From July 2015 to July of 2016, the Housing price index demonstrated a steady year-on-year growth that it has maintained for the most part since 2011.
Surprisingly, London property prices did not lead out of all the regions in the UK. The East Midlands barely surpassed them with a 13.2% annual change in house prices. London, still increasing in prices ranking in second place at with a growth at 12.3%.
However, can this be considered a good thing?
Not exactly if you look towards first time buyers. You now need an average of £205,876 cash when buying a house, and with wages not increasing at the rate alongside with housing then it will not be an easy task.
To make matters worse the Bank of England have now decided to drop interest rates to a record low of 0.25%, which had nearly brought savings into extinction. Saving up for a home on an average salary has become nearly impossible especially if the ceiling keeps rising every few months.
The public have also had every indication by the Office of National Statistics (ONS), but also by economists and advisors that prices will continue to increase in time.
The trend over the years show this:
Although, the Bank of England did imply to the public that it would need to let inflation rise in the economy, by keeping interest rates at a low. This poses as a warning to citizens as unemployment and increasing prices will hurt the consumer.
The exchange rate will also play big part of inflation. BoE governor, Mark Carney, said, “We don’t target the exchange rate … But the exchange rate does matter for inflation. Changes in the exchange rate do have an impact on inflation over a period of time.
“So we are not indifferent to the level. We are not going to target the level. We are not going to have some magic number for it. But it does factor into our thinking as we are striking that right balance in a period of adjustment.”