Enabling "prudent mortgage lending" to first time buyers (FTBs) will help reverse declining sales in DIY, gardening, homewares, furniture and floor coverings that accounted for £34bn in sales last year, according to the BRC and Genworth analysts.
Trend analysis from 2005 to 2012 showed "a strong relationship between lack of mortgage lending and falling sales on the high street," according to the BRC.

"A lack of lending leads to lack of productive spending that's impacting the economy and jobs," said Angel Mas, ceo of Genworth's mortgage insurance business in Europe.

"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, home wares, furniture and floorcovering products have fallen by five per cent since the start of this year and could have fallen by more than 10 per cent by the end of 2012."

BRC director general Stephen Robertson 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."

Genworth and the BRC predict that the current depressed levels of mortgage lending will not only lead to more retail casualties but threaten thousands of retail jobs.

Both have welcomed schemes such as Funding for Lending as well as other initiatives announced this month, but they maintain it is the private sector that holds the key to kick starting recovery and first time buyers are very important in this regard.

Banks and building societies have an opportunity, says the BRC, to acquire new customers as well as have a significant impact - more than any other measure currently being considered - to stimulate retail sales in the DIY and home improvement sector and potentially help create new job opportunities for workers in the UK.