NEWS12 October 2022

Consumer confidence hit by housing worries

News Public Sector Trends UK

UK – Consumer confidence in the UK fell in September led by a drop in housing value metrics, according to the latest consumer confidence index from YouGov and the Centre for Economics and Business Research (Cebr).


The index found that consumer confidence fell by 1.1 points to an overall 97.7 in September compared with August, and significantly below the 110.5 score registered in September 2021.

House value metrics were the primary reason for the decline in consumer confidence, with a third successive month where homeowners’ views of their property’s value became more negative.

Perceptions of house value over the past 30 days fell 5.6 points from 130.4 to 124.8, which was the steepest fall since the first Covid-19 lockdown in April 2020.

The outlook for house valuations for the next 12 months was also negative, with a 4.5-point decline from 124.9 points to 120.4.

The changes in consumer confidence came around the government’s ‘mini budget’ on 23rd September, which saw increased anxiety over mortgage costs, interest rates and housing value.

The YouGov and Cebr figures are based on surveys of 6,000 consumers carried out throughout September 2022, with scores below 100 seen as broadly negative and above 100 as broadly positive.

The index said that perceptions of personal finances over the past 30 days also diminished in September compared with the previous month, showing a slight decline from 57.2 to 56.5.

However, perceptions of personal finances for the year ahead rose slightly from 41.8 to 43.1, which YouGov and Cebr speculated could be due to the announcement of an energy bill freeze in early September.

Respondents were more optimistic about job security over the previous month, with a 1.3-point increase from August to 93.6 overall, albeit perceptions of job security for the year ahead fell 0.2 points to 118.3.

Employees were also more likely to report worsening business activity (-0.7 ), though measures for the next 12 months were stagnant at 116.5.

Emma McInnes, global head of financial services at YouGov, said: “For the third month in a row, homeowners’ views of their property’s value fell and we may see this fall further still, following speculation around rising interest rates in the months to come.

“It is notable to see an uptick in confidence around household finances and job security, but these were offset by continued sharp decline in confidence around house value.”

Kay Neufeld, head of forecasting and thought leadership at Cebr, said: “The ongoing cost-of-living crisis has anchored perceptions on household finances at rock bottom, while a second consecutive monthly drop in the indicators for business activity in the workplace suggest that economic activity more broadly is slowing.

“Moreover, fast rising interest rates are posing a real danger for the property market going forward, as evidenced by the fall in both indicators related to home values.”