Tuesday, July 6 2004
Mervyn King’s warning that house prices could fall seems to have had a mixed impact on consumer confidence, according to research by Nationwide before and after the event.
The mortgage lender found a shift in homeowners’ perceptions of the likely value of their property in six months’ time following his evidence, as fewer people expected to see a rise by Christmas.
Before Mr King made his opinion known, 66% of homeowners said they expected the value of their homes to rise but following reports of his comments that figure now stands at just over half (52%).
Stuart Bernau, Nationwide’s executive Director said: ‘Although more people are pessimistic about the future value of their homes, over half of them still expect them to be worth more by the end of the year.
‘The short term economy continues to look robust with the jobs market remaining strong and interest rates continuing to be at historically low levels despite recent rises in the base rate. People feel more cautious about the state of the economy in six months time however, and this may lead to them revising future purchasing decisions.’