Unexpected Inflation Rise: How Does it Impact Me?

Unexpected Inflation Rise

In February 2025, inflation unexpectedly rose to 3%, exceeding forecasts and putting additional pressure on household finances. With inflation still running above the Bank of England’s 2% target, homeowners and landlords looking to buy or sell need to understand how this shift could impact the housing market.

Homeowners Looking to Buy or Sell

With higher inflation typically resulting in higher interest rates, mortgage repayments have become more expensive, reducing buyer affordability and cooling demand in some areas. As a result, many buyers are shifting towards smaller, more affordable homes in lower-cost regions, altering the housing market landscape.

What This Means for Landlords

High inflation has contributed to high finance costs for landlords, particularly those on variable or expiring fixed-rate mortgages. Many landlords have responded by increasing rents, taking advantage of high demand and a limited supply of rental properties.

However, in some council areas in England and Wales, rents remain more affordable, averaging less than 30% of household income. While increasing rents may offset higher costs for landlords, pushing them too high could lead to tenant affordability issues, increasing the risk of vacancies or missed payments. Remortgaging strategically or adjusting investment plans will be key to managing financial pressures.

Planning Ahead

Whether you’re a landlord facing rising costs or a homeowner considering buying or selling, now is the time to review your financial strategy. Exploring mortgage options, planning for potential rate changes, and staying informed about market trends can help you make smarter decisions.

Get in contact today to discuss your options. Teddy James Mortgage Solutions are and Eastbourne based mortgage advisors offering friendly, honest, fee free mortgage advice. Contact Teddy James Mortgage Solutions today.