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Price Falls And Inflation

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When prices do fall they will be counter inflationary. Will we have to argue that falling house prices should not be considered when referring to inflation or will we just have to argue that house price inflation should never have been removed from the inflation statistics? Likewise will we have to argue that estate agents are actually really good people because the ones that survive will realise that what they need to pay their morgage is a buyer not a seller and they will not want to loose someone who is prepared to buy into a falling market? Recent buy to letters may even be deemed benevolent as they are subsidising our rent payments and the best thing is they probably can't afford not to!

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House prices are not included in the CPI figures. OER is though (Owner Equivalent rent). In other words the government works out the average price that an owner would rent their house for. That's why HPI has not influenced the CPI. I would not put it past the government to suddenly change it to true house prices now that they are falling.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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