According to Bank of England data, household deposits with banks and building societies rose by £8.4 billion in June. The data has shown continued growth this year, meaning we are saving more than we are spending.  

As I write, the Bank of England has just made the first reduction in the interest rate since March 2020, off the back of inflation (CPI) reaching the targeted 2% in May and June. In the short-term, inflation is expected to rise before falling back again. Although expected, this is confidence boosting and will have positive effect on the housing market.

Another key metric from the Bank of England is money supply data – since March the supply of money has been increasing month on month.  Data for June shows a 1.2% increase compared to the year before. This increased money supply is a good indicator of the economy and house prices.

Real wages (wages adjusted for inflation) are now increasing at the normal rate of 2% per annum.   

Nathan Emerson, CEO of Propertymark, has predicted “pent-up demand and robust stock levels will see increased activity towards the end of the summer period”.

Referencing Nationwide Building Society real house price data (UK house prices adjusted for inflation (RPI) to show real house prices), real house prices are now the same as they were in 2003. If you look at the trend line from 1975, we are significantly behind the long-term trend in house prices. Add to this the Bank of England bank rate is similar to 2003 (4.75% to 5%) and real wages are higher. Lending criteria have been significantly loosened recently, yet, I acknowledge, not to the extent it was in 2003. Over five years from January 2003, we saw a 49% increase in UK house prices according to Land Registry data.  Subsequently, there was a correction in 2008, although lending criteria are much better regulated now.

This summary of data indicates we could be at the bottom of the cycle, with house prices set to increase significantly over the coming years.

Through May, June and July there was 15.4% more property advertised for sale than the 10-year average across the North Cotswolds and surrounding countryside – great news for buyers as they have an excellent opportunity to secure their new home or investment.  

For in-depth advice and strategy to secure the sale of your home or investment, please call in to our office in Moreton-in-Marsh, phone 01608 651188 or book an appointment at haymanjoyce.co.uk.