An analysis from Leeds Building society has concluded that housing is less affordable now than in 1999 when rates were around 15% (compared to an average 2 year fixed rate of 6.43% today). This is due to house prices continuing to increase and at present, the average mortgage accounts for 45.1% of disposable income compared to 11.3% in 1999.
The Welsh Government has confirmed that LTT (Land Transaction Tax, the equivalent of stamp duty in Wales) has been increased from £180,000 to £225,000 as of 10th October 2022. This means that those buying properties for less than £225,000 will pay no LTT providing it is the only property they own. There has also been a n increase in LTT for homes between £225,000 and £400,000 which has been raised from 3.5% to 6%.
The Government’s mini budget introduced Stamp Duty cuts which could save the average homebuyer in England up to £2,500 and first time buyers around £8,750 according to the latest house price statistics. The difficult market conditions following the Bank of England Base rate increase means this is a welcome change for many people looking to get on the property ladder.
There is increasing concern that the Bank of England will again increase base rate with the general consensus that we will be at 1.75% by the end of the year. With inflation currently at 9.1%, a 40 year high, if rates do increase it is also expected this will hit 11% by 2023.
The Bank of England has today (16th December) increased base rate from 0.1% to 0.25%, the first increase since August 2018 as a result of inflation rising. This means savings will achieve higher returns but it’s bad news for mortgage owners on trackers and variable rates as their payments will increase. Speak to one of our advisers about fixing your mortgage payments.
Nationwide Building Society have today published their House Price Index (HPI) for November 2021. Growth has increased again month on month by 0.9% and has now reached double figures to hit 10% against the same time last year. As a comparison pre pandemic, house prices across the UK are 15% higher than in March 2020. The housing market remains strong but there are signals that this may level off in 2022.
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