Andy Sommerville Comments on the Fourteenth Consecutive Bank of England Interest Rate Rise

Andy Sommerville , Director at Search Acumen, the property data and insight provider, comments:

“The impact of another interest rate rise will force the wider commercial market to assess its growth prospects in the short-term, as the prevailing high cost of debt slows investor demand.

 “This drag on spending is putting both the momentum and resilience of the private sector to the test, as the short to mid-term outlook appears as clear as mud.

 “However, lower property valuations are likely to facilitate an uptick in opportunistic purchases in both commercial and residential, meaning those in the long game will see the best returns.

“Larger entities with less debt are likely to continue to expand their portfolios and diversify investment streams to withstand future uncertainties. Although the office sector continues to take a hit, we’ve seen industrial sectors fare better in the last few months, alongside health care and life sciences. Early indications for Q3 suggest that the investment market in the second half of this year will be more active than the first.

 “But to maintain stable growth, the cycle of prolonged rate rises must come to an end. It is essential for the UK’s economic future that all investors can confidently participate in the market, particularly in our built environment as a key indicator of wider business growth.

 “In cycles of market uncertainty, it is more vital than ever for investors to transact quickly and efficiently, whilst feeling confident that the due diligence of their onward purchase is reliable and thorough. The use of technology in our sector plays an absolutely vital role in transaction resilience, ultimately ensuring less deals fall out of bed. With a range of external headwinds at large, the time for digitalisation to move further up the priority list is now.”