Britons pessimistic about future property values amid expectations of house price correction
Britain was not spared the pandemic housing boom, but the outlook for prices is now more pessimistic. Photo: Bloomberg LP
British consumer confidence has slipped into negative territory for the first time since the pandemic lockdown in mid-2020, and homeowners are increasingly concerned that their property values may be at risk, Bloomberg reports.
YouGov said its sentiment gauge fell 4.2 points to 98.8 in August. The pessimism is fueled by expectations about the direction house prices will take, job security and the outlook for personal finances.
The poll, which was carried out before Prime Minister Liz Truss announced measures to protect households from rising energy prices, reflected a deterioration in living standards. Inflation is near a 40-year high and is pushing up the cost of goods and services of all kinds.
“The new prime minister is facing unusually gloomy public attitudes, particularly around personal finance,” said Emma McInnes, global head of financial services at market research company YouGov.
Asked about their financial situation in the coming year, households were the most pessimistic at any time since statistics began. The outlook for home prices also fell sharply. Consumers “are more likely to view housing prices negatively in the short term,” the report said.
Mortgage rates are rising at their fastest pace since 2016 after the Bank of England raised its benchmark interest rate six times since December to tame inflation. Investors expect the rate to rise to 4.5% next year from 1.75% now, with a half-point hike almost certain next week.
“Consumers are more pessimistic about the future value of their home as rising mortgage rates are expected to cause a price correction in the housing market,” said Kay Neufeld, head of forecasting at the Center for Economic and Business Research, who contributed for the survey.