Britain | Safe as houses

Britain is well-placed to cope with a downturn in the housing market

But it will still hurt, particularly for recent first-time buyers

LONDON, UNITED KINGDOM - NOVEMBER 03: A 'Sold' estate agent board sign erected outside a property in London, United Kingdom on November 3, 2022. Over 1.5 million mortgage borrowers with home loans linked to the base rate face further increases as the Bank of England raised its base interest rate by the biggest increase in more than thirty years. The Bank of England on Thursday raised interest rates by 75 basis points to 3%, marking its largest hike since 1989 and bringing borrowing costs to their highest level since late-2008. The increase from 2.25% came after a majority 7-2 vote at the monetary policy committee of the bank, whose latest projections indicated "a very challenging outlook for the UK economy."Rising back to a 40-year high, inflation hit 10.1% in September and is expected to pick up to around 11% in the fourth quarter of the year, well above the bank's 2% target. The central bank also said further hikes may be needed for a sustainable return to the inflation target. The pound went down following the Bank of England's interest rate announcement and warning of recession, with the currency dropping 1.4% to 1.123 against the greenback and 0.9% lower versus the euro at 1.16. (Photo by Dinendra Haria/Anadolu Agency via Getty Images)
For less than it cost last yearImage: Getty Images

Tanya McWaters, a 30-year-old television production manager, and her husband may have managed to buy right at the peak of the housing market. Like others their age the couple used their savings, as well as a little money from her parents—and, in their case, emptying his Australian pension pot—to cobble together the money for a deposit. They moved from a rented flat in London into a house in Bicester, near Oxford, last April. “I love it,” she says. “[The mortgage bill] was the same as our rent for the one-bed in London.”

This article appeared in the Britain section of the print edition under the headline “Pain and relief”

Britain January 21st 2023

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