Property industry figures have described the latest inflation figures as “disappointing”, as the latest Consumer Prices Index (CPI) increased to 3.4% in the year to December; up from 3.2% in November.
The Office for National Statistics (ONS) said alcohol, tobacco and transport made the largest upward contribution to the monthly change, which remains above the government’s target of 2% – raising fears the hoped for cuts to the Bank of England interest rates might be delayed.
Nick Hale, CEO of Movera, said:
“It’s disappointing to see inflation creeping up again, as falling mortgage rates and rising property availability have kicked 2026 off to a strong start. However, it was unlikely the Bank of England would cut the base rate again in February anyway, given the slow and steady approach the Monetary Policy Committee is taking. Another cut in March or April, if the conditions are right, is looking far more likely.
“In the meantime, the opportunity to pause and rethink could be just what the sector needs. Time to take stock before what is set to be a big year for remortgaging, with or without falling interest rates. For brokers and conveyancers alike, innovation will be the key to streamlining workloads and preparing for a high-volume year. Honing and refining processes, adopting digital solutions and thinking outside of the box will be the key to not only to generating greater efficiency and easing workload, but also improving the experience for customers.
January has seen high street lenders introduce more competitive mortgage rates which, alongside an increase in buyer demand and properties listed for sale, raised hopes for a strong start to the year. To see inflation creep back upwards again will “no doubt be disappointing for many consumers,” Propertymark CEO Nathan Emerson said. He added:
“With luck, this will prove to be a small blip in what has otherwise been a sustained downward trend over recent months. However, some lenders have already started to offer more competitive mortgage deals, which should help invigorate the housing market throughout the year, alongside the general improvement in mortgage availability that has recently been highlighted by the Bank of England.
“Should inflation continue to trend downward overall during the course of the year, we should start to see a more buoyant mortgage market, reflecting a greater degree of affordability not seen for some time. This would be very welcome news for anyone hoping to approach the buying and selling process.”
Ben Thompson, director of home moving strategy at the Mortgage Advice Bureau, said the figures demonstrated once again the property market is “ever-changing”. He explained:
“Inflation ticking up confirms what many have feared: the journey back to the 2% target is proving to be an uphill climb. While this isn’t necessarily a full reversal of the progress made over the last year, it’s a firm reminder that the road to recovery remains bumpy. Consequently, the Bank of England is likely to keep a steady grip on the tiller, potentially delaying any anticipated rate cuts until the data shows a clearer downward trend once more.
“For prospective buyers, this unexpected uptick forms part of the process. Lenders will continue to offer competitive deals, and while the ‘payment shock’ remains a reality for those remortgaging from historically low rates, the peak of market volatility has clearly been passed – it’s simply that the gap isn’t closing as quickly as we’d hoped.
In a nod to the recently closed government consultations on home buying and selling, and up front information, Movera’s Hale concluded:
“Whether interest rates are favourable or not, taking the pain out of the home moving process removes at least one barrier to market for buyers and sellers, which would ultimately improve the outlook for the entire sector.”
