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Rental growth approaching a peak

Record high rental growth at the start of the year is likely to mark a peak given signs that tenant demand is starting to ease. But strong wage growth and the rising cost of buying as mortgage rates rise mean rental growth is set to ease rather than collapse. Property Drop-In (19th May): What will rising interest rates mean for commercial property returns in the US, UK and Europe? Join our 20-minute briefing on the outlook for returns today at 10:00 ET/15:00 BST. Register now.
Andrew Wishart Senior Property Economist
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More from UK Housing

UK Housing Market Data Response

Nationwide House Prices (Jun.)

Monthly house price inflation slowed in June to its lowest since last September according to the Nationwide, while the annual rate continued to edge lower. That is consistent with our view of steady deceleration through the year, followed by single-digit annual price falls in both 2023 and 2024. Real Estate Drop-In (6th July, 2022): Join our US Commercial Property team for this 20-minute briefing on why we think this is the market top – and how far we expect returns to fall. Register now.

30 June 2022

UK Housing Market Update

Cost inflation to ease alongside new home volumes

After reaching a record-high in June, we think that inflation in builders’ costs will soon start to ease. But even as cost pressures subside, construction volumes will slump as the housing market slows.

28 June 2022

UK Housing Market Update

Withdrawal of affordability test is a wise move

We suspect that the main reason for the hasty withdrawal of the Financial Policy Committee’s mortgage affordability test is that it was on course to become a severe constraint on many buyers’ financial firepower. If left in place, it could have led to a far larger house price fall than the 5% drop we forecast.

20 June 2022

More from Andrew Wishart

UK Housing Market Outlook

House prices heading for a fall

If we are right that the Bank of England will have to raise interest rates to 3.00% to stamp out inflation then we are on the cusp of the fastest increase in mortgage rates since the late 1980s. That caused house prices to fall by 20%. But the tight labour market, lower loan-to-value ratios, and a lower peak in interest rates mean the drop in prices should be less dramatic this time. We expect house prices to fall by 5% over the next two years, reversing a fifth of the increase since the pandemic began.

13 May 2022

UK Housing Market Data Response

RICS Residential Market Survey (Apr.)

The housing market shrugged off the effects of rising mortgage rates and the cost-of-living crisis in April as intense competition between buyers bid up prices further. However, with mortgage rates set to increase sharply over the rest of the year, the days of the pandemic house price boom are now numbered.  

12 May 2022

UK Housing Market Data Response

RICS Residential Market Survey (Apr.)

Rising mortgage rates not yet hurting demand The housing market shrugged off the effects of rising mortgage rates and the cost-of-living crisis in April as intense competition between buyers bid up prices further. However, with mortgage rates set to increase sharply over the rest of the year, the days of the pandemic house price boom are now numbered.The rise in…

12 May 2022
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