This confirms the Woolwich's prediction last month that confidence would continue its downward trend. 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 per cent of homeowners believe their property will continue to increase in value compared to 62 per cent in July and 65 per cent 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 (one per cent) than this time last year (August, 2003).
Andy Gray, head of mortgages at Barclays and The Woolwich, said: "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 per cent interest rate rises by the end of this year taking interest rates to 5 per cent and would advise consumers to review their finances in light of future increases.
