Fall 2006, Vol 31, No 2

Abstract: As several economic components evolve, so does the face of the UK property market. Interest rates are threatening to increase, but a growth in speculative development—up from practically nothing five years ago to £5 billion in 2005—could offset any decline in productivity. And a lack of large office space could force some sizable companies to become pseudo-developers, a situation that seems reasonable considering growth in the UK’s gross domestic product remains robust and consumer confidence is high. Yet some of the latest data suggests that real rates and money supply growth are stabilizing, which means asset price growth also might begin to stabilize.