Inflation below target ‘a boost for property market’
Inflation falling to its lowest level in nearly two years is set to give the property market a welcome boost, an expert says.
The UK’s inflation rate fell to 1.8% in January, down from 2.1% in December and below the Bank of England’s 2% target.
Mark Dyason, managing director of the specialist property broker, Thistle Finance, said: “With the property market under extreme pressure as we approach Brexit, inflation dropping below target couldn’t have come at a better time.
“Less financial pressure on households, coupled with low mortgage rates and high employment levels, will bolster confidence and provide a small boost to the property market.”
Dyason said inflation falling will be a “blessed relief” for developers around the UK.
“Transaction levels in areas that have seen disproportionate price growth are slow and units difficult to shift.
“Anything that can improve that scenario is a boost for Britain’s house builders.”
He said that the property market continues to slow down but the picture is being skewed by London and the South East.
“There are many areas in the UK where the property market is not far off normal.
“Regions that have experienced slow but steady growth over the past decade are now proving much more resilient in the face of Brexit and reaping the rewards.”
Today’s inflation figures released by the Office for National Statistics (ONS) said that the largest contribution to the downward trend in the consumer prices index (CPI) came from electricity, gas, and other fuels with prices falling between December and January compared to rising a year ago.
The drop in prices also coincided with the introduction of an energy price cap by regulator Ofgem.