According to the monthly Nationwide Consumer Confidence index, this year’s cautious optimism is a departure from the stance taken by homeowners in 2009. At the beginning of last year consumers predicted a fall of 6.2% in house prices.
Interestingly, the 1% growth figure quoted was just 1% lower than the 2% increase expected in the run up to the 2005 General Election.
April’s index recorded a marginal monthly pick-up in overall confidence from 73 points in March to 74 in April, although the annual improvement is far more marked, with the index now standing at 23 points higher than the same time last year.
Faith in the present situation improved in April, but expectations for the future fell for the second month running. The Expectations Index now stands at 104, 14 points below the high of 118 recoded in February.
Confidence in the spending situation remained broadly stable following a small increase in March and now stands at 96.
Mark Saddleton, Nationwide’s head of economic and market analysis, said: “As the UK braced itself for a period of political uncertainty, confidence remained broadly stable during the month of April – potentially a result of consumers maintaining a reserved outlook in the run up to the recent General Election.
“This stability has done little to repair the nine point fall seen in March’s figures after the index had reached its highest level for two years in February. Confidence is now 23 points higher than at the same time last year.
“However, further increases may be muted as consumers wait to see what impact a hung parliament and the deficit reduction plans of a new government will have on the economy and employment situation.
“With confidence still fragile following the recent recession, there is a very real possibility that the index could experience further volatility in the coming months if uncertainty remains following the formation of a coalition Government.”
