When talking about inflation for property we normally are talking about the rate housing prices are going up. There is though the wider inflation rate. This has been high, RPI is currently 4.5%, and the situation worldwide is looking poor.
The world has had a one off benefit with China and India starting to industrialise. This has pushed manufactured costs very low. The problem is now that commodities have increased. We all know about the effect on the oil price but it is also hitting metals and foodstuffs. The price of manufactured goods could also increase as the new economies start to consume.
Inflation hits property owners and the market in the short term as interest rates rise. In the long term it erodes the value of debt.
Fixed rate mortgage anyone.
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