British consumer confidence continues to be affected by a number of factors such as accelerated inflation, slower wage growth and the uncertainty of Brexit continuing to affect the economy. The results have lead to with falling home prices and weak spending.
The Nationwide Building Society said the value of homes fell for the second consecutive month in March and the Bank of England reported a larger decline in mortgage loan approvals. Detailed statistics for the end of 2017 explained why families are under pressure, with real disposable income falling for the first time in almost a year.
House Prices Affected By Instability
House prices were reversed in May due to the instability of the economy, the burden on domestic budgets and the outlook of an increase in interest rates on the market.
Robert Gardner, chief economist at Nationwide, said: “There are few signs of imminent changes: inspectors continue to report moderate levels of new requests for information from the buyer, while the offer of real estate on the market remains more than stream. It is likely that undervalued economic activity and current pressure on household budgets will continue to have a modest effect on real estate activity and housing price growth this year.”
“Looking ahead, a lot will depend on how the broader economic conditions will evolve, especially in the labor market, but also with respect to interest rates.” Moderate economic activity and continued pressures on domestic budgets are likely to continue to have a modest effect on real estate activity and housing price growth this year, even though financing costs are likely to be lower to be low.”
Data from the Nationwide Building Society show that prices have fallen by 0.2% month on month, the third in four months. On an annual basis, price growth fell to 2.4% from 2.6% in April. Nationwide figures echo with official data indicating a slowing market, led by London. Recent data from the Office of National Statistics (ONS) show that UK house prices fell in March, with the capital having the weakest performance since 2009. This uncertainty is reflected in the attitude of small businesses who are still leaning towards ‘remain’ as the uncertainty that has been cast by the result of the vote continues dog the confidence of both consumers and investors.
The statistical agency said the decline in London could be linked to stamp duty reforms and the Brexit vote, which discouraged foreign buyers and saw net migration to the city. Howard Archer, EY Item’s chief economic advisor, said: “The real estate market is evidently struggling for stability and we believe any significant recovery will remain elusive in the coming months.
“Fundamentals for homebuyers will probably remain a challenge”. Consumers have suffered prolonged pressure on purchasing power, which is gradually easing. “Furthermore, the activity of the real estate market is still hindered by fairly delicate customer confidence and limited willingness to participate in major transactions”.
Author: Oliver Curtis
Hi there. I’m Oliver. I’m just a young boy from the outskirts of… Okay, that’s a lie, I’m not a young boy anymore, although I certainly feel that way at heart.