation unlikely to return to the 2.0% target until 2024, we expect a further 125bps increase in the policy rate, taking interest rates to 2.50% by the end of 2023.
  • However, we do not envisage a protracted slowdown, thanks to the resilient labour market, elevated saving rate and ongoing fiscal support to vulnerable households.
  • Real estate investors are looking for clear signs of a slowdown. While half-year volume was healthy, anecdotal evidence of price chips and paused marketing campaigns suggests outward yield movements are inevitable.
  • US financial markets may offer a hint of things to come, with transaction yields for office and industrial assets already repricing c. 25-50 bps.

Click to read UK Economic & Real Estate Briefing - June 2022

UK Economic and Real Estate Briefing – June 2022