What does rising inflation mean for property?

Guy Glover, manager of the F&C UK Property fund, gives his outlook for the sector after a turbulent 2016.

Five years ago, we looked at the prospects for property if the inflation rate moved higher. As it turned out, the period saw an inflation rate averaging a mere 1.4% per annum and the topic fell from favour. This has changed with the election of Donald Trump, some stabilisation of commodity prices, and the impact of a weaker sterling on UK prices post the Brexit vote. Inflation forecasts are being revised higher. The consensus is for inflation to move above target next year and Bank of England data shows the top decile estimates for Q4 2017 to Q4 2019 at around 4.5% per annum. Infl...