07 / 03 / 23 - 16 minute read
These are, it has to be said, dramatic times. No sooner than most of the world was starting to emerge from the long shadow of the COVID-19 pandemic, it was confronted with another crisis. As a result of Russia’s illegal invasion of Ukraine, energy costs started spiralling last year, causing havoc in economies worldwide. Inflation was already going to be an issue, but the war - by far the largest in Europe since World War II - made the situation far worse.
In response, central banks, notably the Federal Reserve in the US, the European Central Bank and the Bank of England, started increasing the interest rates far more quickly than would otherwise have been the case. This led to a repricing of the fixed income and public equity markets and a great deal of immediate pain for those with tracker mortgages and continues to do so as fixed-rate mortgage periods come to an end. In such circumstances, it would be easy to be pessimistic for the wider real estate market.