RTTNews - Corrects the preceding month reading to 59 from 50 in the second paragraph
Consumer confidence in the UK improved in July on expectations of higher house prices in the next few months, a report from the Nationwide Building Society said Wednesday. However, consumers remained pessimistic about buying big ticket items.
The consumer confidence index edged up to 60 in July from 59 in the preceding month. Martin Gahbauer, Nationwide's chief economist said consumers appear to remaining cautious but not panicked by the economic climate.
The most significant changes in consumer confidence this month was that confidence in spending has fallen. Further, for the first time for over a year, consumers expect the value of their homes to rise over the next six months, the survey found.
Consumers may have been reassured by reports that the housing market may be starting to recover and manufacturing output is no longer falling as rapidly as it was a few months ago, Nationwide said.
Only 21% of people now expected the economy to worsen in the next six months compared to 53% at the start of 2009. At the same time, fewer people were expecting to buy a house or a car, with the proportion falling to 35% in July from 40% in the preceding month.
Recent surveys showed signs of improvement or atleast stabilization in the housing market. A report released by mortgage lender Halifax on Wednesday showed that house prices climbed 1.1% month-on-month in July, reflecting the second rise in the past three months. In the three months to July, house prices rose 0.8%, the first quarterly rise since October 2007.
The Nationwide's house price report released last week showed that house prices grew in July by 1.3% month-on-month, after rising a revised 1% in June, and marking the third consecutive month of increase. On a yearly basis, house prices fell at a slower pace of 6.2% in July compared to a 9.3% drop in the preceding month.
Further, another report from the Land Registry released last month showed that house prices rose for the first time since January 2008 on a monthly basis.
Meanwhile, property website Hometrack reported that housing prices were flat on month in July for the third consecutive month. On an annual basis, house prices were down 7.7% slowing from the 8.7% decline in June.
Mortgage approvals for house purchase also rose to their highest levels in more than a year in June, the Bank of England said last week. The number of loans approved for house purchase totaled 47,584 in June, the highest since April 2008, and bigger than 44,169 in May. The Building Societies Association said the value of mortgage approvals totaled GBP 1.81 billion in June, highest in a year, down from GBP 2.72 billion in last year, but up from GBP 1.6 billion in May.
Meanwhile, another report released by the Gfk last week showed that the consumer confidence index remained unchanged in July from June, at minus 25. The group's consumer outlook index was unchanged in July as well, holding steady at the June level of minus 8.
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