At the beginning of November, the Bank of England’s Monetary
Policy Committee voted by eight to one to maintain interest rates at 0.5 per
cent. The Bank also signalled that a hike in interest rates has now slipped
back until at least the latter months of 2016. At the same time, the Bank
produced its quarterly inflation report in which its inflation and growth
forecasts were cut.
In the wake of that, The Office for National Statistics (ONS)
reported that the UK’s inflation, as measured by the Consumer Prices Index,
remained at minus 0.1 per cent in October, which marks the first time that it
has fallen on an annual basis for two months in a row since it was created in
1997. The Retail Prices Index, which includes housing costs, fell to 0.7 per
cent from 0.8 per cent in September and is the lowest RPI rate since November
At the end of the month, the ONS confirmed that the UK
economy grew by 0.5 per cent between July and September. Although this was a
drop from the 0.7 per cent increase experienced in the preceding quarter, it
still marked the eleventh consecutive quarter of growth. The slowdown is
largely blamed on a widening trade gap and a contraction in construction output
of 2.2 per cent.
November closed with The Chancellor’s Autumn Statement,
which announced that buy-to-let landlords and people buying second homes will
have to pay a 3 per cent surcharge on each stamp duty band from April 2016. The
Statement also included an extended Help to Buy scheme in London, which will
see buyers who can find a five per cent deposit given a loan worth up to 40 per
cent of the property; elsewhere the existing maximum loan is for 20 per cent of
the property’s value.
The Statement also reported that the Government is putting £6.9
billion into housing, which includes an extra £2.3 billion in loans for the Government
Starter Homes programme and £4 billion lent to housing associations and local
authorities to build more homes for shared ownership. The Government also
announced a pilot scheme to trial the Government’s Right-to-Buy programme for
housing association tenants.