Consumer Confidence Index: Hope for Rise by Property Market Bottom

The Nationwide Consumer Confidence Index climbed two points in February, to 43. While confidence in the present situation dropped for the eighth consecutive month, 19% of people believe the situation will have improved in 6 months, up from 17% in January.

Fionnuala Earley, Nationwide's chief economist, said:

"Consumers' views about the current economic and labour market conditions are in line with the recessionary climate in the UK. However, their increased optimism about the future is encouraging. Spending confidence continues to be resilient, which could reflect the effect of sharp falls in interest rates on consumers' disposable incomes, but is also likely to reflect significant discounts available."

Fionnuala was referring to the fact that only 16% of those surveyed thing that making major purchases like fridges and hi-fis is a bad idea at the moment, while more people think it is a good idea.

The report cited a lack of confidence in the job market, with 64% of people believing the number of jobs available is a major problem. But the expected drop in house prices by those surveyed is now 4.7% over the next 6 months, compared to the 6.2% drop expected by those surveyed in January, this would seem to suggest rising confidence in the property market.

If the economic situation as a whole can improve before or at the same time as the UK property market hits rock bottom, the combination will be excellent for the UK property market recovery, if not it will severely hinder it. A score of 22 for consumer confidence in the current situation is absolutely dire, and if that is not significantly higher, finding the market's bottom won't make as big a difference.