Same old story, another Bank of England Thursday meeting, another rise in interest rates and more misery for home owners. Well, it may not be every meeting of late which has seen interest rates rise, but it is certainly becoming a habit. If the expectations regarding this weeks economic news is anything to go by we may soon be seeing base rates of 6% and above!
But are people really struggling?
It seems almost inevitable that Thursday’s meeting of the Bank of England committee will sanction a further quarter percent rise in the UK base rate. Recent comments by some members of the committee have led many to believe that a move upwards is almost certain, a view further strengthened by recent news confirming that property prices have risen again, and inflation is still fairly strong.
While we continue to see headlines of a rise in property prices and the government keep telling us that things have never been better, it seems that all is not well underneath the surface. Recent figures from the authorities have shown that the UK savings rate to income ratio is at the lowest for some 47 years. Currently the UK population are only placing 2.1% of their income into savings, a very similar situation to the start of the 1987 property crash!
In a move which has been expected for some time, Tesco have announced plans to move into the UK property market, offering a service to sellers in the UK. While the initial service will be fairly basic, offering sellers the chance to list their properties on a Tesco Property website, many believe that this is only the tip of the iceberg with regard to the company’s long term plans.
As the government announce an official investigation into the house building sector, it appears that the buy to let sector may also come under the spot light. The problem with UK property is the fact that the number of new house builds has always seriously lagged behind the increase in demand. This has created a situation with more and more people chasing few and few numbers of houses on a relative basis.
In what is a worrying sign of the problems associated with the Home Information Packs (HIPs), which the government are trying to force upon the property market, it has been revealed that there is a legal loophole which may allow homes to be sold without a pack in place. More problems for the government as this debacle is quickly turning into a comedy of errors!
