House prices are still going up, up, up. It’s partly because wages are rising, and mostly because nobody’s building enough homes.
What it means: Homes are now 3.7% more expensive than they were a year ago, according to the bank Halifax. To put that another way, if you had your eye on a £300,000 house last year be prepared to cough up an extra eleven grand for it now.
The newspaper Reuters says the higher prices are caused by ‘a gradual pick up in wages’ (so people have more money to buy property with) and ‘limited supply’ (more people want to buy houses than there are houses available, so they bid up the price like an eBay auction).
But things may be a-changing. Last month the Bank of England raised interest rates from 0.5 to 0.75 per cent. Interest rates are the price you pay to borrow money, including mortgages. So mortgages are about to get more expensive. That might discouraged people from buying houses, either because they'd have to go into too much debt or because trying to pick the right time to buy property has become so frustrating they'd rather jack it all in and go live in the woods somewhere (or is that just us?). Either way, less people fighting over properties means prices will fall.
… most of us live in a home of friends, family, or with a partner. Our homes are like mini-economies, with their own systems of dividing up work, providing resources, and exchanging skill-sets. Not only do these affect our ideas of who does what on a wider scale, our homes themselves and where they’re located have an effect on the economy around us, and the economy we experience.