UK households boosted by falling inflation rates

By Marianne Straker, Wed 18 Jan 2012 - Published in Home Insurance

Falling inflation rates could signal an improved confidence for UK households as property prices are set to decrease.

The Bank of England announced that the rate of inflation fell to 4.2 per cent from 4.8 per cent in November and analysts at Moneysupermarket.com believe this is good news for UK property investors.

In 2011, many were battling against the rising costs of properties with many first-time buyers unable to get their foot on the housing ladder.
However, the insurer revealed that the main strain on consumer finances was the high petrol prices with 42 per cent of people surveyed highlighting this as their main concern.

Kevin Mountford, head of banking, at Moneysupermarket.com, said: "The rising cost of living has had a major impact on UK household budgets for the last 12 months and signs that this is beginning to reduce is very welcome indeed. However, despite inflation falling month on month, prices are still high."

A recent survey by housing company Rightmove showed that despite mortgage rates being the lowest in 14 years only a fraction of houses have come on the market since the turn of the year.

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