PROPERTY MARKET UPDATE: Has Andy Burnham fuelled consumer optimism?

One of the most interesting reports this month is not so much from the property indices, but from GfK Consumer Confidence Barometer.

The GfK Consumer Confidence Index is a useful early indicator of future housing market activity because it measures how people feel about their personal finances, the wider economy and whether now is a good time to make major purchases.

As buying a home is one of the biggest financial commitments most people make, rising confidence can encourage more people to buy, sell or move, while falling confidence often leads to delayed decisions.

Although it doesn’t measure the property market directly, it provides valuable insight into how willing consumers may be to move over the coming months, making it a helpful indicator for anyone working in residential property.

Since this time last year, the main GfK index was recording confidence of -19, which fell to -23% in June. People’s view of the general economic situation in the next few months was -36 in June, but has suddenly dropped to -28%, a big fall and the only thing that could really be driving this is having a new Prime Minister.

Of course, it’s way too early to know if this optimism is going to impact on the property market and the data we have this month suggests that the confidence may well not extend to buyers and sellers yet!

In fact, the main view from the indices is that buyers are not in rush and indeed have been distracted from buying – with our unusually, but much welcomed by most, sunny weather as well as a certain football championship to follow!

And, although the indices usually record a drop in activity this time of year (everyone needs a holiday!) most are suggesting that falls are more than normal, with Richard Donnell from Zoopla reporting: “The housing market has experienced a sharper summer slowdown than expected, with agreed sales running 9% below last year as higher mortgage rates and political uncertainty encourage more buyers to pause.”