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2.2% CPI inflation figure ‘doesn’t tell full story on market sentiment’
The levelling out of the consumer price index (CPI) inflation figure to 2.2% doesn’t tell the full story of costs faced by homeowners and market sentiment, GetAgent has warned, pointing out that the inflation figure including owner occupiers’ housing costs (CPIH) sits higher at 3.1%.
The rate of inflation seen across the CPIH has been largely in decline since it peaked at 9.6% in October 2022. However, when it hit this peak, it remained 1.5% below the wider CPI inflation rate of 11.1%, GetAgent noted.
The figure remained at a lower level until September 2023, but since October 2023, home owners have seen the CPIH measure of inflation sit above that of the CPI rate.
In fact, this gap has been widening ever since and while the rate of inflation seen across the CPIH may have settled to 3.1% in July, the gap between it and the CPI rate now sits at 0.9%. This means that the gap between CPIH rate of inflation and the CPI rate is the largest recorded since 2014, GetAgent emphasised.
The gradual declines in CPI rate and the cut in the Bank of England interest rate have contributed to improved market sentiment and a feeling of increased opportunity.
However, these CPIH figures show some buyers and sellers may still be hesitant around their overall financial position, the comparison site said.
Vendors will be even more reliant on an estate agent they trust to help them navigate this landscape and make sensible decisions with regards to the price they want to achieve, the budget they have to buy with, or even the pace at which they can proceed with their sale or purchase, the site added.
Co-founder and CEO of GetAgent, Colby Short, commented: “While it’s encouraging that inflation is easing, homeowners are still facing significant financial pressures, particularly when it comes to the costs associated with owning and maintaining their homes. This disparity in inflation rates means that now, more than ever, vendors need guidance they can trust.
“We’re seeing agents who are committed to going above and beyond to support vendors during these challenging times by offering expertise and advice on how to minimise costs, navigate the changing market, and tailor transactions to meet sellers’ preferred timelines and individual needs.”
Original article from Property Industry Eye – Jerome Smail
