What’s a slice of bread got to do with house prices?
THE cost of a typical 800g Hovis loaf at Tesco rose by 8p this week to more than £1. This news snippet from the supermarket aisle may not have been thoroughly digested by everyone interested in the outlook for property, but it is relevant nevertheless. Household finances are under pressure not only from upward moves in interest rates but also from bigger supermarket bills – yet another factor that will put a brake on the market in coming months, according to the Halifax. Record wheat prices, driven by poor harvests, a dietary revolution in China and demand from biofuel producers, are making a slice of Hovis and a chunk of ciabatta more expensive. The low carb crowd may now be saying, “So what?” But other foodstuffs, including dairy products, are also getting dearer. Meanwhile affordability is deteriorating, with homeowners spending a greater proportion of their salaries on mortgage payments than at any time since 1990. The Royal Institution of Chartered Surveyors (RICS) says that, in L
