Supplement 07 Apr 24 – Train on the tracks?

Apr 7, 2024

“Difficult roads often lead to beautiful destinations.” – Zig Ziglar, Author


Before we crack on, some exciting news – 27th April is the day of the first of a series of in person Social Housing Events that Partners in Property are organising. There are 7 speaker slots in total covering every aspect of social housing. Attendees will be able to walk away with all the nuts and bolts they need to decide whether you want to incorporate social housing within your own property portfolio. The agenda will include:

 

  1. Why Sue Sims started in social housing as an investor more than 8 years ago
  2. Wayne Millward the founder of Room Match will be outlining all the due diligence you need to undertake, when deciding on which social housing provider to work with
  3. Mark Turner, COO at the Housing Network will be talking about the future of social housing
  4. A social housing expert mortgage broker will confirm exactly what you need to provide and take into account when you’re looking for funding for social housing. 
  5. Pinder Singh Dhaliwal, MD at Falcon Insurance will give you an overview of how to insure your property that is leased to a social housing provider. 

 

Early bird tickets are available at this link:  https://partners-property.com/event/social-housing-seminars-2024/ 


Also I would like to share that I’m very excited by our upcoming Property Business Workshop which is happening in two and a half weeks time. Rod Turner and I will be covering due diligence, mergers and acquisitions, and joint ventures – with some real life case studies of deals we’ve done – the good, the bad and the ugly. The tickets for the workshop are here https://bit.ly/pbwtwo – the date is Wednesday 24th April, and if you haven’t booked your ticket yet, please grab one of the last remaining ones – there’s only 3 left now! 

 

Welcome to the Supplement, everyone. Our second short week thanks to Easter – and it felt like that week where everyone tries to pretend there are 5 working days, when really there are four. It was a bit of a catchup week here as we’ve had some flux in the internal team at the HQ of our group operations, and a challenge – but an enjoyable challenge.

 

Macro had a busier week, and it wasn’t all roses this time out, which led me to reach for a different title this week. Is everything still on track for this great purple patch, or have the bears had a great week – and is the train off course? We need to discuss the Halifax and Nationwide House Price Indices, the PMIs were out which are always worthy of discussion, Mortgage Approval rates (and I will get into more detail about the Bank of England Money and Credit Report for the month, as that gives a deeper dive into exactly what’s going on), and (in the least surprising news since “Man Lands on Moon” – the bond and swap yields.

 

The House Price Indices. I’ve been at the mouthpiece of the megaphone over the extensive growth since the start of 2024, and most (according to Halifax anyway) has evaporated in one month. Are they trying to hit their own target of 4% down for the year? Only kidding. 1% down in a month though – their print – is significant. Nationwide were less bearish, but their -0.2% was still half a percent under the consensus. What happened?

Well, we must remember that their figures are based on loans issued, quite heavily. Their own data, whilst they are massive lenders, is only a relatively small percentage of a crowded market – even Halifax. Nationwide’s data will be more skewed towards investors and buy-to-let because of their ownership of the Mortgage Works. On the face of that, you’d say that investors have been somewhat active, whereas resi “punters” less so. 

 

When you compare it with the real-time sales agreed data, of which Christopher Watkin is a great source and distributor if you don’t already follow him on socials, this doesn’t look to add up. March was a good month for sales agreed – an improvement (3% or so) in terms of the prices of sales agreed per sq ft (the best metric of those readily available) compared to the end of 2023. So, why the incongruence?



Not easy to say. No data is perfect. All of those are real-time stats, rather than the land reg which will update in 4-5 months time to reflect all this (so, we know the ONS is going to be up about 3% compared to the April/May print in about July/August, because prices moved forward in Q1 in terms of sales agreed). What did Halifax themselves say?

 

Firstly – they still printed +2% for the quarter. So we wouldn’t be overly worried by one month’s print. They are citing affordability concerns (which I’d disagree with, to be honest) but also a change in the expectations of when rates are going to come down (which may have some truth in it – although, why hang on if rates aren’t coming down as quickly as expected?). Strangely, they’ve also, in the face of a falling month, completely changed their rhetoric. 

 

They cite a more Zoopla-eque style of “a limited scope for significant house price increases this year”. Need I remind you their forecast is 4% down for the year – or it was. They seem to be already at the stage where they are disowning that. There is some good sense in there – demand is positive – mortgage approvals are up to the 10 year average – prices won’t change massively whilst interest rates stay high.



They are still making the same mistake as everyone else, by not having inflation in the conversation. Before writing this section, I was listening to “The Rest is Politics” with Alastair Campbell and Rory Stewart, talking about some universities going bust or being close to it. A super pod. Even Rory had no concept of what inflation had done since 2010 – which he estimated at about 30%, when the reality is 60% (if you merge CPI and RPI). Inflation blindness is a thing, even for someone as well informed as Rory. It’s INFLATION that will continue to help drive things forward – to have this discussion in early April without the context of the massive increases in disposable income that particularly lower-paid households are seeing, in percentage terms – but all working and pension households are seeing in absolute terms – is just silly.

 

So – I’m comfortable we have very little to worry about. Based on the logic above, March’s ONS print will be based on deals agreed in November or so last year, a different environment indeed, but I doubt it will be a 1% down month. One wobble can be forgiven, basically! What’s being conflated is the fact that this week’s Mortgage Offer data release was based on what happened in FEBRUARY, not March. So – when the early May Bank of England Money and Credit report comes out, we can expect mortgage approvals to have dropped right back, to the low 50ks, or similar.

 

Talking of mortgage approvals though – that made plenty of headlines. The number? 60,383. Above the magic 60k which as stated is the 10-year average. I personally would be happier to see it up at 65-70k, as that looks like a healthy and growing market – but that’s a bit of a pipedream with interest rates still at the levels that they are. That’s going to take a bond yield for the 5 year at around 3.25% or lower, with some stability – I’d say.

 

Still, the consensus was a similar print to January’s number of just over 56k, and it was a nice surprise to see the 60k mark breached. It generated a lot of positive headlines – which will largely be undone in a month’s time, as per the above. Still – what it means is that the market could COPE with rates at or around 4% for the best buys on the 5 year in the resi market. All of the tricks from the toolbox – higher arrangement fees, longer terms, interest only periods, and a few more – have worked to keep the market relatively healthy, and credit (no pun intended) should be given where credit is due here. The regulator has done a VERY decent job SINCE 2009 (yes, it was woefully inadequate before that, but blaming one single party or actor is not feasible – they were “all at it”), and very rarely receives any public praise for it. 

 

I’m going to go deeper into the Money and Credit report shortly – so, suffice to say, good news, but temporary good news and I expect the direction of travel to reverse again next month and leave a few scratching their heads – which they shouldn’t really be doing, because we don’t YET – until rates do work their way down – have the ingredients for a crack-up boom. Inflation will drive prices forward though, I say again.

 

Onto my darlings of real time statistics – the Purchasing Managers Indices (the PMIs). The PMIs look healthy – services had its wings clipped slightly for March to 53.1 from a 53.8 print last time out. Slightly under consensus but just the right side of that very healthy 53. Construction and Manufacturing both limped over the 50 mark, which is good news – the effects of the construction inflation situation, and the manufacturing bubble that deflated quite significantly post-PPE and Covid, look to have worked their way through the system. This will still hurt housing starts for many months to come, in my view – and some reality needs to set in regarding pricing.

 

The composite index thus printed 52.8, which compared to the previous 53 is a tiny step in the wrong direction, but nothing to be concerned about. It cements Q1 as a growth quarter for the UK economy in my view, as I’ve seen nothing from the more real-time stats and surveys to suggest anything else. March could well be a flatter and more disappointing month, but February should have done OK (we find out later this month) and something like the 0.4% print I’ve suggested for Q1 GDP should be what comes back.

 

More PMIs in a few weeks when we get the April flash numbers. Onto the ever-presents then – the bond and swaps market. Only 4 trading days again, and It was a tougher week. We gave up most of those gains from a couple of weeks back as the yield hardened from 3.832% at the open to 3.936% at the close, with a couple of peeks above 3.95% – approaching that 4% number again. I did say last week that those market moves suggested very slightly that we move up again before we move down – slowly – and that sadly has come to pass. Still, we can’t mourn 0.1% (well, we can – and I am) but it is the direction that we want to see, let’s face it. The positive economic news allows the yields to harden because it doesn’t look at all critical that rates are dropped, at the moment – the system is “working” as the Bank of England sees it. 

 

The swaps – 3.82% on Thursday’s close on the 5y SONIA swap – that mortgage market money, without any profit margin or operational costs applied, remember – which is still trading below the market which closed at 3.885% on the 5y gilt on Thursday. Supply of money is still exceeding demand – and it still remains to be the case that rates need to get a chunk cheaper before demand for money exceeds supply again (or the property market needs to hot up – but it will only hot up if interest rates are lowered, unless there is an external incentive such as a stamp duty holiday or other fiscal intervention by the Government – which looks unlikely at this point in the parliament and the year).

 

Right. The main course then – firstly, the fish course – the Bank of England’s Money and Credit Report. A monthly fixture, but one I only tend to tuck into once per quarter, as not enough really changes within a month – but I thought it was worth a revisit as we have entered Q2 of 2024.

 

The bullets first, with some commentary:

  • Individuals borrowed, on net, £1.5 billion of mortgage debt in February, compared to £1.1 billion of net repayments in January. We knew an improvement was coming as the rates had dropped nicely, and it took the world a couple of weeks to wake up in January 2024 as usual. 
  • Net mortgage approvals for house purchases rose from 56,100 in January, to 60,400 in February. Net approvals for remortgaging also increased, from 30,900 to 37,700 during this period. Good news on mortgages – to the 10 year average – not quite “healthy” as yet as that’s more like 65-70k per month. A significant improvement on remortgages – a 22% increase as people stop waiting and accept that the rates are where they are, maybe?
  • The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages fell by 29 basis points, to 4.90% in February. That’s a big drop as well, making a significant difference. Far better than the average rate in the market at the moment which is more like 5.25%. The fact that people had products secured and then were able to “trade down” their rates as they neared completion will have helped with this. I’ll be interested to see March’s figure but this is well “in the money” versus the 5.5% stress test rate that the vast majority of mortgages have been stress tested at since 2012 and the Mortgage Market Review.
  • Net consumer credit borrowing decreased to £1.4 billion in February, from £1.8 billion in January. I wouldn’t read too much into this – there will always be extensive consumer credit borrowing in January to plug gaps left from Christmas, so perhaps reserve judgement until next month. 
  • UK non-financial businesses (PNFCs and public corporations) repaid, on net, £3.3 billion of loans to banks and building societies in February, compared with £0.2 billion of net repayments in January. This seems interesting. I always caution against analysing one month’s movement too heavily, but have to balance that against trying to be as “real-time” as possible in my analysis to make it useful. This repayment says two things to me – i) the companies are not finding investment opportunities that offer them a better opportunity than paying down debt and ii) the companies are considering debt to be “expensive” at the moment and thus choosing to pay down with their free cash flow positions. So – is it a bad thing? Not necessarily, but not having the investment opportunities that stack up in the medium term would of course be a continuation of a lack of investment that has been a UK problem since 2007. 
  • The net flow of sterling money (known as M4ex) continued to be volatile month-on-month. M4ex rose by £7.2 billion in February, compared to a flow of -£0.2 billion in January. This was mainly driven by households’ holdings of money, which rose by £6.0 billion in February, down from a £6.6 billion increase in January. I like M2 as the proxy for the money supply conversation – much easier – but, look at the net flow of monies to households over those past two months. Significant. And let me tell you – inflationary. The money supply is considered by some schools of economics to be a much better prediction of inflation – because “money needs to find a home” at the simplest level. Where will that home be for households? More on that in the ONS report analysis in a short while!
  • The flow of sterling net lending to private sector companies and households (M4Lex) amounted to -£15.8 billion in February, down from -£3.2 billion in January. This was mainly driven by a further decrease in the flow of lending to non-intermediate other financial corporations (NIOFCs). Less lending pertaining to the same logic as the point on repayments above. Lending, generally, is needed for growth (price does matter, of course). Fiscal drag lower, but investment lower, and that’s not good in an environment where investment is already too low.

 

My point about a healthy market is made by this week’s graph, between 2014 and end 2019 – I think it is fair to call that a functioning, fairly stable market (sure, bubbles in places, but that’s always the way). There’s a few more points that don’t make the headlines but I believe we should be aware of. 

 

The ‘effective’ interest rate – the actual interest paid – on newly drawn mortgages fell by 29 basis points, to 4.90% in February. The rate on the outstanding stock of mortgages increased by 7 basis points, from 3.41% in January to 3.48% in February. The first bit did make the headlines – but should be put side by side with the second bit. So – the REAL cost that the UK is currently bearing in terms of mortgage debt is 3.48%. If those mortgages all started in February 2024, that rate would be 4.9%. Some people would be broke, some properties would be sold. It doesn’t happen overnight. But that is a 41% increase (or a 29% discount, if you invert it). While that existing debt number is rising towards the new number – which it will every month until those numbers invert – by about 2% per month, which makes sense again really because in a 5 year cycle, 1/60th of mortgages would drop off each month (isn’t as simple as that of course, but there’s enough truth to it). That lag continues – and my point would be that the “70% of impact of interest rises has already bedded in” as quoted by the Bank of England is nowhere near 70% in this part of the market. More like less than halfway. 

 

Then, look at this household “arbitrage” situation which is one reason why the households are doing OK, or even well, thank you very much (yes, averages are dangerous. Yes, some people are struggling. No, I’m not minimizing that). The effective interest rate paid on individuals’ new time deposits with banks and building societies fell by 7 basis points, to 4.46%. The effective rate on the outstanding stock of time deposits increased by 5 basis points to 3.81% in February, and the effective rate on stock sight deposits also rose, by 4 basis points, to 2.11%. So – newly drawn mortgages 4.9%, newly deposited funds 4.46%. That’s some razor thin margin right there. 0.44%. People are currently able to invest at a higher rate than they’ve borrowed on average (although taxation likely puts paid to that being an arbitrage situation) – but you can see how helpful that is.

 

Let’s look back in anger for a moment. Pick 5 years ago, as our typical mortgage cycle. February 2019’s report. The sad news is – the Bank of England weren’t even tracking these metrics 5 years ago in these reports. Mind-blowing, in a way, that even at the top level of Government and NGOs we tend to still be reactive, rather than proactive. I can throw a dart at it though. Average rate on newly drawn mortgages back then – I’m going to say 2.7%. Average debt stock is more like 3% (not vastly different to now). That number going downwards – not upwards – because the new debt number was lower than the existing number, because bond yields had been falling. That does (if I am right, of course) put much more into perspective just how little has really changed in spite of interest rates going up quite so much. Only applies to those with fixed debt – of course – because those on variable rates have taken the full force of the rates moving.

 

Next – the change in lending: The annual growth rate of borrowing by large businesses was 1.4% in February, up from 1.2% in January. The growth rate of lending to SMEs decreased slightly further, from -4.8% in January to -4.9% in February. What we already always know – the smaller businesses can’t get the money when they need it, and with reduced margins they can’t borrow their way out of the hole. But it becomes a self-fulfilling prophecy. This is why Funding for Lending existed in 2012 and also why more initiatives are needed to help businesses out of their post-covid holes. 

 

Here’s why:

 

The average cost of new borrowing from banks by UK PNFCs fell by 4 basis points, from 7.01% in January to 6.97% in February. By contrast, the effective interest rate on new loans to SMEs increased by 5 basis points, to 7.55% in February. Half a percentage point premium for being small – but that’s rising, whereas the bigger borrowers are paying a bit less. That’s some increase though on their old rates. Their existing stock of debt number isn’t a known number, more’s the pity, by the looks of it – but you can see they are sitting 2.5% or so above the newly drawn mortgage rates.

 

So – monetarists will tell you – money supply goes up, money needs a home. The money supply (after being trimmed) is going back up. Does quantitative tightening affect this? No, but the lack of easing DOES. In tightening, the bonds are sold into the secondary market – not retired. (some are retired, the same number that were being retired before since the last round of QE). Confused? Don’t blame you. The point is, the money (and the interest) is going somewhere else rather than TO the Bank of England, which is effectively the Treasury. That hasn’t helped, has it?

 

Money supply down – the action that was needed to see inflation come back into line – has happened since October 2022. It has flatlined a bit now – after hitting a bottom in October 2023 – and isn’t yet on its way back up, properly, but is about where it was in March 2022 (which was up about 22% in 2 years – pretty much the inflation that has played out now in the period since pre-Covid). I’m still watching it closely month on month – it compares favourably to the US who pumped theirs up 40% over that same time period, and it stands to reason they have more secular inflation to deal with than the UK does – but the numbers are still just too high in services and wages for comfort. Let’s ensure to watch the money supply over the coming 6 months very closely – but this is a point where the UK and the US can and do diverge based on this underlying point.

 

I hope you enjoyed the turbot – now for the steak. The meat from the quarterly ONS household accounts for Q4 2023. The ONS are lagging on a lot of this stuff with no release dates ready for things like household balance sheets – which I like a lot – but perhaps this is another methodology change. I can’t find any communications about it. Anyway:

 

The Quarterly Sector Accounts come out around 3 months in arrears, at the end of the next quarter, basically. Headlines and analysis first:

  • The household saving ratio is estimated to have increased to 10.2% in Quarter 4 (Oct to Dec) 2023, from 10.1% in the previous quarter. This is a big number in percentage terms but recessionary noises may have forced it up rather than down. Pre-Covid it looked more like 5%, in “better” times 7-8% would be average.
  • The increase in the saving ratio was driven by a rise in net social benefits other than social transfers in kind of £3.9 billion together with increased employer’s social contributions of £2.0 billion and wages and salaries of £1.4 billion. This is likely warm home payments and also second instalment of cost of living payments (£300 per household for qualifying households) – alongside wage rises of course.
  • Real households’ disposable income (RHDI) is estimated to have grown by 0.7% following broadly flat growth in Quarter 3 (July to Sept) 2023. Still moving forwards not backwards, with a major increase coming for H1 2024 in my opinion and from the figures that we’ve seen thus far.
  • Within RHDI, nominal gross disposable income increased by 1.1%. Not bad for a quarter, but less than might be expected. 
  • The UK’s borrowing position with the rest of the world as a percentage of gross domestic product (GDP) is estimated to have increased to 3.3% in Quarter 4 from 2.9% in Quarter 3. This is an interesting angle. Of course when the Bank of England owns the debt (and isn’t selling it off as part of the quantitative tightening programme) then is isn’t overseas, whereas selling it off likely does send it overseas. Is this uncomfortably high? No – indeed I’m sure we’d love to send more overseas. The US proportion of foreign-owned debt is 10 times this – 33% – as the global reserve currency. 
  • Non-financial corporations increased their net borrowing to 2.7% of GDP, from 1.5% of GDP in Quarter 3 2023; this was driven by falls in gross operating surplus of £4.2 billion and net property income of £3.8 billion. More borrowing last quarter, but less going on at the moment as we’ve seen in the more real-time report from the Bank. 
  • Households decreased their net lending to 2.9% of GDP in Quarter 4 2023 compared with 3.1% of GDP the previous quarter; this was driven by falls in net capital transfers of £2.8 billion, the adjustment for pension entitlements of £2.7 billion, and net property income of £2.4 billion. Paying down and borrowing less as the price was high – basically – in sync with the Bank of England analysis. 
  • General government saw a decrease in their net borrowing position to 4.6% of GDP in Quarter 4 2023 from 4.8% as a percentage of GDP in Quarter 3. Yet still borrowing. As always. 

 

The biggest factor here, for me, is RHDI. I adore RHDI as a metric because it is HOUSEHOLDS that rent properties, not individuals. If there are more people in the household, the rent paid per capita is also lower, effectively. 

 

This is a very sterile view, of course – typical economics. If it means people overoccupying properties, or having flats instead of houses because they are cheaper – or otherwise, that is a sad state of affairs. That’s also been the state of affairs in the capital city for at least a decade if not more – Grenfell spoke volumes in that department and the situation has worsened significantly since then, particularly in the past couple of years. 

 

However – in the absence of a better metric (and my argument is that RHDI per cap is NOT that better metric for our analysis purposes) – RHDI is my favoured one for economic health and affordability. Households and their ability to afford rent (and the pace of increases) has no better proxy. The average is always dangerous – how is it in your part of the country, for example – we await regional GDP figures for 2022, unbelievably, although they were also supposed to be released last month – but with the low paid being the only ones to have actually benefited from this parliament (see the interactive GIF graph here: https://blend.spectator.co.uk/t/j-e-skkhyld-dkljthitjj-r/ ) in real terms adjusted by CPIH (and you could argue this doesn’t work, because the real inflation rate for the poor has been well above CPIH, because the cheapest items in the supermarket are up by the largest percentage, for example) – so it is either the lowest paid, or no-one at all – I feel somewhat justified that this helps the renters. The real situation isn’t as bad as the graph, since average household numbers have grown quite considerably, spreading the rent burden among more household members (and the council tax. And the energy bills. etc.) 

 

It’s moved up nicely in 2023, and will move up even more nicely in 2024. If I’m wrong about inflation and it is quenched, wages are notoriously sticky and with a 4% target on NLW in 2025 already in the mixer, if inflation is 2% or under that’s another 2%+ on real household income. For the rest of this year – if I’m right – with inflation at 3 and wages at 5ish (those are my predicted averages for the rest of the year) that puts another 0.5% per quarter on RHDI on average at least (unless households start to get smaller again – but that would require, aside from anything else, net migration to come right down). April’s figure will have a nice bit of growth in it thanks to the national insurance cut too – that might be worth another 0.5% or more (I’d have thought more like 0.8%). The OBR have revised their net migration estimates from 250k to 290k to 350k per annum now over the forecast period (5 years) – The ONS estimate 315k per annum from 2028 onwards – both of these don’t seem to put enough weight on the post-covid net migration statistics, but there have been significant changes in March on migration which estimate that 300,000 people who migrated to the UK last year would not have been able to do so if all of the changes in May 2023 and in December 2023 had been in force by then. If that is true, that would send net migration down towards the numbers that the OBR and ONS seem hurriedly revising up towards, but all of the previous housebuilding estimates have been based on c. 250k net migrants per year, not c. 350k or more (the number that comes out of the think tanks is more like 400k+). 

 

The newer housebuilding estimates factoring in these figures look more like 500k per year or more being required, based on lags thanks to Covid (and starts have not yet really got started again) and these larger net migration numbers. The problem of suitable stock just seems to get bigger and bigger as time goes on.

 

So what – what are the overarching points of all of this? Let’s get into a nice, tidy, bulleted summary:

 

  1. Real Household disposable income is going UP, and up nicely. Affordability ceilings are really some way from being breached
  2. House prices need lower rates to really start taking off. All that can drive them forward at the moment is slightly cheaper rates (a fair bit cheaper than last year), and wage increases thanks to inflation. We also need the election out of the way, regardless of the winner, pretty much. What we’ve got is still enough to drive them forward, not backward as many bears have predicted.
  3. Yields, therefore, are still climbing. Not as fast as last year, but still ascending rather than descending
  4. The supply problem that we all suspected would never be fixed anyway is further away from being fixed than it ever has been. Instead, people are taking it upon themselves to form larger households in existing buildings, and overpopulate buildings.
  5. Inflation isn’t dead at all – once energy price cuts drop out of the figures in July, we are right back on the climb – and tax cuts and wage rises of the level we’ve seen in April are inflationary on their own, anyway
  6. Rates can stay stronger for longer because the underlying economy is actually doing OK, in spite of the fact that the Government has (at points) looked totally feckless when trying to manage fiscal policy (not Sunak/Hunt, but the “others”)
  7. It is cheaper to rent than to buy in certain areas – the “bit” that the press largely aren’t getting (and many people are missing) is that a 25% price increase from 2020 is the BASELINE, and so everything needs to be viewed through that context and lens. The price of shelter has gone up significantly, like everything, but ownership has gone up more than rent has, at the moment, in some areas
  8. Households are still saving, worrying about escalation in the middle east and Russia, at least one of which took a riskier upturn this week, and there is widespread chatter that Kyiv will eventually fall to the Russians
  9. Investors are still selling more properties than they are buying, shortening rental supply even more
  10. Arrears and insolvencies are up, but still under historical averages and at very manageable levels. The trends need watching closely of course

 

These are the ingredients – what is the recipe? Well, you can either navel-gaze, and/or wait for perfect conditions – or, get on with it now. The future looks pretty messy, from the tenancy perspective. From the property owner side of the equation – this is a goldilocks setup. If you aren’t spending time laying foundations now, to build or expand portfolios, I’m not sure what you are waiting for. The perfect storm is already here, and waiting for lower rates will start to take prices away from you as that is the final ingredient that is needed for the crack-up boom.

 

The deals won’t be as good. They won’t be as plentiful. The margins will get squeezed somewhere. And you won’t have had that 5% (or perhaps 10%) where inflation has done the hard work before the rates repricing really kicks in. The natural rate in this post-industrial economy, without major change, is 2-2.5% for base. That could be 15 years away right now – it could be 10. But when it is here, with bond yields to match – oh boy. 

 

Congratulations as always for getting to the end – don’t forget the Property Business Workshop on Wednesday 24th April – tickets for you, or anyone you know who might want one, here: https://bit.ly/pbwtwo . Onwards, upwards, as we blast through Q2 – Keep Calm and Carry On – but not so calm you aren’t being active right now!