February House Prices Decline But Housing Market Still Attractive
For the second consecutive month, house prices in the UK declined. Experts are suggesting that consumers are putting off major expenses and investments, such as buying a house due to the lack of buying power. Inflation is putting a tight grip on household budgets and some may be putting off their dream of owning a home or upgrading to a larger property as caution comes into play.
According to Halifax, the average house price declined in January 0.6% to £223,285. In December, there was a recorded 0.8% decline in the average house price.
The Bank of England’s inflation target rate is 2.0%, but it is currently at 3% which is taking away buying power as the consumer must pay more for goods when pay growth is at only 2.4%.
First time buyers are still interested in the housing market with low interest rate mortgages available, attractive asking prices for property, and the current stamp duty waiver for properties up to £300,000.
The housing market is not expected to weaken by a great amount due to the continued factors associated that keep interest high, such as low interest rates.
Low interest rates are also still a motivator for homeowners to seek out remortgages. The opportunity to build a safety net to protect finances in the face of possible rising interest rates is hard to pass up. The Bank of England’s Monetary Policy Committee (MPC) is expected to increase the rate again this year, and that could amount to thousands of pounds in savings for some homeowners that get a remortgage deal.