CEO of ARLA Calls on Letting Agents to Reduce Costs as Fee Ban Approaches
24th Sep 2018
A new report published today by the Office for National Statistics (ONS) shows that UK house prices increased by 9.9% in the year to April 2014. In England alone, this figure breached double figures, hitting 10.4%, whilst prices in Wales, Scotland and Northern Ireland all experienced sub 5% gains. London, unsurprisingly, continues to steal the limelight as prices over the same period soared a staggering 18.7%, maintaining its position as a key driving force behind the revival of the UK property market since mid 2011.
Across the whole of the UK, these inflation figures represent a four-year high and will add fuel to the ongoing debate at the International Monetary Fund that has voiced its own concerns on the impact of the property boom in the UK and the potentially far-reaching consequences of policy that has injected considerable capital into the system through the government's Help to Buy scheme.
Despite such strong house price inflation, the ONS also reported today the Consumer Price Index fell to 1.5% in May from a level of 1.8% in April. This divergence in data certainly complicates the decision on the appropriate timing to impose the first interest rate increase, which has remained unchanged since March 2009 at 0.5%. Alternatively, the Monetary Policy Committee could recommend changes to capital requirements to banks lending to higher-risk mortgage borrowers, which could prove an effective tool to cool the housing market whilst not stifling the broader economy.
First-time buyers continue to be exposed to more rapid price increases than established homeowners moving house. At this end of the market, continued price rises put growing pressure on renters to defer getting onto the housing ladder, in exchange for paying rental prices that are firmly supported by the strength in underlying asset value.
This news will only serve to supplement the recent press on the broad strength in the UK student property market, and will mean that a large number of students will leave university not only paying historic high rents for their student house, but also stepping into a housing market that has continued to soar for the entire length of their four year degree.
24th Sep 2018
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