The latest information on the housing market from the Office of National Statistics (ONS) reveals that becoming a homeowner is unsurprisingly very difficult. The average earnings have doubled since 1997, but the average house price has increased by 4.5 times. Homes in England and Wales have not been affordable for hopeful home buyers in over two decades. The last time homes were considered affordable when comparing the ratio of earnings to the average house price was 2002.

On Thursday, the Bank of England’s Monetary Policy Committee (MPC) met and the majority of the members voted to hold the current standard base interest rate steady at 5.25%. It marks the fifth consecutive meeting of holding the rate. It did not surprise economists nor other experts for there were few expecting a rate cut even if inflation declined, which it did. Inflation had declined to 3.9% in November but increased to 4.0% in December and January. The latest report on inflation for the twelve months to February revealed it had declined to 3.4%. No longer sitting at double the target rate of 2.0%, it signals the peak base rate was reached at 5.25%, and the MPC will likely begin voting for a cut in the first half of the year.

The Bank of England’s Monetary Policy Committee (MPC) will meet on Thursday. The day prior, on Wednesday, the latest information about inflation will be released. The members of the MPC will take the February inflation report into account and determine how the current standard base rate is doing in curbing spending in the shadow of wage growth. The expectation is they will determine the current base rate as sufficiently impacting inflation and will leave it steady, even if inflation declines from the last reported 4.0%.

In the latest data released by online property listing website Rightmove, the average house asking price jumped by the largest increase in ten months to almost £370,000. The £5,279 increase to the average asking price is a significant amount considering the Bank of England’s standard base interest rate has remained steady at 5.25% since September 2023 and inflation has rested at double the target rate at 4.0% in December and January. There is little in the economy to have signaled such a significant increase of buying in the housing market.

Next week the newest inflation report will be released. That will be on 20 March, and the following day will be the Bank of England’s Monetary Policy Committee (MPC) meeting. The target rate set by the Bank for inflation is 2.0% and the current rate is double that at 4.0%. This time last year, inflation was in double digits, so while the inflation rate is double target it is moving in the right direction, or at least it was for a while. In November, inflation had dropped to 3.9%, but increased to 4.0% in December and remained the same in January. The March report is expected to show a decline in February to 3.6% according to a poll of economists by Reuters.

Optimism among UK estate agents has grown to the highest level in two years. The Royal Institution of Chartered Surveyors (Rics) recent house price expectations score doubled to 36 in February from January’s score of 18. The February score is the highest since June 2022. The Rics report offers a strong insight into the housing market through the opinion of estate agents. Their hands-on experience within the market offers a unique viewpoint of both the current and near future market.