Weak fundamentals keep lid on housing activity

While the decisive election result could lead to a modest increase in housing demand over the next couple of years, we doubt that this will translate into a substantive pick-up in transactions or house prices. Indeed, any improvement in sentiment will peter out towards the end of the year as the trade deal with the European Union goes down to the wire. And in any case, the housing fundamentals – high house prices and rock-bottom interest rates – aren’t conducive to any meaningful pick-up. As a result, we expect housing market activity to remain muted. That said, with tenant demand rising and supply limited, we expect rental growth to pick up over the next two years.