ARK’s Market Synopsis
Last month we reflected on the impacts on buyers, advisors and those working in funding institutions of what is, for many, younger people the “new” phenomenon of inflation at 5%.
This month’s new experience is the spectre of increasing interest rates in response to inflationary pressures. It will be interesting to see how the market (People) reacts to these twin threats.
Talking of threats, last month’s concerns about Russia and Ukraine have fortunately not come to fruition (yet). Depending on how full your cup is you can choose one of two narratives – Russia withdrawing troops or the build-up is continuing. However, markets have been very resilient in the face of the threat.
2021 was a very strong year, with the highest cash increases in price since 2003. This can only be bad news for purchasers except those downsizing. This is highlighted in the Nationwide’s reporting:
“The gap in affordability across regions has widened over the past decade. In Scotland, the North and Yorkshire & Humberside, the typical buyer is located in the same income percentile as in 2011. But in all other regions, affordability has become more stretched. In East Anglia and the East Midlands the typical buyer has moved from the 50th percentile to the 70th percentile”.
The “race for space” is barely mentioned but anecdotally we believe that buyers and renters will continue to prefer homes offering great indoor and outdoor space, so careful design is essential in all sectors.
The “drive to the countryside” has maybe started to tilt back as city centres open and employers ask staff to return to offices and there is evidence that interest in flats may be increasing.
Another key “take” are the reports that house price inflation will slacken off (good news for FTB’s). So what are the reports highlighting?
To read more download the full report below.
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