Inflation target change won’t turbocharge house prices

Given interest rates are already very low, we doubt any additional stimulus introduced because of the change to the inflation target will provide a significant boost to the economy or house prices. Indeed, the past relationship between interest rates and house prices is weak. That said, record low mortgage rates have already helped push home sales to 15-year highs, and the risks to our view that house price growth will slow to zero by early next year lie increasingly to the upside.