How does rising inflation affect house prices? 🏘

Consumer price inflation (CPI) has risen to 5.4% 📈in the 12 months to December 2021. This is the highest rate in 30 years, but is expected to fall back after an April peak (ONS).

⚡️Energy costs are a major component of price rises and this is likely to turn the spotlight 🔦 on energy efficient homes. 🏘

The key 🔑 driver of house prices and affordability is interest rates, which are expected to remain low in the long term, despite a small rise to 0.5% 📊 widely expected in February. 

Other drivers of demand, which are expected to continue, are lifestyle changes 👨🏼‍💻👩🏽‍💻 and deposits saved 💰during the pandemic. 

Source: Dataloft, ONS, Bank of England