The combination of rising inflation, political uncertainty stemmed from Brexit and slower wage growth (despite the increased levels of UK employment) exerts further pressure on UK consumer and household budgets. As a result of this, the growth of the UK economy is anticipated to remain ‘sluggish’ over the upcoming months as disposable incomes are squeezed even further for most.
With relation to property, tougher trading conditions for mortgage lenders is anticipated. According to Nationwide, total mortgage lending reduced from £17.5bn to £16.7bn which reduces overall profits for mortgage lenders. Interestingly, Rightmove reports that for UK homeowners who are trying to sell their residential homes, over a third have already been forced to reduce their asking price in order to accommodate the reduced levels of consumer and household incomes. For first-time buyers, this is a positive step forward which should be taken advantage of if possible.
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