Inflation – Is It Good or Bad for the Thanet Property Market?

The latest Consumer Prices Index (CPI) released by the Office for National Statistics revealed that inflation increased from 1.7% in September to 2.3% in October.

But how exactly does inflation impact the property market?

There is a link. But it is not quite as simple as it might seem.

When inflation rises or falls, it does not necessarily mean that house prices are rising or falling. The CPI, the main measure of inflation in the UK, does not include house prices or mortgage costs – although it does include rents.

Rising inflation increases the price of nearly everything we buy and can affect house prices indirectly. If people have less disposable income, they may be less likely to move house or make lower offers, putting downward pressure on prices.

Conversely, when inflation falls, disposable incomes increase, potentially boosting house prices. Inflation also impacts interest rates, which in turn affect mortgage costs. The Bank of England adjusts interest rates to maintain inflation around its 2% target, influencing mortgage affordability.

For landlords, inflation almost always pushes up rents. While this can benefit rental yields, it increases costs for tenants. Over the long term, property prices tend to outpace inflation. A study by Avison Young found that property values beat inflation 85% of the time over 5-year rolling periods since 1985.

Ultimately, a well-priced, well-presented property in Thanet is likely to find a buyer, regardless of inflation trends. Whether you’re buying, selling, or investing, Cooke & Co is here to guide you through the market with expert advice.

Contact us today to learn more about your property’s market potential.

About Cooke & Co

Cooke & Co has been providing estate agency services in Thanet since 1992, covering Margate, Broadstairs, Ramsgate, and surrounding areas.

Contact us:

• Margate Office: (01843) 231833
• Ramsgate Office: (01843) 851322
• Broadstairs Office: (01843) 600911

Visit our website at www.cookeandco.com or email us at enquiry@cookeandco.com.