News

Good news on the horizon.
The Governor of the Bank of England (GBE) has announced today that he expects inflation to fall below 1% in the next six months, which pushes back any hope of an interest rate rise towards the end of next year at the very earliest (more likely beyond). You will note this is something I have been indicating for some time now and hopefully the media will start reporting reality rather than scare mongering of potential rate rises.
This is obviously good news for the home buyer, stability in interest rates gives confidence. The down side of inflation dropping like a stone indicates a slowing economy and the desperate state of Europe at the moment, which in turn has an impact on jobs, which in turn has an impact on the housing market.
The GBE said “A spectre is haunting Europe – the spectre of economic stagnation, with growth disappointing again and confidence dropping. He said he expected monthly inflation figures to remain close to 1% for  most of 2015 before heading to the 2% target (for a healthy economy) in about 3 years’ time.
The GBE expects wage growth to rebound next year with wages rising by about 3.25%, giving the stretched home owner some comfort.
The fall in inflation, fits with the current 2 year low in house price growth. It may take a couple of months for these facts to sink in, but as the cost of living comes down and wages start to increase we should surely see a more positive housing market.