What is the UK Inflation Rate?

Inflation simply put, is the increase in the price of something over time. The Office for National Statistics (ONS) tracks the prices of hundreds of everyday items and these items are updated to reflect shopping trends.

Inflation includes the price of energy, food, alcohol, and tobacco. Unfortunately, inflation has risen due to:

  • Sky-high food and energy bills
  • Oil and gas were in greater demand once a ‘normal way of living’ resumed post-Covid
  • There was a reduced amount of grain available which pushed up global food prices

How does raising interest rates help to tackle inflation?

As we have seen recently, the Bank of England has continually increased interest rates, this has been done in a bid to help slow down inflation. This is a traditional response to rising inflation. By making borrowing money more expensive, this in turn makes monthly mortgage payments more (as well as some saving rates increase). When people have less money to spend, they will therefore spend less in purchases, reducing the demand for goods and slowing price rises.

When will inflation go back down?

Just because inflation goes down, doesn’t mean prices will fall – it just means they won’t rise as fast. The Office for Budget Responsibility (OBR), which assesses the government’s economic plans, previously predicted inflation would fall back to 2.9% by the end of 2023

Rising cost of food prices

Food inflation has come down slightly, although still remains high at 18.3%. Below is a table showing the increase of regularly purchased food items:

Food itemPrice increase (%)
Olive oil46.9
Fresh fish21.4
Ice cream20.8
Whole milk20.5
Fresh fruit11.3

We are aware that with the increase in interest rates, there are several people out there who are worried about what to do next, which is where our expert team can come in. Our friendly team of professionals are on hand to answer any of your concerns, so please do not hesitate to get in touch: 01245 218018 or team@blueqmortgage.com.

You can also check out our ‘Tips for Saving during the Cost-of-Living Crisis’ article to see if there’s a small change you can make.

How Will The Proposed EPC Changes Impact Landlords?

Back in April 2018, the MEES regulations came into force and any property in the UK private rental sector now requires a minimum rating of Band E on an Energy Performance Certificate. It became unlawful for landlords to rent properties that didn’t have a minimum Band E rating unless there is an applicable exemption. Currently, a new bill is making its way through parliament to update these energy performance requirements.

If you’re a landlord and you’re unaware of the proposed upcoming legislative changes or you’re interested in buying a buy-to-let property and you’d like to find out more, below we have looked into how this new bill could impact the UK rental market. 

What is an Energy Performance Certificate?

Simply put, an Energy Performance Certificate, commonly referred to as an EPC, summarises the energy efficiency of a building and each certificate is valid for 10 years. 

An EPC contains information about the energy consumption of a property and provides cost-effective recommendations about how to improve energy efficiency. It also gives a property an overall energy efficiency rating too and EPC ratings vary from Band A, being the most efficient, to Band G, being the least efficient. 

What are the proposed changes?

More pressure is being placed on people to improve their energy efficiency. The government is implementing various policies and proposals to decarbonise all sectors of the UK economy in an attempt to meet its net zero target by 2050. 

The bill making its way through parliament proposes that all rental properties will need to have a minimum EPC rating of a Band C. It is proposed that this update to the existing MEES regulations will come into effect from the end of December 2025 for new tenancies and the end of December 2028 for existing tenancies. 

What should landlords be doing now?

Although this bill hasn’t yet been passed by parliament, it is predicted that the government will be keen to implement this new legislation to improve the energy efficiency of properties. Should this change to regulations come into effect, landlords will be solely responsible for ensuring their rental properties have an EPC rating of Band C or above, unless they meet the criteria for an exemption, and many are already starting to make changes to their rental properties. 

Ultimately, landlords will be unable to begin new tenancies from 2025 unless they make energy-efficient improvements to their rental properties and increase their EPC rating. This is concerning for both landlords and tenants, and there is a risk that a lot of properties will become ‘unrentable’ in the next few years if required changes are unaffordable. There will likely be an increase in landlords applying for bridging finance to help them cover the cost of any renovations required to make their property more energy-efficient. 

It is advised that all landlords start looking at the recommendations about how to reduce energy use on their current Energy Performance Certificate. They can then start to implement some of the most straightforward and cost-effective improvements to their rental property, helping to ensure it will be rated Band C or above in 2025. 

Getting some tailored mortgage advice 

Whether you’d like to find out more about bridging finance or buy-to-let mortgages, feel free to contact our mortgage consultants at Blue Q. We have a brilliant team of mortgage advisors in the Twickenham area that can provide you with tailored advice on all aspects of the mortgage market. We assist everyone from first-time buyers to landlords with huge portfolios of properties and we pride ourselves on providing honest and sound advice, helping borrowers find the best mortgage deals. We can make the whole mortgage process much less stressful and we are here to help in any way we can. 

Feel free to explore our website today to find out more about the mortgage products we can assist you with and don’t hesitate to book an appointment with a member of our team to discuss your mortgage requirements in more detail. 

green deal

Government’s New Green Homes Grant

The government’s new Green Homes Grant is part of the Government’s £3 Billion ‘Green Investment’ package which was announced by Rishi Sunak in the 2020 summer statement. The £3 Billion investment is aimed at improving energy efficiency and also to help stimulate the economy post-Covid19 lockdown.

The government initiative will start in September 2020 and will allow homeowners to apply online to receive help from the government in the form of vouchers to pay for as much as ⅔ of the expenditure incurred for work such as double glazing, insulation, the installation of heating systems, draft proofing and the installation of renewable energy.

Vouchers will be available for up to £5,000, with the poorest homes sometimes eligible for vouchers of up to £10,000.

In order to qualify for this help you must first request an assessment from a Green Deal Assessor.

The assessor will consider the following when making his/her assessment;

  • Whether you own or rent the property
  • your home is a listed building, in a conservation area, built before 1900 or constructed in a non-traditional way
  • there are access issues, such as access to your loft
  • you can provide bills showing your recent energy use
  • When the assessor visits

You may be asked:

  • how many people live in your home
  • what type of heating and appliances you use
  • how often you use your heating
  • what energy-saving measures are already installed
  • After the visit

You’ll get a document, called a Green Deal advice report, that contains:

  • an Energy Performance Certificate (EPC) that rates your home for energy efficiency
  • an occupancy assessment that measures how much energy you and other occupiers are using
    improvements your assessor recommends
  • an estimate of the money you could save on your annual energy bills
  • a statement on whether the improvements will pay for themselves through reduced energy costs

A Green Deal advice report is valid for 10 years, or until you make changes or energy saving improvements to the property, for example you build an extension or change the windows.

uk chancellor Rishi Sunak

Stamp Duty Holiday – Stamp Duty Scrapped On Houses Under £500,000

The chancellor has announced a temporary holiday on stamp duty up to £500,000 as part of a number of measures to help stimulate the economy. We have listed below the key facts following this announcement.

Prior to the announcement In England and Northern Ireland stamp duty was paid on land or property sold for £125,000 or more. First-time buyers paid no tax up to £300,000 and 5% on any portion between £300,000 and £500,000. For people who have bought a home before, stamp duty rates are 2% on £125,001-£250,000, 5% on £250,001-£925,000, 10% on £925,001-£1.5m, and 12% on any value above £1.5m. Following the decision no stamp duty will be paid on purchases up to £500,000

Prior to the chancellors decision someone purchasing a property at £495,000 would pay £14,750 in stamp duty, a first time buyer would pay £9,750. Assuming completion takes place before the 31st of March 2021 the stamp duty is now zero.

People buying second homes and buy-to-let properties will also benefit, but will still have to pay the 3% extra duty due on the entire price.

The holiday applies from the 8th of  July, which unfortunately means if you completed on your property purchase yesterday or before you will have to pay the full usual stamp duty.

For homes costing more than £500,000, buyers will pay 0 % on the first £500,000, five per cent between £500,001 and  £925,000 and 10 per cent between £925,001and £1.5 million. This increases to 12 per cent for homes costing more than £1.5 million.

With 81% of all residential property stock for sale in England priced under £500,000 this could be a real boost the housing market, although with lenders still reluctant to release 90 and 95 percent products many first time buyers may not be able to take advantage of this offer. Fortunately there are some excellent schemes available to help buyers purchase their first home and your friendly Blue Q Mortgage Adviser will be happy to discuss these with you.