The Bank of England said today that it had finally hit the target for inflation that was set at 2% per annum. The news was welcomed by the government and business leaders who are keen to see the recovery continue so that Britain can get back on its feet again. The news will also be welcomed by homeowners that are worried about interest rates going up.
The low inflation rate means that the Bank of England is less likely to pit interest rates up in the short term. This is most welcome, recent figures suggest that half of all mortgage holders would face financial difficulty if the rates started to increase. This is a real concern amongst financial experts who point out that the base rate is at a record low and that borrowers should seriously consider theat the rates will be going up over the next couple of years.
Most homeowners will also welcome the fact that the housing market is likely to increase further in 2014. Prices rose an average of 8% across the UK last year and further increases are expected in 2014. At last it is good to see that things are on the move again and that we may at last have some growth.
The average cost of a home in Britain now stands at £170,000 bringing it to the same level not seen since 2007. The market has seen a spike in prices over the summer with buyers looking to take advantage of the various schemes that are being offered by the government and the Bank Of England. House prices are up 6.2% so far this year and the number of house sales has increased by 7% this year and is 19% higher that they were twelve months ago.
The Bank Of England has refuted claims that we are in the grip of a property bubble because the market taken as a whole across Britain is only showing signs of recovery. If London is taken out of the equation house prices are only rising at a modest level and there is nothing to be concerned about.
In the meantime the Chancellor George Osborne has decided to bring forward the Help To Buy Scheme from January 2014. The scheme will become available this week and this will probably push prices up further. However many people feel that this is not helpful as it will just push prices beyond the reach of most families. However others feel that we should help people get on the housing ladder as it is almost a right in the UK. It’s ok for people that are sitting in their nice big homes watching prices shoot up whilst working families are forced to rent because they don’t have the deposits to buy. Atleast this levels the playing field a little.
Now they are selling ground rents for free!