The recent decision by the Bank of England to raise its base rate has stirred discussions among experts about its potential impact on the UK housing market. A panel of experts weighed in on the matter, revealing a divided opinion ...
On the flip side, 60% of the experts are optimistic, believing that the UK will dodge a housing market crash. They cite factors such as a decrease in construction activity, which could limit the supply of homes for sale, and cash-rich property investors who might buy properties during weak periods. Additionally, the recent surge in average rents could make buying-to-let more appealing.
However, the majority anticipate the base rate to reach 5.5% or higher by the end of 2023. This expectation stems from the UK's ongoing battle against inflation, which remains a significant concern. The UK's Consumer Price Index (CPI) is currently running at nearly four times the BoE's target rate of 2.0%.
Factors such as the UK's vulnerability to rising oil/energy prices and structural issues in its labour market are cited as reasons. Additionally, post-Brexit challenges and the need to reshape the UK's labour market are also contributing to inflationary pressures.
While the future remains uncertain, it's evident that the Bank of England's decisions and the broader economic landscape will play pivotal roles in shaping the UK housing market in the coming months.
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