Consumers less confident about house prices

Consumer confidence in the property market dropped another four per cent in September.

12:36 06 October 2004

Recent jitters in the housing market have continued to put a damping effect on consumers' confidence, which dropped another four per cent in September, according to the Woolwich.

The figures represent a fourth consecutive month that confidence in the housing market has fallen.

The Woolwich consumer confidence index shows that just over half (52 per cent) of homeowners believe their property will continue to increase in value compared to 56 per cent in August and 62 per cent in July.

Confidence is down 15 per cent from a high of 67 per cent in May this year, a change which follows three base rate increases.

Andy Gray, head of mortgages at Barclays and the Woolwich, said: "This month sees confidence at its lowest level for 16 months.

"The fall in confidence is largely due to rising interest rates and speculation surrounding the sustainability of house price inflation.

"We expect confidence to continue to soften as interest rates are predicted to rise once more next month and believe house price inflation will slow further by the end of 2005."