Data released this week has shown that productivity in the UK economy is the lowest in the entire G7. The wave of strikes that took place throughout the fourth quarter of 2022 and are ongoing will do nothing to improve that statistic.

One of the most important sectors of the private sector of the economy is housing. House building as well as sales of existing property makes up around 7% of GDP. The sector is also an accurate barometer of the health of the economy.

Over the past ten years or so, existing house prices have seen an unprecedented period of steady growth as inflation has remained low along with interest rates. Mortgage providers were able to offer very generous deals, and the vast majority of home loans were of fixed terms for extended periods.

Suddenly, following Brexit and the Pandemic, the picture has changed. Virtually an entire generation has had to come to terms with turmoil in the market. As their fixed rate deals expire, suddenly the Building Societies and other lenders have withdrawn the majority of the products they were offering, leaving them borrowers high and dry having to pay significantly higher floating higher rates.

This has had the effect of deterring existing borrowers from deterred from moving, while first time buyers have suddenly seen lenders demanding larger deposits and other less favourable terms.

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