Property industry reaction to the latest ONS Consumer Price Inflation index is subdued, but would-be homebuyers are being urged not to lose hope.
The Consumer Price Index rose by 3.5% in the 12 months to April 2025, up from 2.6% in the 12 months to March. Owner occupiers’ housing costs (CPIH) rose by 4.1% in the 12 months to April 2025, from 3.4% in the 12 months to March. On a monthly basis, CPIH rose by 1.2% in April 2025, compared with a rise of 0.5% in April 2024.
‘Encountering this particular bump in the road was widely expected and forecasted’, said Ben Thompson, deputy CEO of the Mortgage Advice Bureau. ‘However, inflation rising to 3.5% shouldn’t discourage homebuyers from taking their first, or next, step on the property ladder, especially with summer proving the most popular time to move’.
He added:
“With more innovation across the market than ever before, including a host of sub-4% rates, there’s never been a better time to buy. Speaking to a broker is essential, as with their market insight and expertise, you may actually end up being mortgage ready sooner than you think.”
Nick Hale, CEO at Movera, said the rise in inflation serves as ‘a stark reminder that the path to economic stability is rarely linear’. He commented:
” A cut to the base rate has always been a tug of war between stimulating growth and keeping inflation in check – and right now, that balance feels even more precarious. Some of the uptick may well be down to the March stamp duty deadline – the first real implementation of Labour’s Budget last autumn. As expected, it prompted a flurry of activity in the housing market, driving short-term demand not just for property, but for the many services and goods tied to moving home. That momentum can temporarily feed through to inflation, even if it’s unlikely to persist.
“For borrowers, this will do little to ease concerns around affordability.”
However, while Propertymark CEO Nathan Emerson acknowledged that many would be disappointed by the news, he believes housing market momentum is likely continue throughout the summer.
He explained:
“Housing plays a central role in boosting overall growth in the UK, and with the summer months being historically busy for the housing market, it’s likely that momentum will continue throughout this period, despite the economic turbulence across the first quarter of 2025.
“Inflation increasing may deter the Bank of England from dropping interest rates on 19 June; however, when the time is right, we hope to see them fall and more competitive mortgage deals appear across the lending spectrum.”
