Investment experts have urged the Bank of England to hold UK interest rates at its meeting on 30 April, following the ONS announcement of a 3.3% rise in inflation for the 12 months to March.
Nigel Green, CEO of deVere Group, said: “Policymakers are facing a complex inflation picture, but the right response is restraint. This surge is externally driven, concentrated in energy markets, and tightening policy into it risks compounding economic fragility rather than solving the problem.”
“Raising rates in this environment would risk choking already softening activity. Growth is weakening, confidence remains fragile, and households are under sustained pressure.”
Nathan Emerson, CEO of Propertymark, said that until inflation is reduced to more sustainable levels, it will have a wider impact on the UK’s housing market.
“With governments across all nations pursuing ambitious housing targets, there will be a keenness to ensure inflation is kept as low as possible to empower future investment in accommodation,” he said.
Overall resilience
However, Colin Bradshaw, CEO at TwentyCi, said that while inflationary pressures are clearly weighing on household finances and dampening new buyer enquiries, its data suggests the property market remains relatively resilient overall.
He said: “Activity is beginning to cool, particularly in London and the South East, but transaction levels are still expected to outperform 2024, with committed buyers continuing to progress despite a more challenging lending environment.”
Mike Randall, CEO at Simply Asset Finance, said the news could delay future rate cuts, putting pressure on borrowing costs and tightening margins.
“But with the right access to finance, there is still room for businesses to invest and grow,” he added.
Fresh concerns
Daniel Austin, CEO and co-founder at ASK Partners, said that the uptick in UK inflation will raise fresh concerns across the property market, which he said is still waiting for the full economic impact of the Iran conflict to feed through.
“Households, buyers and developers recognise that current data is unlikely to reflect the secondary effects of the war, which are expected to place further upward pressure on prices. The UK mortgage market is already showing signs of strain, with nearly 1,000 products withdrawn since the conflict began.
“Investment activity is therefore likely to remain concentrated in structurally resilient, income-driven segments such as build-to-rent, co-living, logistics, self-storage and data centres, where chronic undersupply continues to underpin demand.”
