The still tight rental market and softening outlook for housing activity – due to weak employment, high mortgage rates and growing speculation around property tax rises in the Autumn Budget – suggests rents will continue to rise faster than house prices over the next year or so. But our forecast for Bank Rate to fall from 4.00% now to 3.00% next year implies lower mortgage rates than most expect will allow house prices in the year to Q4 to rise by an above-consensus 5.0%. That would beat rents growth of around 4.0%.
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