Research
Mon, 06/06/2022 - 12:00
· 1 min read

UK Economic and Real Estate Briefing – May 2022

While a potential technical recession cannot be discounted, the labour market would have to deteriorate significantly. Jobs growth will sustain real estate demand, but investors are becoming increasingly cautious. How long before yields tick up in the face of increasing finance costs? 

  • The Chancellor’s fiscal package to help the least well-off with the cost of their energy bills, while welcome, will do little to address the general cost of living crisis.
  • Inflation will remain high until the end of next year and cause GDP growth to slow to 1% in 2023, but key labour market indicators continue to head in the right direction.
  • While rolling annual real estate returns continue to rise, there are early indications of a moderation, with city office initial yields beginning to tick up.
  • With such an acute supply-demand imbalance, it is difficult to see a sharp rise in prime yields on the horizon, but with financing costs rising, investors will have to be increasingly confident of rental growth forecasts to transact at the current levels.

 

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

UK Economic and Real Estate Briefing – May 2022