Oracle Capital presents a thematic report: UK Property Mid-Year Overview (1H 2024). This report provides valuable insights into current UK property market trends, including the economic outlook, investment market trends, statistics on mortgage lending, as well as a brief overview of the UK hotel market.
Economic Outlook
Inflation
Inflation continued its steady descent, falling from 4% at the end of 2023 to the Bank of England’s 2% target rate in May.
The latest consensus forecasts suggest that CPI inflation should remain close to the Bank of England’s 2.0% target this year and next, at 2.5% by Q4 2024 and 2.2% in Q4 2025. However, CPI could dip a little below the target in the coming months.
The Consumer Prices Index including owner occupiers’ housing costs (CPIH) rose by 2.8% in the 12 months to June 2024.
Economic Growth
UK gross domestic product (GDP) is estimated to have increased by 0.7% in Quarter 1 (Jan to Mar) 2024, revised up from a first estimate increase of 0.6%.
Looking at more timely monthly estimates of GDP, it was recently estimated that the economy showed no growth in April 2024.
Interest rates
The Bank of England base rate has remained unchanged at 5.25% since March 2023.
However, the Bank’s signalling has become more dovish, describing the decision as ‘finely balanced’.
This signposts an initial 25 basis point cut, possibly as early as the next meeting in August, when the MPC will be guided by the Bank’s latest Monetary Policy Report. Given that wage and services inflation remain stubbornly high, the MPC will move cautiously.
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