However, despite the rise, Nationwide said there is still a long way to go with underlying consumer confidence remaining cautious. Sentiment in May remained well below the historical average for the month and down on May last year.
Nationwide said that the rise in confidence in May was largely driven by significant increases in consumers’ outlook for the economy and job market over the next six months, and spending on household goods and major purchases.
Nevertheless, Brits remain subdued about the current economic and employment situation.
Robert Gardner, Nationwide’s chief economist, said: “It seems that, although consumers are starting to cultivate a more positive view of the future, their current situation remains challenging. The still subdued readings of the Employment and the Future Income Indices reinforce the view that household budgets are still under significant pressure.”
He pointed out that the consumer confidence still has a long way to go, having fallen to an all-time low in February this year and remaining suppressed in March and April.
Gardner said: “It is too early to say whether consumer confidence is in a sustained recovery. There are still strong downward pressures, not least higher than hoped for inflation and continued concern around employment, whilst recent announcements of large domestic energy price hikes are likely to dampen consumer mood.
“We would need to see consumer confidence continue to rise over the coming months, for us to be able to say that the economic recovery is truly being felt by the British public.
“For this to happen, we will probably have to see a real improvement in employment and wages or a fall in inflation that would help to boost the purchasing power of people’s take home pay.”
Meanwhile, the BSA Property Tracker survey suggested home buyers’ confidence is tentatively on the rise, with the proportion of people believing now is a bad time to buy falling 8% from 29% in March to 21% in June.
The BSA found that the proportion who think now is a good time to buy remained the same as in March at 41%.
Raising a deposit remained the top barrier to buying for 62% of respondents, while 53% highlighted problems getting a large enough mortgage.
While lack of job security remained on the main factors holding prospective buyers back, those naming it fell by 9% on the last survey in March to 48% in June.
People concerned about property price falls also dropped by 5% to 19%. The BSA found that, for the first time since September 2010, a greater proportion of people think house prices will rise rather than fall in the next 12 months.
Paul Broadhead, head of mortgage policy at the BSA, said: “There appears to be a little less negativity in consumers’ opinions on the housing market, but it remains to be seen whether this is just a blip or the start of a trend.”
He added: “More people think that raising a deposit is a barrier to buying property, which though unsurprising when considered against the ongoing squeeze on household finances, could indicate that more people are looking at getting into the market.
“This barrier to potential buyers might reduce in the months ahead as a greater number of higher LTV products come onto the market.”
