Research Briefing | Apr 1, 2021

UK | House price inflation may soon be running on empty

Why big fiscal deficits and low inflation can coexi (28)

The unexpected resilience of house prices last year sets 2021 up to be another year of rising values. But unsupportive macro factors and the end of the stamp duty holiday lead us to suspect some correction may not be long in coming.

What you will learn :

  • Base effects and government support mean we expect 2021 to be another year of house price inflation.
  • Measures announced in March’s Budget should boost housing demand in the short term.
  • But higher unemployment, falling household incomes, and inaction at the BoE present contrary forces.
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