Retailers of home improvement products are having a glittering year on the London stock market, as cash-strapped UK consumers turn to DIY projects after being priced out of moving home or undertaking expensive renovations.
Publicly listed retailers including the B&Q owner, Kingfisher, as well as Topps Tiles, Wickes and the sofa seller DFS are on track for double-digit percentage share price increases of as much as 56% this year.
Kingfisher and Topps Tiles have posted share price increases of 26.5% and 13% respectively, their best annual gains since the pandemic, while a 23% year-to-date rise at DFS is its strongest year since 2019.
Kingfisher, which also operates in France and Poland, has issued two profit upgrades since September on the back of the company’s strong performance in the UK.
The biggest winner is Wickes, a leading retailer of paint, whose shares have risen 56% in its best year since listing on the London Stock Exchange in 2021.
Retailers in the home improvement sector have been aided by the closure of their rival Homebase, which collapsed into administration in November last year.
Analysts have pointed to a stagnant housing market: Halifax, the UK’s biggest mortgage lender, reported flat growth in house prices in November this year and a significant slowdown in annual growth to 0.7%, down from 1.9% in the same month last year.
Slowing house price growth reflects weaker buyer demand, as cash-stretched consumers turned their focus to cheaper DIY projects to spruce up their existing homes.
Measures introduced in last month’s budget, including increasing the minimum wage and changes to property taxes, could further spur the DIY market as the cost of activities such as eating out increases.
“That may drive a continued shift toward eating and spending more time at home,” Manjari Dhar, an analyst at RBC Capital Markets, told Bloomberg.
Data from the Office for National Statistics shows that spending on household goods has often outpaced wider retail sales this year.
However, ONS figures showed the rate of unemployment hit a four-year high of 5.1% in the three months to October, which could dampen the DIY boom.
While home improvement goods retailers have experienced a stellar year, the share prices of building materials suppliers have lagged, suggesting some homeowners have also put large home renovation projects on the back burner.
Shares in the kitchen supplier Howden Joinery Group have risen by 5% this year, while Travis Perkins has suffered an 11% fall.
Earlier this month, Halifax said buyers attempting to get on the property ladder in the UK were now in the best position to snap up a home in a decade.
Halifax said when property prices were compared with average incomes, affordability was at its strongest since late 2015.
However, data published by the Royal Institute of Chartered Surveyors found that new buyer demand had declined to the lowest level since 2023.
