Britons splash out in a pounds 3bn summer orgy of spending

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The Independent Online
Three million people are set to embark on a pounds 3bn summer spending spree thanks to windfall payouts due from building societies and insurers.

A boom in sales of carpets, fitted kitchens, household furniture, cars and holidays will be the result of the sale of millions of shares due to members of societies converting to banks.

The spending is likely to start in earnest this month: Halifax customers are due free shares tomorrow, policyholders with the Norwich Union get theirs in two weeks, while next monthsees the Woolwich handout.

The number of people who have already sold their free Alliance & Leicester shares, which were handed out at the end of April, has passed 750,000. These people will probably have walked away with between pounds 1,300 and pounds 1,600 a head.

Many more people are duewindfalls than will spend them - 7.5 million savers and borrow-ers with the Halifax alone will get shares worth a minimum of around pounds 1,400 each - but as many as one in five beneficiaries of handouts are believed to be planning to sell and spend the lot.

Analysts believe many people have been delaying buying new major items for their home for months until they receive their windfalls. Fridges and ovens are far more likely to be bought, they say, than cheaper goods such as shoes and clothes. Richard Perks, of retail analysts Verdict, said: "These windfalls are ideal for purchases of electrical items, carpets and furniture. There has been a pent-up demand for furniture and these lump sums will help release the pressure on furniture sales and carpets."

The housing market will also be a likely benefactor from the share sell- off. With extra cash in their pocket to put towards a deposit on a house or new furniture, housebuilders and mortgage companies expect the windfalls to boost the housing market even further. Ian Perry, National Housing Spokesman for the Royal Institute for Chartered Surveyors, said: "People have also held back from putting their houses on the market until they get their windfalls and until they see what the Labour government does. We don't have any worries with the money from the building society windfalls coming on to the market."

House sales are already nudging towards healthier figures: the Nationwide Building Society's latest figures show that in May prices were up by 10 per cent on the previous year, and 1.2 per cent on the previous month - the highest increase since the peak of the housing boom in 1989.

John Stewart, of the Housebuilder's Federation, said the recovery was continuing but he did not expect it to lead to a surge in inflation. "There is no question that the windfall gains will have an inflationary push but the Bank of England will use interest rates to depress that effect."

Not all sellers will be spenders, and spenders may not spend all the windfall. Many will sell to pay off credit card or other debts.

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