UK consumers becoming less worried about financial constraints

After years of doom and gloom, British consumer confidence finally appears to be on the rebound, slow as that upward climb may be.

"The economy has settled in a place, which is just not nearly as good as it used to be," Andrew Murphy, retail director at the employee-owned chain, recently told Reuters. "But people now don't feel scared by that, whereas three years ago they were genuinely scared about what this new reality meant."

Multiple polls have reported that consumer confidence is the highest it's been in a while, and hiring has started to show signs of improvement as well. In addition, a recent Reuters survey of 61 economists projected that the United Kingdom's economy is in a slightly better position than expected.

Murphy believes that these improvements will mostly be felt in the mortgage industry, predicting "that home will strengthen a bit through this year." The sales market, on the other hand, is where things become a bit murky.

Lending gap starting to fill in
One of the biggest obstacles to boosting consumer spending in recent years has been a lack of available funding for residents at or near the subprime credit level. Banks ruled out anyone they deemed risky in the immediate aftermath of the recession, and those consumers have only seen their credit levels suffer since then.

Fortunately, the short term lending market has been picking up, although banks and financial institutions have had almost nothing to do with that. Instead, many alternative lenders have stepped in to fill the funding gap.

These firms typically use different scoring methods, such as Payment Reporting Builds Credit (PRBC), to determine whether or not a consumer is eligible to receive a loan. The PRBC scoring measure takes alternative financial factors into account, such as whether a person has been able to make utilities payments on time in the past.