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Survey shows DIY spending hit a two-year high in February

Surging house prices have led to a sharp recovery in sales of do-it-yourself goods, with new research finding that spending in DIY stores reached a two-year high in February, up 11pc year-on-year.

According to the survey, home improvements have been revived by a combination of soaring house prices, the Bank of England’s former Funding for Lending support for mortgages, and the Government’s Help to Buy scheme, which allows buyers to purchase homes with just a 5pc deposit.

The Barclaycard survey suggests that many consumers are sprucing up their homes to drive up their values in preparation for a sale.

Halifax reported that house prices surged 2.4pc month-on-month in February, following an increase of 1.2pc month-on-month in January. This was the largest rise in house prices since May 2009.

“Housing market activity is being supported by substantially improved consumer confidence, markedly rising employment and extended low mortgage interest rates, and is still being fuelled by the Help to Buy initiative,” said Howard Archer, an IHS Global Insight economist.

However, while consumers are increasingly opting for home improvements, their spending on new furniture is falling. Spending in furniture stores dropped 3.8pc last month, Barclaycard said.

The DIY sector was the top-performing sector in an otherwise subdued month for consumer spending.

Overall spending was up just 2pc, despite a six-year high in consumer confidence. This is down from a 4pc increase in consumer spending in January.

Online spending continued to grow in February, up 8.6pc, but the high street struggled, with no spend growth during the period, according to the survey.

“The positive noises on the economy and unemployment have yet to drive significant increases in consumer spend,” said Val Soranno Keating, chief executive of Barclaycard, following the report.

“While consumers feel more confident than they have for several years, the upswing in spending growth that we saw in the middle of last year has slowed as pay packets are not matching the performance of the wider economy.

“Until we see stronger wage growth, spending is likely to continue to be muted,” said Keating.

Source : Rebecca Burn Callander - The Telegraph

11 March 2014
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