Survey Finds Consumer Confidence In A Fragile State

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18th November 2013 13:18 - Housing

New research carried out by accountants KPMG and housing charity Shelter has highlighted the fragile state of consumer confidence in the economy with just one in ten claiming to feel any benefit from the economic recovery. Even though the findings show a third of people think the economy is picking up, far less actually feel part of the recovery with half saying they wouldn’t feel the recovery until their wages rise.

The findings echo fears that post-recession Britain is becoming increasingly divided with wealthier households seeing an improvement in their finances but those at the other end of the scale missing out. The recent growth has also seen the property market pick up, driven by lower mortgage rates. However, critics argue that the bigger picture is the property values, which are already too high, compared to wages. Furthermore, property company Savills estimate that house prices will rise by a further 25% on average over the next five years.

Despite the launch of ‘Help to Buy’, the poll of more than 4,000 British adults found that seven in ten (69%) said that any recovery would not feel real until it becomes easier for young people to own a home, while only 8% believed prospects for home owners had improved with three quarters saying they had worsened over the past year.

With payday lenders such as Wonga and Quickquid coming under fire recently from MP’s, the research findings also suggests one of the symbols of Britain’s struggling households has been the rise of these lenders with an ‘explosive’ growth seen In the number of people seeking help with payday loans on top of other debts, according to Peter Tutton from Debt Charity StepChange.

Commenting further on the findings he said:

“It's not just about the growth of the market... the number of people we're seeing with payday loan debts has grown eight-fold, so we're seeing a much bigger growth in problems than just the growth of the market. As well as that we're seeing more people with multiple payday loan debts, and the size of their payday loan debts are getting bigger. So the average payday loan debt for a StepChange client is now £1,600 and their average income is £1,200”.
 

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