This month’s article will focus on one of my major areas of research in 2023 - just how well priced, or not, is UK residential property at the moment?

There are a few ground rules I will need to establish before getting into this, however. Firstly - let’s all agree we have an obsession as a nation to discuss, and obsess over, the price of houses. This is never done within any sensible context - inflation, for example. Wages. Supply of new homes. Supply of suitable or demanded new homes. Nope - just the average house price, and a whinge, particularly from those who see housing as a human right and forget that market forces ultimately, with Jeremy Corbyn and John McDonnell back in their respective boxes, will determine the price of housing.

Secondly - very few commentators have had a sensible viewpoint about what happens in inflationary times. Few have discussed whether this might be good, or bad, for property investors. Even fewer have gone back to times of previous inflationary cycles and discussed the resulting markets - whether that be the 60s, 70s, or early 90s. Even for those who have (me, for example) - the problem is that there is always a tendency to find the reasons why “this time is different”.

Are we smarter than we were in 2007, for example? How about 1928? Or at many points you could pick during the 1970s? Arguably, we are - but the solution at this time always seems to be the same. Puff up some pillows, put out some cushions, and ensure a softer landing for the royal British backside, rather than a painful economic pill like our historical predecessors would have taken.

That’s a good thing though, right? Well, it depends - because you can only go to the well so many times. The debt goes up and up. Servicing the debt becomes more of a problem, and then MUCH more of a problem when rates escalate gigantically, as they have done in the past 24 months. The phrase “fiscal drag” is wheeled out - if you haven’t heard it yet, it is the amount of tax, or potential Government spending, that is instead spent servicing the debt.