Fears over UK house prices continued to rise in February, with British consumers’ confidence that the value of housing will rise slumping to among its lowest levels since the result of the Brexit referendum was announced.

 

A survey of around 7,000 Britons over the course of February by pollsters Yougov and the Centre for Economics and Business Research (CEBR) showed an index of house value expectations falling to its second lowest since July 2016.

 

While the reading of 131.4 points remains significantly above the 100 mark which indicated overall negative sentiment, in the medium term it represents a serious decline in confidence in the housing market. Aside from the Brexit vote aftermath, February’s reading is the lowest since June 2013.

 

Nina Skero, CEBR head of macroeconomics, pointed out that declining confidence in the value of housing is often a precursor to falling consumer spending. The so-called wealth effect usually means rising house prices make consumers feel more able to spend, even if there is no change to their actual income.

 

Skero said: “Particularly concerning is the drop in house value expectations as this measure is an important bellwether for consumer spending. The persistent squeeze on real incomes has already created concerns for consumer-facing sectors and faltering housing market expectations only compound these worries.”

 

 

Read the full article here.