VIEWPOINT
FIRST-TIME BUYER STIMULUS IS THE KEY TO GROWTH FOR MERCHANTS Mark Hughes, managing director of National Buying Group
IN A SECTOR so intrinsically linked to housebuilding, there are only so many levers independent merchants can pull to facilitate growth in a stagnant market for building materials. Mark Hughes, managing director of National Buying Group (NBG), explains the reasons why an incentive for first-time buyers is so important for the growth prospects of the building materials industry.
Current landscape The Labour government has pledged to build 1.5 million net additional homes in England over this parliament, which equates to approximately 300,000 per year. Current data shows this isn’t going to be achieved.
In 2025, 122,012 new homes were built, down 2% from 2024, while the number of new dwellings in England reached 208,600 for financial year 2024/25, down from 221,410 the prior year. Even with optimistic predictions, forecasts suggest the government will fall staggeringly short, missing its target by almost 700,000 Private housing performance shows growth but at a declining rate. Forecasts for construction in the UK have been revised down in the Construction Products Association’s winter forecasts. According to the latest data, overall construction output is expected to rise by only 1.7% in 2026, a large decrease from the 2.8% growth forecast in October.
When you work in a sector that directly depends on the housebuilding market, this isn’t a good outlook. Most merchants are looking carefully at ways
they can improve margins, whether through careful stock management or working with buying groups and Suppliers to negotiate better deals. There is, however, a finite number of levers to pull to stimulate growth in the building materials sector. This is why we so desperately need the government to incentivise growth in the housing market – specifically by boosting demand and affordability among first-time buyers.
Where is the support? Housing affordability is a significant challenge for prospective buyers, especially for those in the first-time category. The first-time buyer market in the UK represents a huge proportion of mortgaged homes each year, which is why the demographic is so intrinsically linked to the housebuilding market. Since 2022, there have been no new government incentives for first-time buyers. Help to Buy ISAs closed to new savers in 2019, and now the Lifetime ISA remains one of the only incentives for those looking to get on the property ladder. According to Nationwide, “there has been a modest improvement in UK housing affordability over the last year…nonetheless, housing affordability remains stretched by historic standards.” Buying a home is now unattainable for a lot of young people, which means the housebuilding market will remain stagnant along with the building materials market unless there’s an intervention. The latest report from the Builders Merchants Federation (BMF)
June 2026
www.buildersmerchantsjournal.net
‘Buying a home is now unattainable for a lot of young people, which means housebuilding will remain stagnant, along with the building materials market’
to 2.3%. Without a stimulant, first-time buyers, will not be able to contribute the growth that is needed to increase the confidence of building material Suppliers and independent merchants.
Considering the current landscape, it is difficult to see how 1.5 million homes will be built by 2030 without intervention from the
government. Making it easier for first-time buyers to get onto the property ladder will be integral to stimulating housebuilding and getting the market moving again.
Resolve uncertainty Until then, it is important that independent merchants remain prudent in their decision-making until a clear catalyst from the government becomes apparent. Even for those of us running buying groups, it is difficult to make calculated decisions that will benefit our Partners and their customers. Our Category Teams study the markets and work closely with suppliers to secure the best deals possible, pooling our nearly £2 billion in buying power to ensure independent merchants have an opportunity to succeed even in the toughest market conditions.
confirms this stale market, and while figures for Q1 have not yet been published, it is expected that sales for building materials will not experience significant growth.
In fact, the current baseline annual growth for the BMF has been downgraded from 3.1%
If government policies come to fruition and forecasts improve as a result, independent merchants are well-placed to facilitate that growth in demand for building products.
Until then, relative success will only come to those with a keen eye on stock profile, margin management and the agility to respond to any chancing needs from their loyal and local customer base. BMJ
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