Signs of improvement
• Redrow has started building again.
• Barclays predicts sterling to make gains.
• RICS report rise in new home buyer enquiries.
• NHBC reports rise in housing starts.
• Lending to small businesses up £271m.
• Mortgage approvals double to £1.54bn in March.

A flurry of encouraging signs from the housing, construction and finance sectors has given fresh hope of a way through the recession for the timber trade.

A Barclays director told hardwood traders in London last week that “confidence was showing early signs of returning” in a week which also saw Redrow confirm it was ending its building freeze and Bovis Homes reporting that its private house reservations were up 71% in the first 17 weeks of 2009.

Mark Fletcher, relationship director at Barclays Commercial Banking’s retail and wholesale team, told traders at the London Hardwood Club that disposable incomes had increased and mortgages approvals were picking up.

He also gave hope to importers by declaring that sterling was over-devalued and predicted the pound to be worth US$1.80 in 12 months.

Mr Fletcher said Barclays was forecasting 0.3% growth in 2010 and warned the timber industry not to over-reduce capacity, as it needed to be ready to benefit from the upturn. But he said traders should still be cautious and manage cash flow and stock levels carefully.

Redrow said it had restarted work on certain developments and was starting construction on new sites. “Sales volumes in the housing market seems to have stabilised,” it said.

Barratt also said there were early signs of stability in the market.

Meanwhile, a Royal Institution of Chartered Surveyors (RICS) report found that 41% more chartered surveyors reported a rise than a fall in new buyer enquiries – up from 32% in March and the highest figure for almost a decade.

“This is the first time that surveyors have been universally optimistic about sales since August 2006,” it said.

NHBC housing stats show the first quarter-on-quarter rise in applications to start new homes for almost two years, with 16,232 applications received during the first quarter, up from 15,866 in the fourth quarter of 2008. But house prices declined 1.7% to a five-year low, says Halifax.

Other good news includes the level of bank lending to small businesses rising by £271m in March, according to figures from the British Bankers Association (BBA).

“The stock of lending to small businesses is around 5% higher than a year ago and has risen in each of the first three months of 2009, reflecting general banking support and individual bank pledges to make finance available,” said BBA statistics director David Dooks.

Meanwhile, the Building Societies Association said mortgage approvals by building societies in March doubled to £1.54bn compared with the previous month.

Costain and Rok have given upbeat trading statements and Travis Perkins can see signs of stabilisation in the market despite its sales continuing to fall.

Even influential BBC business editor Robert Peston thinks the banks are probably past the worst of their problems.