Many factors can affect home prices, including supply and demand, interest rates and the economy. Inflation affects house prices, causing house prices to rise or fall.
The Office for National Statistics said yesterday (23 June) that inflation in the UK had risen again, the highest in 40 years. As the cost of the health crisis worsened, analysts reported that inflation rose from 9.1% in May to 9.1% in April.
As the price of goods and services rises, inflation can drive up house prices. As inflation reduces the amount of money people can spend on homes, potential buyers, especially first-time buyers, will be shut out of the market.
Along with inflation, property prices in the UK have soared in the past year alone. Property prices on the market in May broke records for the fifth consecutive year, with the average UK property price recorded by Rightmove at £368,614.
That’s 6% more than in May of last year and more than double the average house price in May five years ago.
The impact of inflation on the cost of living could delay first-time buyers saving their savings on a house in Manchester, according to a new study, suggesting inflation could hit a 40-year high and rise further by 10%, a new study found. Online mortgage company Mojo Mortgages analyzed average house price data from Zoopla and salary data from the Office for National Statistics to estimate the effect of a 10% cut in savings due to inflation.
If someone in Manchester earns an average salary of £26,596, inflation may take 16.6 years to save a 15% down payment on an average £238,519 property, a mortgage lender has claimed.
Although Manchester buyers save a 5% down payment, the impact of inflation will add a further three years of savings. A lower deposit means fewer loan options and higher interest rates.
“The good news is that mortgage rates are still low, so there’s a good deal for those who can save. Not everyone is lucky enough to have financial support from parents, but if first-time buyers can reduce debt, set a tight budget, and be able to shop with a friend or partner, the goal of recouping the keys to their first property yes: it is possible. . More can be done.”