As the housing boom continues to flourish, the retail sector finds itself with the biggest retail-spending rate since March 2010. We take a look at what a strong housing market means for the high street.
The British Retail Consortium has released figures this week, which showed a rise in retail spending of over 5% from last year, according to the London Evening Standard. January has been a great month in particular for those in the homewares and furniture business, as early 2014 also saw an increase in house buying and building.
KPMG revealed that non-food stores were up 4% on sales from last year, with furniture and flooring having their best year since April 2006. Industrial metals have also seen an increase in sales.
“Better Than Expected”
The impact of a strong housing boom has been felt across much of the retail sector, with only food outlets and retailers facing a downturn. Director General of the British Retail Consortium Helen Dickinson said that the housing market had played a key role in the new confidence in the retail market. She said, “with a record number of people now in work and the continued recovery in the housing market we have seen very strong performances in furniture and other non-food items.”
She said the figures were “better than expected.”
The housing market has already seen a big rise in terms of new builds and home buying. A recent survey carried out by the RICS found that the construction industry is currently undergoing its biggest increase in workload in a decade. Housing in particular was seen as the big beneficiary of this construction boom.
Increase in Builds and Sales
2013 had finished strongly for the construction sector, and 2014 looks to be continuing this upward turn. New builds are expected to increase by 20% in 2014, with an estimated 155,000 new homes being built throughout the coming year. As well as an increase in new builds, there’s also been a sharp increase in house sales, with the number of transactions expected to reach 1.2 million in 2014.
Experts are claiming that government schemes like Help to Buy and Funding for Lending have improved the market, giving young buyers the chance to get their foot on the property ladder and helping to encourage new builds.
As confidence in the housing industry increases the retail sector has clearly seen a positive knock on effect that is good news for the wider economy. As we move further in 2014, we should see an improvement in both sectors.
The recent bad weather has also had an impact on the construction industry, with reports this week suggesting that the government is planning to triple the funding on the road network with more than £24 billion over the next 8 years. The impact of the winter weather has been devastating on many of the countries roads, and with an increase in traffic expected over the next decade, the construction industry is clearly set for yet more investment.
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