UK consumer confidence in the housing market has dipped for the second month running, claims the latest Woolwich Mortgage Index, in contrast to a significant rise in gross mortgage lending.
The consumer research conducted by the Woolwich has shown that average consumer confidence has fallen from 61% to 59% throughout the UK over the last three months.
Alongside the research that monitors how optimistic homeowners are about house prices, gross mortgage lending has increased by 17% over the last month. UK Gross Mortgage lending exceeded £20 billion in July 2002 increasing from £17.1 billion from June 2002.
Last month revealed the first fall in confidence since November 2001 and when combining the consecutive falls, confidence in the housing market has reduced by 5% since May. However, homeowner's confidence remains stronger year on year when average confidence was 52% in July 2001.
Andy Gray, head of lending at Woolwich, says: “We have seen a clear indication that people's confidence in the housing market is starting to decline, however this is not reflected in the level of activity which has once again seen great results. June was a quiet month with the impact of the bank holidays and World Cup tempering activity and increased lending for July is a direct result of the market playing catch-up.
“As reduced confidence restrains people's buying activity we will see more moderate growth in the housing market over the coming months.”