The UK is forecast to have a rising population. By 2031 the population is forecast to rise to over 70.1 million. The majority of this rise is forecast to occur in southern England. Given limitations on building houses, it is likely to be a significant upward factor on long term house prices in the UK. [...]

In the budget, the chancellor announced a scheme to help first time buyers on the property ladder.  Under the first buy scheme, the government and the housebuilders will jointly provide a 20 per cent loan to top up first-time buyers’ own deposit of 5 per cent. This will allow them to take out a mortgage [...]

The UK housing market is being adversely affected by the difficult economic situation. It is the first time in 30 years that the UK is experiencing a sustained fall in living standards due to low wage growth and high inflation. Part of the fall in living standards is due to temporary factors tax rises (VAT) [...]

Link between economic growth and inflation. Late 1980s was a classic boom and bust. Economic growth of 5%, rising inflation. Then the brakes were applied. Higher interest rates, causing a fall in economic growth and inflation. Note there is a strong link between economic growth and house prices. The 80s boom in growth led to [...]

When looking at house price growth, we tend to ignore the effects of inflation. However, if house prices are stagnant in a period of 10% inflation, this is effectively a 10% fall in real terms. If house prices are stagnant with 0% inflation, house prices maintain their real value. Inflation has a big impact on [...]

The green line shows the growth in rent costs. During the boom years 1997 – 2007. the cost of renting was rising faster than inflation. Since the housing crash the growth in renting costs has fallen below inflation rate. This is to be expected with rising house prices it pushes more people into the rented [...]

Historical UK Inflation Inflation has reduced the value of money. Rising prices means money buys less than it used to. See: Definition of Inflation Inflation in 1960s and 1970s. Inflation Since 1989

It is always dangerous to look at historical house price data and try and infer future house price cycles based on past evidence. Some have talked of a 18 year house price cycle Certainly there are certain factors that encourage the cyclical nature of house prices. Momentum Effect. When house prices have been rising for [...]

Graph showing mortgage payments as a % of take home pay (disposable income) Although there has been an improvement in mortgage affordability, it still takes a high % of income, especially in London. If interest rates are increased from 0.5% the % of disposable income spent on mortgage payments could return to 2006, 2007 levels. [...]