Research by Genworth Financial and the British Retail Consortium found that low levels of lending to young people had caused declines in sales of household goods, homewares and furniture.
The research looked at the link between FTB lending and retail sales over the last eight years and estimated that around £34bn in sales were lost in the past year because of low lending figures.
The report added that a lack of lending had led to a reduction in jobs in the retail sector.
Angel Mas, Genworth’s CEO of mortgage insurance in Europe, commented: “A lack of lending leads to lack of productive spending that’s impacting the economy and jobs.
“Close examination of the data we have on mortgage lending uncannily mirrors falling retail sales on the high street over the same period and this is statistically relevant. In particular, sales of DIY, gardening, homewares, furniture and floor covering products have fallen by 5% since the start of this year and could have fallen by more than 10% by the end of 2012.
“First-time buyers are the lifeblood of the housing market. From an economic perspective, it’s not in our best interests to disenfranchise a generation of aspiring home owners who could afford to repay their mortgages but are excluded because they can’t meet a prohibitively high deposit threshold.”
Stephen Robertson, director-general of the British Retail Consortium (BRC), added: “Home ownership and the availability of mortgage credit are crucial to macro-economic recovery, together with the three million jobs in the retail sector – the largest private sector employer in the UK. BRC data demonstrate just how strongly house-buying drives the sales of furnishings and homewares.
“Our latest figures show housing-related retail sales are the worst in over a year, confirming that renewed weakness in the housing market is having a deep impact on high street spending levels, which in turn affects jobs in retailers and suppliers.
“If measures announced to support construction, by relaxing planning rules, boost the housing market recovery they will also help retail sector.”
