UK property sees biggest fall in sentiment in August as rate hike concerns weigh

Dropped 9.1ppt

UK property posted the largest drop in sentiment this month following the Bank of England's decision to raise interest rates, which put pressure on the asset class, according to the Lloyds Bank Investor Sentiment index.

The monthly index, which measures net investor sentiment towards an asset class, found UK property fell 9.1 percentage points (ppt) to 4.9%, the biggest fall in August. The BoE's decision to hike rates by 25 basis points to 0.75% on 2 August, the highest in almost a decade, is thought to have had a "significant" impact on property sentiment as banks' costs translate into consumer borrowing costs. Sentiment was low across all UK assets with the BoE's rate rise expected to put downward pressure on UK gilts, which saw a drop of 6.9ppt to -9.4%. 'The UK will be OK': Managers say 'unlov...