Five charts to start your day

The weird effects interest rates are having on the housing market

If you are in the UK, the first chart will interest you. If you are not, it is still interesting. It’s a rinse and repeat story.

For many homeowners, buy-to-let landlords and first-time buyers, this is a chart that might provide some relief. I also love how Bloomberg have kicked it off with a label referencing Liz Truss’ disastrous stint as Prime Minister last year. It’s slightly political, but appropriate.

1. Mortgage costs in the UK are gradually falling

Source: Bloomberg News

Ironically, I actually locked myself into a sub-four-percent mortgage in September 2022 – lucky me. But make no mistake, rising interest rates have had a profound impact on the property market. This includes my rented-out apartment in central London.

Buy-to-let landlords are starting to sell up as the cost of their buy-to-let mortgages rise, flooding the real estate market and causing prices to fall. But, this has led to a fall in rental property supply as well, which has seen rents shoot through the roof. The result? A surge in rental yields from the twin effects of falling house prices and rising rents. I’m not sure whether to be delighted or worried.

Furthermore, this seems to be a pattern repeating itself in other major cities around the world.

Coming up:

2. White Britons die at a higher rate than all other ethnic groups

3. Inflation slows in Germany

4. How long does it take to double your money?

5. The mega techs leave the rest of the S&P 500 behind

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