London’s housing market is weighing on the minds of consumers, driving the steepest decline in consumer confidence for any major region of the UK last quarter, a poll shows.
Consumer confidence in London and the south east fell by six points for the three month period ending June, making it the least optimistic region in Britain, according to Deloitte.
The professional services firm said concerns over the affordability of housing for renters combined with a slowdown in London’s property market was the major factor driving the pessimism.
“A deep and protracted recession seems to have left its mark, with a period of sustained ‘good news’ needed to shift cautious consumers fully out of their defensive mode,” Deloitte chief economist Ian Stewart said.
Sentiment towards all confidence barometers – household disposable income, job security, debt levels and career progression – underpinned the decline for people in London and the south east.
The national poll, which surveys 3,000 consumers, also revealed a one point fall in overall consumer confidence across the UK, driven by falling sentiment towards disposable income – its first decline in 18 months.
However, confidence in the north is surging, and is now only one percentage point lower than London.
“We have reached a tipping point in consumer confidence. The second quarter of 2015 revealed that the number of consumers displaying defensive behaviour fell while there was an increase in those showing a more expansionary mode,” Ben Perkins, Deloitte’s head of consumer business research, said.
The survey also found that less people are paying off a mortgage than at any time since the third quarter of 2011, driven by a shift in consumer spending towards paying rent as home ownership continues to decline.
Ownership is currently at its lowest level in three decades.