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Housing market confidence on downward trend, says Woolwich

The fall in confidence demonstrates that recent interest rate rises have had a significant impact on the housing market.

The Woolwich index shows that 56% of homeowners believe their property will continue to increase in value compared to 62% in July and 65% in June. This is the largest month-on-month drop since the Woolwich started measuring consumer confidence in 1998. That said, confidence is still slightly higher (1%) than August, 2003.

Andy Gray, head of mortgages at Barclays and The Woolwich, says: “This further fall in confidence confirms our prediction of a downward trend which we expect to continue at a slower rate until the end of the year.

“In light of this and other economic indicators, we do not expect the Bank of England to raise interest rates tomorrow.”

Barclays and The Woolwich anticipate one further 0.25% interest rate rises by the end of this year taking interest rates to 5% and would advise consumers to review their finances in light of future increases.

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