Consumer confidence is holding up despite a dip in gross mortgage lending, according to the latest consumer confidence balance from The Woolwich.
The numbers of those expressing confidence in the market rose from 55% in July to 56% in August, up from the low of 50% in March earlier this year.
Andy Gray, head of mortgages at The Woolwich, said: “Talk of a house price crash seems to have left homeowners cold. Continued confidence in house prices points to a gradual slowing of the market rather than a sharp correction in the rate of house price inflation that looked like it may have been on the cards at the start of the year.”
Despite this, the mortgage arm of parent company Barclays still expects the slowdown in house prices to continue as levels of personal debt are at an all time high, and low earnings growth is being exacerbated by higher household taxes. The Woolwich is predicting that the current low interest rates represent the bottom of a trough and they will rise again next year. It says this will impact on borrowers willingness to take on debt and slow house price inflation further. However, it still expects year-on-year lending to remain high as borrowers continue to remortgage in anticipation of an interest rate rise next year.