Consumer price inflation rate of 2.2% “does not give a complete picture of market sentiment”

The stabilisation of the Consumer Price Index (CPI) inflation rate at 2.2 per cent does not reflect the full picture of the costs faced by homeowners and market sentiment, warned GetAgent, pointing out that the inflation rate which includes cost of ownership (CPIH) is higher at 3.1 per cent.

The CPIH inflation rate has been largely declining since peaking at 9.6% in October 2022. However, when it reached that peak, it was still 1.5% below the overall CPI inflation rate of 11.1%, GetAgent found.

The number remained at a lower level until September 2023, but since October 2023 the CPIH homeowners inflation index has been above the CPI index.

In fact, this gap has widened since then, and while the CPIH inflation rate settled at 3.1% in July, the gap between it and the CPI rate is now 0.9%. This means that the gap between the CPIH inflation rate and the CPI rate is the largest recorded since 2014, GetAgent pointed out.

The gradual decline in the consumer price index rate and the Bank of England's cut in the base rate have contributed to an improvement in market sentiment and a sense of greater opportunity.

However, these CPIH figures show that some buyers and sellers may still be hesitant about their overall financial situation, the comparison site said.

In the future, sellers will have to rely even more on a trusted real estate agent to help them navigate this environment and make sensible decisions about the price they want to achieve, the budget they have available or even the speed with which they can complete their sale or purchase, the website continues.

Colby Short, co-founder and CEO of GetAgent, commented: “While it is encouraging that inflation is easing, homeowners are still under significant financial pressure, particularly when it comes to the costs associated with owning and maintaining their homes. These differences in inflation rates mean that now more than ever, sellers need advice they can trust.

“We are seeing agents going above and beyond the call of duty to support sellers during these difficult times. They are offering expertise and advice on minimizing costs, navigating the changing market and tailoring transactions to meet sellers' preferred timelines and individual needs.”