Consumers unperturbed by house price fall

Fears that a fall in house prices would affect consumer confidence and consequently High Street spending, have been allayed by a BBC survey.

Of the 1,000 people questioned 88% reported that a fall in house prices of 10% or more would have no impact of their day to day spending.

Four-fifths of those interviewed said that they would also continue to borrow money for large purchases, such as cars, holidays or home improvements.

The results of the survey challenge the widely held view that a drop in house prices could cause a downturn in the UK economy.

The survey has been completed for The Truth About Property, a BBC Two series on the UK housing market that focuses particularly on widespread beliefs about property prices and their impact on personal finance.

The findings raise doubts about the validity of concerns that a fall in house prices could plunge the economy into recession.

The programme also questions whether the Government can achieve its aim of enabling 240,000 homes to be built each year.

In Basingstoke, for example, developments have been approved and thousands of houses are being built.

However, progress is being slowed by local opposition and legal challenges to planning and development decisions.

It is also pointed out that even if 240,000 new homes were built each year, affordability would remain an issue because the new homes would form only a small part of the country’s housing stock.

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