Rolling coverage of the latest economic and financial newsUK house prices rose 0.9% in November, says NationwidePrices 10% higher than a year agoBut Omicron variant and inflation mean outlook is uncertainMartin Beck, senior economic advisor to the EY ITEM Club, predicts house price growth will slow next year — which might help first time buyers onto the housing ladder.Stamp duty back at its normal level is not the only headwind facing the housing market: household income growth faces pressures from higher inflation and tax rises, while uncertainty stemming from the new Omicron variant could hold back potential buyers until the situation is clearer.“Moreover, despite the Bank of England’s MPC adopting a more hawkish tone on the prospect of interest rate rises, mortgage rates fell to a record low in October. And uncertainty stemming from the new Omicron variant reinforces the EY ITEM Club’s expectation that the MPC will hold off raising rates until next year.So, while house price growth is likely to slow during 2022, an outright fall seems unlikely.”It is unclear what impact the new ‘Omicron’ variant will have on the wider economy. While consumer confidence stabilised in November, sentiment remains well below the levels seen during the summer, partly as a result of a sharp increase in the cost of living. Moreover, inflation is set to rise further, probably towards 5% in the coming quarters.Even if economic conditions continue to improve, rising interest rates may exert a cooling influence on the market. Indeed, house price growth has been outpacing income growth by a significant margin and, as a result, housing affordability is already less favourable than was the case before the pandemic struck. Continue reading…
Source : theguardian.com
Read more…UK house price rises accelerate in November, but outlook remains uncertain – business live
