Hamilton Crawford: UK Property Prices Rise Unexpectedly in January

Hamilton Crawford: An unanticipated increase in property prices may not be sustainable given the ongoing pressure on UK households.

UK property prices increased more than was anticipated in the first month of this year. Hamilton Crawford economists believe there is little chance of sustainable momentum in rising prices as households grapple with rising living costs and low wage growth.

Prices increased by a nearly 3.2 percent, up from 2.6 percent in December and were more robust than the median forecast of 2.5 percent by leading economists.

The rise was the largest since March last year and it was still well below the growth of around 5 percent at the time of the EU referendum in June 2016 when Britain voted to exit the European Union.

Hamilton Crawford economists say that in monthly terms, property prices increased by 0.6 percent last month which was the same rate of increase as the month before and stronger than anticipated by most economists.

The UK property market has declined since the Brexit referendum caused a significant decline in the value of sterling, spurring inflation and reducing domestic spending power as the pace of wage increases moderated.

Recently released data revealed that lenders gave the go-ahead on the fewest mortgages in almost three years after the Bank of England raised interest rates for the first time in more than ten years last November. Hamilton Crawford economists believe the likelihood of another interest rate hike by the BoE is high and could happen as soon as May this year.

Hamilton Crawford economists said that, given the current political uncertainty and a softening in the property sector over the last several months, the acceleration in property price growth is somewhat unexpected. 

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Source: Hamilton Crawford


Categories: Real Estate, Trade, Government

Tags: brexit, Hamilton Crawford, HamiltonCrawford, inflation, Property

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