British workers have seen their first real pay rise in a year, as average wage growth overcomes the fading inflationary effects of the Brexit vote. Bringing to an end 12 months of falling living standards, the latest snapshot of Britain’s job market from the ONS (Office of National Statistics) showed pay rising above inflation for the first time since January 2017.

 

The data suggests that wage growth is currently outpacing inflation, at 3.2% compared to 1.3%. In the three months to December 2019, the UK’s average weekly pay reached £512 (excluding bonuses). This is the highest level since March 2008, before the global economic crisis.

 

Inflation rose to 1.8% in January 2020, mainly due to the higher cost of fuel, and the growth in house prices, among other factors. This is, however, still below the Bank of England’s 2% target and below current wage growth. The latest inflation figure means it is likely the Bank of England interest rates will be kept at 0.75%, making mortgages more affordable.

 

 

 

 

Inflation has been falling in recent months, with the consumer price index dipping to 2.7% in February, as the impact of the fall in the value of the pound straight after the EU referendum begins to fade.

 

 

In addition the unemployment rate unexpectedly fell to its lowest level since 1975 in the three months to February. The number of people in work also reached a record high of 32.2 million as 55,000 more people started a job, giving an employment rate of 75.4%. The number of job vacancies remained close to the record high reached in December, hovering at 815,000.

 

So why is this good news for Landlords? Well, since potential tenants will have relatively higher wages, they will be more likely to pass affordability tests and maintain their payments for properties with higher rents. As rents have risen due to the recent tenant fee ban, this is beneficial for both tenants and landlords.

 

If you are considering letting a property and would like some advice do not hesitate to contact us 01227 767200 or pop into the our office in Castle Street for a chat.

 

Regal Estates