UK Homeowners Continue to Face Higher Rate of Inflation

The latest analysis by estate agent comparison site GetAgent.co.uk has revealed that while topline inflation (CPI), the Government’s main measure of inflation for macroeconomic management purposes, may have eased to 2.2%, the ONS headline measure of inflation (CPIH), which includes costs associated with owning, maintaining and living in a home, remains much higher at 3.1%.

GetAgent analysed historical data from both the CPI and CPIH to see how the two currently differ and whether homeowners are currently as better off as the topline economic picture suggests.

The figures from the CPI show that: –

The rate of inflation has been gradually easing since the peak of 11.1% seen in October 2022. It is now sitting at 2.2% for July, having been at 2.0% for the previous two months of May and June.

The rate of inflation seen across the CPIH has also been largely in decline since it peaked at 9.6% in October 2022. However, when it hit this peak, it remained 1.5% below the wider CPI inflation rate of 11.1%.

It remained at a lower level until September 2023; however, since October 2023, homeowners have seen the CPIH measure of inflation sit above that of the CPI rate.

In fact, this gap has been widening ever since. While the rate of inflation seen across the CPIH may have settled at 3.1% in July, the gap between it and the CPI rate now sits at 0.9%. This means that the gap between the CPIH rate of inflation and the CPI rate is the largest recorded since 2014.

The gradual declines in the CPI rate and the cut in the Bank of England interest rate have contributed to improved market sentiment and a feeling of increased opportunity. However, these CPIH figures show some buyers may still be hesitant about their overall financial position.

These vendors will be even more reliant on an estate agent they trust to help them navigate this landscape and make sensible decisions with regard to the price they want to achieve, the budget they have to buy with, or even the pace at which they can proceed with their sale or purchase.

Co-founder and CEO of GetAgent.co.uk, Colby Short, commented, “While it’s encouraging that inflation is easing, homeowners are still facing significant financial pressures, particularly when it comes to the costs associated with owning and maintaining their homes. This disparity in inflation rates means that now, more than ever, vendors need guidance they can trust.

“We’re seeing agents who are committed to going above and beyond to support vendors during these challenging times by offering expertise and advice on how to minimise costs, navigate the changing market, and tailor transactions to meet sellers’ preferred timelines and individual needs.”