Top UK commentator Kaletsky dispels property market fears

Leading UK economic commentator Anatole Kaletsky has dismissed three of the most widely discussed threats to the property market, saying they are 'pretty far fetched' and often presented as 'indisputable facts'.

The three threats he refers to are fears of a sharp increase in short-term interest rates, the risk of an inflationary upsurge fuelled by the vast amounts of new money being 'printed' by central banks, and the perception that governments, especially in the US and UK, have borrowed so much money that some kind of national bankruptcy lies ahead.

In a commentary ahead of his keynote address at the European Public Real Estate Association (EPRA) annual conference in September, Kaletsky argues that all three risks are unfounded and point to rising costs for long-term funding. 'As a practical consequence, those property investors fortunate enough to regain some access to debt markets are often tempted to seek protection from future rate hikes by "locking in" long-term funding at high rates. And many property valuers are feeling pressure to raise capitalisation rates on the assumption that today's exceptionally low interest rate environment cannot be sustained for long. These policies may seem prudent, but they are likely to prove costly and wrong.'

See the September edition of PropertyEU magazine for more on Kaletsky's commentary.