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Official figures show inflation has held steady at 2% over the past 12 months but the detailed briefing from the Office of National Statistics also reveals that property costs remain at historically high levels.
The headline inflation rate has remained the same now for 12 months helped by lower clothing and footwear costs, but when property ownership costs are included within the figure is 2.8%, pushed up by a 6.8% rise over the same period.
This is a historical high – the last time it hit this figure was the difficult period following the 1992 financial crisis.
Nathan Emerson (pictured), CEO of Propertymark, says: “The positive news from today’s figures is that inflation remains in line with the Bank of England’s target of two per cent, which means that consumers should not continue to witness the price rises we saw across 2022 and 2023.
“Although a further drop in inflation today would have been welcome by consumers, Propertymark is keen to see the Bank of England consider a dip in interest rates as soon as sensible. When the pathway to lower interest rates finally happens, we should witness a real boost in affordability and flexibility within the housing market.
“But the progress is real and the fact the headline rate of CPI has held steady at the Bank of England’s 2% target for two months in a row suggests the worst is past.
Commenting on the likely effect of the announcement on the Bank of England’s looming base rate decision in two weeks, Paresh Raja, CEO of Market Financial Solutions says: “It’s crucial to acknowledge that the base rate won’t be cut as quickly or significantly as it was hiked. Brokers will need to support borrowers and manage expectations accordingly.
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