Housing market confidence rises
Published: 30 July, 2013
Merchants are set to gain from a surge in home improvements when the government’s Help to Buy mortgage scheme is extended to second-hand properties from January.
Builders' merchants have already reported sales in May 9% higher than a year earlier. A boost to home maintenance is expected once the second stage of the Help to Buy scheme comes into force next year, according to research by investment bank Liberum Capital.
Charlie Campbell, author of the Liberum Capital report, says mortgage transactions are the biggest driver of housing repair and maintenance, and lending volumes have already improved as a result of previous stimulus schemes Funding for Lending and First Buy.
Mr Campbell estimates the Help to Buy scheme will boost mortgage approvals by 20% and housing transactions by about 14% by the end of 2015.
“If you become more upbeat about the value of your house, you’re much more willing to install a new kitchen or a sundeck,” he says. “The builders' merchants are gaining strength anyway because of the underlying rise in housing transactions but once the measures come in on January 1 it will have a much bigger impact.”
Liberum estimates that companies such as Travis Perkins and Wolseley are most likely to enjoy a sales boost as a result.