Dear Editor
14th February 2012

By now the penny has dropped for most of us. For the foreseeable future the market is not going to bounce back to the easy, credit-fuelled growth market it was.

This month’s Palmer Market Research reported domestic glazing at £3.7bn in 2011, down 4% on the year before. Meanwhile, home improvement markets generally are down in the recession by about a third. Bigger ticket sales such as windows, doors, conservatories, kitchens, bathrooms and bedrooms have suffered the most.

Homeowners are being squeezed; they’re more cautious. Some have money, but few have available money that’s not earmarked for another purpose. Eighty-five per cent don’t have ready access to £2,500 or more. To clarify, only 15% of homeowners can write a cheque for £2,500 on the spot.

Forecasters suggest this is probably how it’s going to be for the next five years or more. So what are the implications to our market?

I believe companies need to ask: do we have the sales tools to convert higher value enquiries into orders? Are we able to help potential customers buy from us? Is our offer to the customer fit for purpose in today’s credit-starved market?

If a business selling large ticket items places all its focus on the ‘cash’ buyer and offers no alternative method of payment it is surely restricting the potential customers they can sell to.

Many small to medium sized home improvement companies don’t offer ‘in house’ finance to help customers buy because they see it as complicated and difficult. They don’t feel comfortable with the high-interest rate products they associate with high pressure sales. But times and products have changed, and with the right provider it can be simple for well established companies to offer homeowners easy access to attractive unsecured lending options that help them buy.

We find that companies who switch to selling ‘soft-sell’ unsecured loans such as ‘low-interest’ or ‘Bank Buster’ rate finance (from 5.9% APR), ‘Buy Now - Pay Later’ and ‘interest free’ credit - soon sell more than they did before. Companies using finance to help them sell generally outperform those who don’t have that advantage.

Yours sincerely


Pete Nicholson
Partner, Consumer Credit Solutions