Consumers are increasingly reluctant to venture into the uncertain housing market or to spend beyond essential purchases, according to two surveys out today that suggest households are feeling the strain of tight credit conditions and rising living costs.
A closely watched analysis by the RICS shows instructions to sell properties and enquiries from potential home buyers fell again in June, as did the number of sales completed per surveyor.
Separately, the British Retail Consortium and KPMG report that spending growth on the high street slackened last month, with growth driven more by food price inflation than by consumer resilience.
Jeremy Leaf, spokesman for Rics, attributed the near-frozen housing market to tight credit conditions. 'Transaction levels remain incredibly low with many buyers cut out of the process,' Mr Leaf said.
But many people will also be unwilling to risk buying before house prices have stabilised. Almost nine in 10 surveyors thought prices continued to fall last month, although after seasonal adjustment the balance reporting lower prices fell to 88% from 92.2% in May.
The ratio of completed sales to stocks of unsold property, which economists consider one of the best guides to market conditions, fell from from 19.4% to 18.2%, giving little prospect of any immediate improvement.
Financial Times, The Times, Daily Telegraph, Independent, The Guardian