Higher House Prices increase likelyhood of Rate Rise in UK

Hometrack a property agent in London found that from a study of the UK housing market house prices in February rose by 6.4 per cent in the year to February. In January house prices rose by 6 per cent in January. This is the fastest rate for more than 3 years. The MPC place great importance on rising house prices because usually rising house prices lead to greater consumers spending and therefore increase inflationary pressures.

The main reason given for house prices rising was a continued shortage of supply. With demand for housing rising faster than supply it pushes up prices.

The average house prices is now £172,000 pounds well out of the reach of many first time buyers, but still many buyers in the market are not being put off by these high prices.


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