Bank of England hikes rates as it predicts 13% inflation and long recession

Bank of England hikes rates as it predicts 13% inflation and long recession

Base rate raised by 0.5 percentage points to 1.75%, as Bank says inflation will hit 13% in October​.

Vladimir Putin’s invasion of Ukraine has left Britain on course for a recession lasting more than a year and inflation above 13%, the Bank of England has warned as it raised interest rates for a sixth successive time.

Threadneedle Street said it had no choice but to increase borrowing costs by 0.5 percentage points to 1.75%, blaming Russia for cost of living pressures not seen in more than four decades and a 5% drop in living standards straddling this year and next – the biggest since records began in the 1960s.

Andrew Bailey, the Bank’s governor, said “there is an economic cost to the war”, as he predicted the economy was on course for a period of stagflation – a recession combined with a soaring cost of living.

While accepting the biggest increase in interest rates in 27 years would cause pain, particularly to the least well-off, Bailey said the Bank needed to take action to prevent spiralling price rises from becoming ingrained. Read more from The Guardian article >

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House price growth back to pre-pandemic levels

House price growth back to pre-pandemic levels

House prices growth slowed in May, to levels not seen since December 2019 according to the latest Zoopla data.

House price growth back to pre-pandemic levelsThis slowdown comes after two years of unprecedented growth in property prices. Much of this growth has been driven by a ‘race for space’ post pandemic, and attractive short-term stamp duty reductions.

But Zoopla points out that despite this lower rate of growth it is still a sellers’ market, with overall demand for housing across the UK significantly higher than the five-year average.

In total Zoopla figures show that annual property prices were up 8.4%, compared to 9.2% growth in April. On a quarterly basis prices are up by just 1.4%, the slowest growth since March 2021. Read more from Mortgage Strategy article >

 
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UK house prices in March rise 9.8% on annual basis

UK house prices in March rise 9.8% on annual basis

House prices in the UK have increased 9.8% in March on an annual basis, with the average property in the UK being valued at £278,000, according to the latest UK house price index data from the Office for National Statistics.

The data found that house prices in the UK have decreased from 11.3% in February this year.

House prices cooled in March relative to February and we can expect more of this throughout the year given the frightening level of inflation. The Stamp Duty holiday, record low interest rates and the race for space triggered an unprecedented surge in demand and activity during the pandemic, but those days now seem to be over.

Average house prices increased over the year in England to £298,000 (9.9%), in Wales to £206,000 (11.7%), in Scotland to £181,000 (8.0%) and in Northern Ireland to £165,000 (10.4%).

London continues to see the lowest annual growth, as average prices increased by 4.8% over the year to March 2022, down from 7.8% in February 2022.

Despite being the region with the lowest annual growth, London’s average house prices remain the most expensive of any region in the UK, with an average price of £524,000 in March 2022.

The North East continued to have the lowest average house price at £155,000. Read more from Mortgage Stragegy >

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10 out of 10 service rating for Walker Beckett Mortgages

10 out of 10 service rating for Walker Beckett Mortgages

“Following 10 years in rented accommodation, we never believed that we would be in a position to secure again a house of our own, certainly not for the foreseeable future. Steve Beckett changed that. We collected our keys to our new home this week, and are incredibly thrilled, and more than anything very grateful to Steve, we would not have done this without Steve, we are quite sure on that.

 

Steve was recommended to us, and we didn’t know what to expect from a financial advisor other than to provide mortgage advice.

 

Steve took over the entire process for us, requesting all the information from us to look at the best options available, kept us updated on a daily basis, he was incredibly thorough and dedicated. We are sure that due to Steve’s expertise, and knowledge of many lenders and their criteria, plus Steve must have many clients at any one given time, he really did make us feel like his whole attention was on us to try to secure us a mortgage.

 

Steve kept our spirits up, reassured us, was very positive, incredibly supportive, and open and honest.

 

We have also used Steve to arrange our building and life insurance cover as we trust him in securing the best cover available to us.

 

We cannot thank Steve enough, and would highly recommend his expertise, and immense support.“
Customer Feedback: Julie & Steve in Accrington

Many thanks for the feedback, it is always very encouraging when our work is appreciated and great to see another customer get a good deal.

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Spring Statement: Homeowners get green boost with VAT cut

Spring Statement: Homeowners get green boost with VAT cut

Chancellor Rishi Sunak Spring Statement was a low key affair regarding housing policy, but he did announce a VAT tax cut to zero for energy efficiency upgrades.

Spring Statement: Homeowners get green boost with VAT cutThe Chancellor said with rising energy costs, it was now more important for homeowners to make sure their homes were as energy efficient as possible.

Sunak said for the next five years, VAT would be removed entirely on the likes of solar panels, heat pumps and insulation.

Prior to his announcement, improvements such as these were subject to a lower 5% VAT rate, but the chancellor criticised the “complex rules about who is eligible”.

The chancellor claims his plan will save the average person installing solar roof panels more than £1,000, while they would save approximately £300 on their energy bills. Read more from Mortgage Strategy article >

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