The Penny That Finally Stopped Shrinking, May 2026 Inflation & Affordability Update
Think back to this time last year. Remember that feeling at the supermarket checkout where the total on the screen seemed to jump up every single week, even though your trolley looked exactly the same? It felt like your money was catching a cold—getting weaker and weaker while the price of bread, milk, and petrol grew giant beanstalks.
That "shrinking money" feeling is what people call inflation. This May, the official number for it stands at 3.4%. To put that in plain English: for every £100 you spent on your normal shopping last year, you now need £103.40 to buy the exact same things. It’s a bit like a race where the finish line (the price of things) keeps moving further away just as you’re about to reach it.
But here is the most surprising bit of news this month: for the first time in a long while, we are actually starting to run faster than that finish line.
Did you know that while the cost of things went up by 3.4%, the average person’s pay packet grew by 3.6%? It sounds like a tiny difference—just 0.2%—but it is a huge deal. It means that after a long time of feeling squeezed, our "spending power" is finally growing again. Your money is starting to regain its muscles. We call this a positive Affordability Signal. It’s the moment where the extra pennies in your pay packet finally outweigh the extra pennies the shops are asking for.
So, what does this mean if you’re looking at those "For Sale" signs on your walk through the neighbourhood?
Well, the big bank that sets the rules for borrowing—the Bank of England—has kept its main interest rate at 3.75%. This is the number that helps decide how much it costs to get a loan for a house. Because this rate hasn’t moved and people’s wages are finally growing faster than shop prices, the dream of moving home is starting to feel much more "doable" for many families.
Across the whole country, house prices have stayed very steady. In fact, the average price of a home actually dipped slightly from last month—going from £285,111 in April to £284,720 today. When you combine prices staying still with wages going up, it’s like the see-saw is finally tilting back in favour of the buyer.
Now, you might wonder how these big national numbers affect us here in CM11 1. While the national average house price is under £300,000, things look a bit different on our doorstep. In CM11 1, the average price people have actually paid over the last year is £673,325.
Because we live in such a desirable area, the national "squeeze" on living costs hits us in a specific way. When petrol and food prices go up, buyers in CM11 1 become a bit more cautious. They take longer to make decisions. Currently, it’s taking about 254 days for a home to find its new owner here. However, because people’s wages are now growing faster than inflation, we expect that "cautious" feeling to start fading away. It means more neighbours can afford to stay in the area they love, and landlords don't feel quite as much pressure to hike up rents.
The world of money can feel like a confusing storm, but the clouds are definitely parting. We are moving into a season where your hard-earned money goes just that little bit further. Whether you’re staying put or thinking about a fresh start, the ground beneath your feet is feeling a lot firmer this May.