Low inflation means low interest rates
The latest inflation figures show the annual inflation rate fell in September by 0.2 per cent to 1.1 per cent, the lowest level since March. This is good news for those worried about the prospect of future interest rate rises.
The falling inflation rate, which took analysts by surprise, takes the pressure off the Bank of England’s monetary policy committee to raise interest rates; several economists are now predicting that the base rate will remain at its present level of 4.75 per cent for the rest of the year.
The inflation rate, however, is still expected to rise again, according to the Bank of England.
Surprise upturn in house prices
House prices rose by 1.4 per cent in September according to Halifax, the UK’s largest mortgage lender. The surge in house price inflation followed a small fall in August, and the Halifax says that the annual rate of house price inflation now stands at 20.5 per cent.
Nationwide recently reported figures for September housing a 0.2 per cent rise in September, up from 0.1 per cent in August.
Investors head north
Hunters Estate Agents is seeing a surge in buying in the North of England. Many professional investors from the South and overseas currently view the North’s property market as one of the UK’s best performing property hotspots, according to Steve Arksey, regional manager of Hunters Land and New Homes.
‘Many exhibitors at this year’s Property Investor Show have reported a major fall in sales activity compared to this time last year,’ says Arksey. ‘However, Hunters has been inundated with enquiries from investors that genuinely believe there is plenty of room for the North’s property market to continue growing – even if it will be at a slower pace than over the last three years.
‘This has been reinforced by record volumes of lettings being secured through Hunters’ Manchester, Leeds and York offices. The average time taken to secure a new let is now less than two weeks and voids are virtually non-existent.’
One in three miss out on low rates
New research from Alliance & Leicester has found that one in three consumers overlook the most important factor – the rate of interest they will be charged – when choosing a loan. Thirty-five per cent of consumers admit the annual percentage rate or “APR” is not the first thing they look for when choosing a loan.
Andy Bayes, head of personal loans at Alliance & Leicester, said, ‘While two out of three people rightly focus on the rate of interest when choosing a loan, there is still a large number of people who pay over the odds by not giving it their full attention.’
Among those who said the rate of interest is not their main priority, 37 per cent thought all banks’ loans are similar; 19 per cent said they did not fully understand APRs; and 13 per cent though a couple of per cent would not make much difference to the cost of their loan.