As house prices march on, what happened to 'intergenerational fairness'
The Land Registry has recorded a 2.2 per cent year on year rise. Meanwhile the official rate of inflation fell to 1.3 per cent increasing the chances of an interest rate cut
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Your support makes all the difference.Good news for savers? The headline rate of inflation fell to 1.3 per cent in December, so it might look like that.
That is, until you take into account that the already high chances of an interest rate cut just increased. That number puts it well below the Bank of England’s 2 per cent target.
One place where prices are showing some signs of life is the housing market.
On the same day, the official numbers from the Land Registry showed a 0.4 per cent increase since October and a 2.2 per cent increase in the year to November, bringing the average UK property price to £235,298.
As ever, the data is quite spotty. The closely watched London market has, for example, been torpid of late and that hasn’t changed. A 0.5 per cent fall since October was recorded with the annual rise coming in at just 0.2 per cent.
Compare that to the situation in Wales where the market is hotter than a packet of Scotch Bonnet chilli peppers. Annual growth came in at an eye popping 7.8 per cent.
The general expectation is that prices will continue on an upward trajectory. There is a caveat. This assumes Boris Johnson and his merry men don’t muck things up by bringing in the no deal Brexit by the back door some of the frothing extremists on the benches behind him still crave.
But that’ll muck up more than just a few house prices.
For now, it’s good news for those already on the ladder, not so much fun for those trying to work out how to on earth they’re supposed to get on to the first rung. That is if they can’t call upon the Bank of Mum and Dad.
Wage rises are, it’s true, running comfortably ahead of consumer prices. But they’ve started to come off, further strengthening the hand of the doves on the Bank’s Monetary Policy Committee.
It bears repeating that they spent several years lagging behind prices. There’s a lot of catching up still to be done.
They’re also just ahead of houses prices if you consider the national picture.
But affordability is declining in places like Wales, or the West Midlands, where the markets are frothy and prices are off to the races. A rate cut mightn't be much fun for older savers struggling to find yield, but really, their problems pale by comparisons to those facing young people.
It again raises the question of intergenerational fairness. Is anyone even talking about “intergenerational fairness” any more? They really ought to be.
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