Who Else Gains As Carney Steadies The Housing Market?

As buyers turn new houses into homes, footfall finds its way to the DIY and furnishing retailers.

| More on:

The content of this article was relevant at the time of publishing. Circumstances change continuously and caution should therefore be exercised when relying upon any content contained within this article.

When investing, your capital is at risk. The value of your investments can go down as well as up and you may get back less than you put in.

Read More

The content of this article is provided for information purposes only and is not intended to be, nor does it constitute, any form of personal advice. Investments in a currency other than sterling are exposed to currency exchange risk. Currency exchange rates are constantly changing, which may affect the value of the investment in sterling terms. You could lose money in sterling even if the stock price rises in the currency of origin. Stocks listed on overseas exchanges may be subject to additional dealing and exchange rate charges, and may have other tax implications, and may not provide the same, or any, regulatory protection as in the UK.

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More.

The Bank of England has stepped in and implemented measures to cool the overheating housing market, as economists warn of an impending property bubble. The market reacted positively to the timely intervention with all the house builders seeing share price rises.

Who Else Will Reap Rewards?

The UK housing market is the biggest driver of home improvement and furnishing retail sales. Analysts are predicting that over a million people will move house this year, and they are anticipating growth of 5.5% this year and 6.3%in 2015.

As buyers embark on turning new houses into homes, footfall consequently finds its way to the DIY and furnishing retailers. Here are three companies that could benefit:

carpetright

Carpetright plc (LSE: CPR) is Europe’s largest flooring retailer its business is closely tied to the property market because householders buy new flooring when they move house. Although the UK’s property market surged recently the company has issued a series of profit warnings.

Lord Harris, founder and chairman of Carpetright said the time lag between buying a property and spending money on refurbishing it has increased as buyers “have to pay a larger deposit than they used to, which gives them less money. Buyers are now waiting to fit new carpet and flooring whereas before it was one of the first things they did.

It is however upbeat about future prospects for the business, with the launch of several new products in a new and rapidly growing segment. Group revenues declined 2.2 per cent in the year ending April, with an underlying pre-tax loss of £4.6m compared to losses of £9.7m for the previous year.

b&qKingfisher plc (LSE: KGF) is Europe’s largest home improvement retailer and the home of B&Q which is the UK’s leading DIY and garden center retailer Ian Cheshire, chief executive of B&Q owner Kingfisher, has made it clear he believes a return to a more buoyant housing market will reverse the decline that has hit the DIY market in recent years.

The DIY market has shrunk to £7.54bn in 2012 from £9.76bn in 2004, but Cheshire believes this is due to a lack of first-time buyers and not a more fundamental decline. Investors seem to think he is right – Kingfisher’s shares are up more than 40% this year to date.

travisperkinsTravis Perkins plc (LSE: TPK) is the building materials supplier to the trade, and the company behind brands such as Plumbing Supplies, Tile Giant and Wickes. It is now one of the largest suppliers to the UK’s building and construction industry. Time-pressured homeowners are increasingly turning to tradesmen to do refurbishment work that they would have previously tried themselves and Travis Perkins has seen its share price increase almost 13% on last year’s price. The company has eleven analysts that have assigned it a buy rating and the average price target is £18.25 and is currently trading at £16.45

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Lisa Walls-Hester does not own shares in the above companies.

More on Investing Articles

Black father and two young daughters dancing at home
Investing Articles

1 FTSE 250 stock I own, and 1 I’d love to buy

Our writer explains why she’s eyeing up this FTSE 250 growth phenomenon, and may buy more shares in this property…

Read more »

View of Tower Bridge in Autumn
Investing Articles

The FTSE 100 is closing in on 8,000 points! Here’s what I’m buying before it’s too late!

As the FTSE 100 keeps gaining momentum, this Fool is on the lookout for bargains. Here's one stock he'd willingly…

Read more »

Investing Articles

3 ideas to help investors aim for a million-pound Stocks & Shares ISA

The UK has a growing number of Stocks and Shares ISA millionaires, and this plan may be one of the…

Read more »

Illustration of flames over a black background
Investing Articles

2 red-hot UK growth stocks to consider buying in April

These two growth stocks are performing well, but can they continue to deliver for investors through 2024 and beyond?

Read more »

Charticle

Is JD Sports Fashion one of the FTSE 100’s best value stocks? Here’s what the charts say!

The JD Sports Fashion share price remains a wild ride during the first quarter. Could it be one of the…

Read more »

Investing Articles

Could the JD Sports Fashion share price double in the next five years?

The JD Sports Fashion share price has nearly halved in the past five years. Our writer thinks a proven business…

Read more »

Bus waiting in front of the London Stock Exchange on a sunny day.
Investing Articles

If interest rate cuts are coming, I think these UK growth stocks could soar!

Falling interest could be great news for UK growth stocks, especially those that have been under the cosh recently. Paul…

Read more »

Investing Articles

Are these the best stocks to buy on the FTSE right now?

With the UK stock market on the way to hitting new highs, this Fool is considering which are the best…

Read more »