Mortgage insurance providers Genworth, together with the British Retail Consortium say that the lack of lending to first-time buyers is having a detrimental knock on effect on sales in DIY, gardening, home wares, furniture and floor coverings which accounted for £34bn in sales in 2011.
Genworth CEO Angel Mas says: “A lack of lending leads to lack of productive spending that’s impacting the economy and jobs. Close examination of the data we have on mortgage lending uncannily mirrors falling retail sales on the high street over the same period and this is statistically relevant. In particular, sales of DIY, gardening, home wares, furniture and floor covering products have fallen by five per cent since the start of this year and could have fallen by more than 10 per cent by the end of 2012.”
British Retail Consortium director general Stephen Robertson says: ““Home ownership and the availability of mortgage credit are crucial to macro-economic recovery, together with the three million jobs in the retail sector – the largest private sector employer in the UK. BRC data demonstrate just how strongly house-buying drives the sales of furnishings and homewares.
“Our latest figures show housing-related retail sales are the worst in over a year, confirming that renewed weakness in the housing market is having a deep impact on high street spending levels, which in turn affects jobs in retailers and suppliers.
“If measures announced to support construction, by relaxing planning rules, boost the housing market recovery they will also help retail sector.” Genworth and the BRC predict that the current depressed levels of mortgage lending will not only lead to more retail casualties but threaten thousands of retail jobs.”
A recent poll of MPs commissioned by Genworth found that 87 per cent said more needed to be done in order to aid FTBs that is currently being discussed.