House prices stabilise.

The decline in house prices slowed to a crawl at the start of the year, but a significant correction in the

average home price is still expected as borrowing costs mount.

The typical UK property now costs £281,684, down by £29 from £281,713 last month, according to figures published by Halifax, Britain's biggest mortgage lender. It follows more significant falls of 1.3 per cent in December and 2.4 per cent in November.

Households are facing record falls in living standards owing to the cost of living crisis, repeated interest rate rises and a slowdown in the global economy.

The average home price is now about £12,500, or 4.2 per cent, cheaper than it was at its peak in August last year, but it remains about £5,000 higher than the average January 2022.

Mortgage rates have jumped over the past year in line with the base rate of interest, which has risen from a historic low of 0.1 per cent in December 2021 to its present level of 4 per cent.

Lower house prices and the potential for interest rates to peak below the level anticipated last year should improve home buying affordability over time."

Tom Bill, head of UK residential research at Knight Frank, the property consultancy, said the start of 2023 provides a better guide for house prices than the declines recorded at the end of last year.

"The poor performance of the UK housing market in the chaotic final months of last year is not a useful barometer for 2023," he said.

www.sba.tax

Comments

Cloud Bookkeeping

US FED rate rise.

The US Federal Reserve officials have indicated that they plan to resume increasing interest rates to control inflation in the world's biggest economy. During the June meeting, the Federal Open Market Committee reached a consensus to keep interest rates stable for the time being to evaluate whether further tightening of policy would be necessary. However, the majority of the committee anticipates that additional rate increases will be required in the future. The minutes of the meeting have recently been made public. According to the minutes, most participants believed maintaining the federal funds rate at 5 to 5.25 per cent was appropriate or acceptable, despite some individuals wanting to raise the acceleration due to slow progress in cooling inflation. Although Fed forecasts predicted a mild recession starting later in the year, policymakers faced challenges in interpreting data that showed a tight job market and only slight improvements in inflation. Additionally, officials gr...

EU business slide.

S&P Global’s flash eurozone composite purchasing managers’ index, a key gauge of business conditions for the manufacturing and services sector, fell 1 point to 47.1, figures showed yesterday. That is its lowest level since November 2020 and the fourth consecutive month below the crucial 50 mark separating growth from contraction. One of the few bright spots in the survey was that companies in all sectors reported a slight easing of cost pressures, price growth and supply chain constraints. However, prices charged for goods and services still rose at the sixth fastest rate since such data started in 2002. Jobs growth increased marginally from October but remained low compared with the past 18 months. Following a few months of falling price pressure in manufacturing and services, the October print shows an overall stabilisation said Jens Eisenschmidt, chief European economist at Morgan Stanley. However, German businesses, at the hub of Europe’s energy crisis, reported that manu...

Tariffs on UK electric cars.

The European Commission has confirmed that it will continue with its plan to impose tariffs on electric cars exported between the UK and EU starting next year. This is due to the "rules of origin" requirement that mandates EVs traded across the English Channel to have 60% of their battery and 45% of their parts sourced from the EU or UK or face a 10% tariff. A senior Commission official, Richard Szostak, recently informed parliamentarians from the UK and EU that the bloc's battery investment has significantly declined, making the tariffs necessary to encourage domestic production. In 2022, the EU's share of global investment in battery production shrank from 41% to only 2% after the US offered substantial subsidies through its Inflation Reduction Act. Starting in 2024, car manufacturers in the UK will need to have 22% of their sales come from zero-emission vehicles, which means they may need to import EVs from the continent to meet this requirement. If EU carmakers ...

Search This Blog