Will this mean we see some rates rising? Banks need £11bn more for a very rainy day https://t.co/JCEwLgkaQx
21st February 2017
It has been a week of things going up so-to-say as UK consumer prices rose at their quickest pace since 2014, by 1.8% compared with this time last year. It was also reported that factory prices soared more than 20%. This has all been pushed by the fall in Sterling and higher world oil prices.
With the Bank of England expecting inflation to hit around 2.7% this year and the US looking at increasing rates another 4 times, so they say, it will be interesting to see if the Governor can keep Bank Base at its current low.
Meanwhile house prices are still on the move, edging up even further with the Your Move Index saying that the average price in England and Wales is now above £300,000. According to the latest Land Registry and ONS figures however, house prices are rising faster across England than in London where Stamp Duty changes are really biting.
Reportedly, even foreign billionaires are renting at the moment rather than having to pay Stamp Duty which is all sure to effect Government coffers in due course. According to LonRes “Lettings that cost more than £3,000 a week increased by 28% in the last three months of 2016”.
2016 ended with UK house prices rising by 7.7% to £236,000 and 7.5% in London to £483,000.
Meanwhile, landlords are purchasing properties for cash at a record level, with some 61% of investors purchasing without a mortgage according to Countrywide, whilst BTL mortgages have fallen by a third.
So, it is now not the landlords causing price rises but First-Time Buyers who accounted for a record £53.6 billion of mortgage loans in 2016 according to the CML. That is up 13.5% since 2015 and the highest level since the CML started collecting these stats in 2006!
So are all the Government, Bank of England, PRA policies working or just jumbling themselves up into a mish-mash of nonsense that actually proves the perennial point: we just need to build more bloody houses and increase supply, period.
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Andrew Montlake, Director and Spokesperson for Coreco, gives his honest and forthright views on the mortgage market, economy and all things property related. Monty was voted "Mortgage Personality of the year 2008", "Best Press Spokesperson" in 2011 and is the current holder of the British Mortgage Awards “Best Marketeer” title. Expect expert analysis, delivered in a down to earth style with a side helping of exuberance.