Consumer confidence on the up
CONSUMER confidence in the housing market, the security of their jobs and the economy in general is on the rise.
New research has found that the pessimism which dominated the pre-Christmas period has largely dissipated as property prices have not slipped to the degree that people expected.
The Nationwide Confidence Report found that the number of people expecting the economy to improve in the next six months was up seven percentage points, while the percentage of those positive about the jobs market was up three points, as was that of people expecting their household income to rise.
In addition, current spending confidence has risen. The proportion stating that it is currently a good time to make a major purchase such as a house or car was up 10 percentage points.
The figures makes it increasingly unlikely that the Bank of England will lower interest rates in the near future. Post Christmas retail figures had suggested that consumer spending had been curbed, but the confidence report confirms there is still room for growth.
Nationwide executive director Stuary Bernau said: 'In the past two months, overall confidence in the housing market has improved with less people feeling pessimistic.
'We have consistently believed that the housing market would experience a soft landing and these figures indicate that this view is supported by consumers.'
Seven months ago two-thirds of people expected house prices to rise over the following six months and only one in fourteen expected a fall.
Subsequently, confidence fell sharply from June to November, with the proportion expecting rises halving and the share expecting falls trebling. House price confidence reached a low of 10% in November.
However, following six months of broadly stable house prices and with the possibility that interest rates have peaked, sentiment appears to have bottomed out, the building society said.
