Here are this week’s highlights in the UK economy.
Brits’ Christmas dinner to be the priciest in 10 years. Mintec Ltd’s Christmas dinner index for 2022 revealed that the prices for a typical holiday meal that consists of turkey, pork and vegetables have gone up by 22% from the previous year. A vegan meal is also more expensive, which is up by almost 14% year over year.
UK house prices fell 1.4% in November. According to the Nationwide Building Society, this is the sharpest rate of decline since the start of the pandemic after higher mortgage costs have contributed to the slump in demand.
Housing demand dropped 44% since the mini-Budget. Property portal Zoopla noted the sharpest falls in property demand in Southeast England and the West Midlands. The group attributes the decline to higher borrowing rates, which caused deals to fall through.
Global inflation may have already peaked. Moody’s Analytics believes that inflation has already reached its apex as price pressures are already easing along with supply chain issues. Global inflation hit 12.1% in October, but the high energy costs could raise UK headline inflation futher in the coming year.
John Lewis Partnership to build 1,000 new homes in and around London. Together with investment firm Abrdn, the £500 million project will convert its stores and a possible warehouse into one- to three-bedroom apartments in Bromley and West Ealing. The expected completion is in 2027 should planning permission be granted. In the next decade, the company plans to build 10,000 new homes.
The recent increase in retail activity in the country was substantial as can be seen in the uptick of credit and debit card purchases in November, thanks to Black Friday and Cyber Monday sales, and this is expected to continue heading into Christmas. But as the cost-of-living crisis still persists, the economy won’t be seeing any long-term rebound in footfall in shopping centres anytime soon. As such, converting abandoned malls or big-box retail shops that have very low traffic can turn the housing crisis into a profitable opportunity.
The drop in rental accommodation vacancies has spurred the rise of commercial buildings being repurposed into residential units. These conversions saw growth upon the passing of the revised Permitted Development Rights (PDR) last year. But the current rate of new apartment deliveries and BTL completions still falls behind the number of renters, driven by students and those who prefer the convenience of living near London.
But the problem, however, is that most conversions are located in prime areas, making them less affordable for low-income households. So, we go back to the main problem: it’s not just supply that’s taking a toll on home ownership, but the lack of affordable homes instead.
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