House price confidence wanes

In January, the Nationwide Building Society’s Consumer Confidence Index fell four points to 81, the lowest level since the survey began.

Looking specifically at house price growth, consumer expectation fell last month, with respondents predicting a 0.2% decrease in house prices over the next six months, whereas the December index recorded expectations of a 0.7% rise during the first-half of 2008.

The building society points out that this decrease is only to be expected and would reflect widespread reports of a slowdown in the housing market.

The survey’s data covering sentiment about the economic and employment situation in six months’ time fell four points from 83 to 79.

The number of respondents who were positive about the employment situation in six months’ time fell almost 10% against December’s figure, to 36%.

The number of people expecting the economic situation to be worse in six months’ time increased from 42% in December to 44% in January.

While the Present Situation Index fell five points to 83, consumers’ willingness to spend remained steady at 68. However this compares with 90 in January of 2007.

Nationwide points out that continued stock market volatility and a weaker exchange rate are likely to be weighing on consumers who are already feeling the impact of higher food and fuel prices.

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