Homeowner pessimism drags UK consumer confidence down further
October 13th, 2022, Christien Pheby

Homeowner pessimism drags UK consumer confidence down further

  • Overall index falls by -1.1 points
  • House value metrics for the past 30 days (-5.6) and next 12 months (-4.5) fall, bringing down overall index
  • Personal finance outlook sees a modest gain (+1.3) following energy bills freeze, but retrospective measures slightly worsen (-0.8)

  • Workers’ perceptions of short-term job security improves (+1.8), but outlook stagnates (-0.2)

Consumer confidence declined for the second month in a row, according to the latest analysis from YouGov and the Centre for Economics and Business Research (Cebr). The overall index declined from 98.8 to 97.7 (-1.1) thanks to a steep deterioration in homeowners’ attitudes towards their house values.

YouGov collects consumer confidence data every day, conducting over 6,000 interviews a month. Respondents answer questions about household finances, property prices, job security, and business activity, both over the past 30 days and looking ahead to the next 12 months.

Spiralling energy bills and inflation have brought household finance measures to a series of historic lows this year, and both measures remain strongly negative. Consumer perceptions of their personal finances over the past 30 days saw a slight decline from 57.2 to 56.5 (-0.8* - rounded) – though outlook saw an improvement of 1.3 points, rising from 41.8 to 43.1 . The Prime Minister’s “freeze” of energy bills at £2,500 a year for a typical household may explain this mild increase in optimism, though it’s worth pointing out that (in this area) the public remains in dour spirits.

House value metrics saw more dramatic changes. For the third month in a row, homeowners’ views of their property’s value became more negative. With a 5.6 point fall from 130.4 to 124.8, the retrospective measure saw the steepest fall since the early days of the pandemic (April ’20). Outlook also diminished from 124.9 points to 120.4 (-4.5).

Following Chancellor Kwasi Kwarteng’s “mini budget” on September 23, some commentators have speculated that house prices may crash due to rising interest rates. Most of our sample will have answered before then, but this anxiety may have been present in the minds of later respondents. Reports suggest that house prices saw a slight decrease in September.

Among workers, respondents were more likely to report greater job security over the past 30 days – with this measure rising from 91.9 to 93.6 (+1.8 – rounded), although outlook, which crept downwards from 118.5 to 118.3 (-0.2) didn’t see comparable gains. Employees were also more likely to report worsening business activity (-0.7), though at 116.5 in both September and August, measures for the next 12 months were stagnant (-0.1.)