Housing market optimism falls to all time low: Lloyds

Consumers are significantly more pessimistic about the UK economy than they were 12 months ago, according to Lloyds Bank research.

Related topics:  Finance News
Rozi Jones
27th December 2017
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"Although inflation fears continue to concern consumers, it is positive to see that younger people seem more upbeat about their own job security"

63% of people said they felt negative about current levels of inflation which is a sharp increase of 14 percentage points since November 2016.

Similarly, negative attitudes towards the country’s financial situation (up 5 points to 66%) and the housing market (with those feeling not good or not good at all up 6 points to 65%) have also worsened over the past year.

Only 42% of home owners said they felt positive about the UK housing market in November which matches the all-time low figure from February 2017. Nevertheless, home owners remain more confident than people who rent. Only 25% of those who don’t own their own home expressed a positive opinion.

However there is some optimism among younger people. Although 18-24 year olds are significantly more negative about the country’s financial situation as a whole than last month (down by 12pp), when asked about their own job security they are more upbeat with 79% feeling positive about their prospects (up by 4pp on October 2017).

It is even more encouraging that 18-24 year olds expect their annual income to rise on average by £1391 over the next year, a rise of 4.9% on the average annual salary of £28,600.

Working 25-34 year olds predict that they’ll receive an average pay rise of £1274.50 in 12 months’ time, significantly more than the average predicted increase of £622.50 among those who work across all age ranges. This contrasts with those over 45 who expect their income to decrease by this time next year.

Robin Bulloch, Managing Director of Lloyds Bank, said: “Although inflation fears continue to concern consumers, it is positive to see that younger people seem more upbeat about their own job security and future earning potential. It remains to be seen whether predictions about their pay increasing will be accurate, but any rise in incomes will provide a welcome boost to the economy and help people with the rising cost of living.”

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