Average house prices for England and Wales, positive for 2018

12 December, 2017

Matthew Crisp

Monday from the UK started and pretty must finished off with the Rightmove Property Price Index which provides a sample of residential property prices in the UK. It recorded a -2.6% drop in December, down further from November’s sub-par reading of -0.8%. Could this be a sign of the immediate impact of the bank of England’s first interest rate hike in a over decade? Maybe not, as Rightmove, one of the UK’s leading property based websites also predicted a 1% rise in average house prices for England and Wales over 2018, somewhat weighed down by expected price drops in London, home to some of the Uk’s most expensive real estate.

Pre-weekend gains, lost by lunchtime

Sterling sadly lost all of its pre-weekend gains by lunchtime Monday having ridden up to fresh 6 month highs against the Euro and little under one cent off 15 months highs against the U.S Dollar after the Uk governments announcement it had made significant advances in the Brexit negotiations where it clarified the much debated residential rights situation for existing Uk based EU nationals, the Northern Ireland border and agreed its divorce bill settlement where Theresa May agreed a figure in the region of €39bn. Sadly, to dilute this much needed Sterling positive news, reports soon after suggest the E.U is not prepared to enter into the much needed trade negotiations until February 2018, leaving the UK little time to negotiate a deal before it officially leaves the E.U 12 months later.

Today’s heavyweight data releases will be eyed closely

Today, however certainly makes up for this week’s rather uneventful start with the release of some more serious, heavy weight data releases from the Uk, the U.S and the E.U. The index of index’s from the UK begins with the Retail and Producer Price Indexes expected to show minimal but positive increases from October with the Retail Price Index rising to 0.3% from 0.1% and the Producer Price Index rising from 0.2% to 0.3%. Certainly, the more influential of the 2, the producer price Index is a measurement of the monthly prices of goods produced by UK manufacturers and represents a massive 45% of all of the UK’s exports overseas.

The Index trilogy is finally completed by the far more substantially anticipated December and annual Consumer Price Index readings. This significant central bank influencer will give investors a better glimpse into the spending habits of the British public who are themselves influenced by recent policy committee changes within the bank of England, which is expected to be felt in pockets across the high street in the hope of curbing the steady rise in inflation which is seen as a negative if left to rise too far above the near 6 year high reading of 3% back in October, although Mark Carney doesn’t feel it’s ready to settle down just yet.

The best of the rest

Roughly 1,000 miles to London’s east, Berlin will announce Germany’s ZEW Survey results which are expected to show a marginally negative decline from 88.8 to 88.5. Interestingly, this report is only published in German, but the obvious decline from November’s reading numerically speaks volumes, as a decline is generally considered bearish for the Euro.

Finishing off the trio of economic powerhouse’s data releases for Tuesday sees the U.S announce its own Producer Price Index readings where a monthly decline from October is expected at 0.3% from 0.4% in November but a slight year on year rise from 2.8% to 2.9%.

With Sterling now sitting just 1% off 15-month highs against the U.S Dollar and 6 month highs against the Euro, now could be one of the best opportunities for those requiring any medium term payments. Buying a home at these levels beats a large proportion of what has been on offer for some months.