Larry Elliott in the Guardian considers the climate for the property sector, saying the market is “running hot”, with demand high since the end of the first lockdown and both prices and mortgage approvals up on pre-pandemic levels. He says all measures of house price inflation show annual increases in excess of 10%, with Halifax data showing the price of the average UK home rose by more than £28,000 in the past year. Mr Elliott highlights that demand for residential property exceeds supply even though interest rates are climbing and households face “the biggest squeeze on their living standards in decades.” He suggests that a hit to living standards caused by prices rising faster than wages has dented consumer confidence, with this possibly slowing the market in the coming months. He also warns that central banks are under pressure as high levels of house price inflation are starting to be matched by high levels of consumer price inflation.
The Guardian
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