Commenting on inflation rising to 3.3%, Daniel Austin, CEO and co-founder at ASK Partners, says: “The uptick in UK inflation will raise fresh concerns across the property market, which 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 The UK mortgage market is already showing signs of strain, with nearly 1,000 products withdrawn since the conflict began.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.
The inflation catalyst
“A sustained and credible downward path for inflation, now looking increasingly unlikely, remains the key catalyst for unlocking stalled development. The Bank of England’s decision to hold rates underscores the uncertainty surrounding the inflation outlook, particularly amid ongoing geopolitical pressures.
“Until greater clarity emerges, both developers and investors are expected to remain defensive, with capital favouring disciplined, income-focused strategies. In this environment, real estate debt continues to offer a pragmatic route to deployment while helping to mitigate downside risk.”
