Daniel Austin, CEO and co-founder at ASK Partners, says: “While the fall in UK inflation is a welcome development, the property market remains cautious about the broader economic impact of the Iran conflict and the potential for renewed price pressures to emerge in the months ahead.
“Households, buyers and developers recognise that current inflation data may not yet fully capture the secondary effects of rising energy and supply chain costs. At the same time, the UK mortgage market is already showing signs of strain, with nearly 1,000 products reportedly withdrawn since the conflict began.
“As a result, investment activity is likely to remain concentrated in structurally resilient, income-driven sectors such as build-to-rent, co-living, logistics, self-storage and data centres, where chronic undersupply continues to support long-term demand.
The inflation catalyst
“Ultimately, a sustained and credible downward trajectory for inflation remains the key catalyst for unlocking stalled development activity. While today’s figures will strengthen expectations for future rate cuts, the Bank of England’s cautious stance reflects the uncertainty still surrounding the inflation outlook, particularly against a backdrop of geopolitical instability.
“Until greater clarity emerges, both developers and investors are expected to remain selective, 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.”
