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What is inflation and how is it affecting us? Inflation is the rise in prices for goods and services over time. Data shows that it is becoming increasingly difficult to buy a house but especially for those who are in parts of the country on low incomes. With not only house prices rising, rent is also rising. The price of the average UK house has increased by 10%. Unfortunately, wages have not followed the same pattern as house prices since 2015.
Buying and selling houses is a way for people to invest or live in. To many people, a house is the most valuable thing to ever own. In the UK, two thirds of the households own their houses. Half of these are still paying off their mortgage and the remaining third are renters. The housing market is extremely important to the economy. It is linked closely to consumer spending so when house prices go up, homeowners become better off. Then again when house prices go down, this puts homeowners at risk as their house may be worth less than their outstanding mortgage.
Overtime house prices have changed massively. the average house price was a little over £10,000 back in 1977. If we go forward 40 years, the average price has risen to £200,000. Even with the general increase of goods and services, house prices have increased around three times the amount. There are a number of things that affect house prices. One of these being that people expect to be richer in the future. This normally happens when the economy is doing well, and more people are likely to work with higher wages. Interest rates also have an impact on house costs. The lower the rates, the lower the cost of borrowing to pay for a house is. The demand for housing also means higher prices of houses could happen.
The growth in house prices for 2022 have been predicted to slow down as the year goes on. It has been predicted that overall prices will rise 3.5% this year. The question has also been asked is now a good time to buy your fist home? There is good and bad news for this. Good news is that low deposit mortgages are available which means it may be a little easier to get a loan. But the bad news is that it is very unlikely house prices will become more affordable this year. With covid 19 causing so many disruptions, it has left people feeling unsure about what the housing market holds.
Saffron Financial offer a range of different finance options for bridging and property financing. If you are looking to purchase a property or first-time house, we can help. Bridging finance can bridge the gap between your old and new property. There are many options we can help you with offering a wide range of deals and quotes from the many lenders on our panel. We are more than happy to help, and you can get in contact with us by calling 01925 594 455.