Ten tips to survice a property market downturn

Consumer confidence has plunged to a 13-year low this month as people worry about the stalling housing market and challenging economic conditions.

The index of confidence, compiled by Gfk/NOP, fell to minus 17, down from minus 14 in January, with people reporting greater concern about their financial situation. The balance of consumers worried about economic conditions in the coming year slid to minus 40, down from minus 36 last month.

Rachael Joy, of GfK NOP, said: “Consumers are feeling a little less confident about their personal finances and much less confident about the economy as a whole. This may have been fuelled by the wide reporting on a housing market slowdown, high fuel and energy costs and rising food prices.”

This came as figures showed that activity in the housing market cooled dramatically at the end of last year. Sales fell 22 per cent to 90,581 in November, compared with 115,873 for the same time in 2006.

Just days ago, the British Bankers' Association said the number of loans granted for new home purchases in January was one of the lowest on record.

There was a slivver of good news for homeowners as the Land Registry said that house prices rose by 0.9 per cent last month, taking the average cost to £186,045. But this was not enough to offset a continued slide in annual house price inflation, which fell for the fifth month in a row to 6.4 per cent.

Detached homes have increased in value the least over the past year, with the average price of £266,509 last month only 4.4 per cent more than in January 2007. However, owners of flats have enjoyed a greater increase in the value of their property, with this type of home increasing by 7.6 per cent in the past year to an average £163,289.

Prices rose faster in London than anywhere else and the average cost of a home in the capital was £357,976, about 13 per cent higher than in January last year. However, prices in Wales rose by only 1.3 per cent to an average of £140,289.