As the economy continues to stagnate, just narrowly avoiding the dreaded triple dip recession, the Government is working double time to give the housing market a much needed boost.

The belief is that only when consumers feel better off will the economy be able to lift itself out of its protracted rut. 

By January 2014, there will be four schemes pedalled out using public funding to help both first time buyers and second steppers.

Adrian Coles, director-general of the Building Societies Association, said: “The results from the latest Property Tracker survey give a more encouraging snapshot of the housing market.

“They fit well with the financial results from a number of home builders and chime with lending, at least in the mutual sector.

“Over the past 12 months, mutual lenders have increased mortgage lending by 30% and around one in every three loans made has been to a first-time buyer.

“That said, house building is an important growth engine for the economy and we have a desperate need for more homes.”

The new schemes add to the wide range of measures introduced since 2010 to get Britain building, help aspiring homeowners onto the property ladder and make full use of the country’s housing stock. These include:

The outlook for the next two years is rather bullish for the housing market with analysts pointing to the money from different public funds acting as catalysts for a housing market that, in truth, has not seen a drive similar to this since the 1960s.

Those looking to invest in the housing sector in a more liquid way will be tempted to play the shares of companies well positioned as beneficiaries of the new funds being channelled into this space such as estate agents and house builders.

According to the latest Royal Institute of Chartered Surveyors (RICS) UK Construction Market Survey, the construction sector saw workloads rise in the first quarter of this year for the first time since 2007.

UK house builders have not reported profit warnings since 2009, according to Ernst & Young, and are tipped to recover faster than other sector, despite the sluggish economy.

Ernst & Young says that a rising property market, a wider mortgage market and the Government’s new housing scheme should provide a significant boost for the housing market and home construction in particular.

So far there have been strong growth reports from companies like cash-rich Persimmon and well-funded Barratt. Bovis, Taylor Wimpey and the sector as a whole have reported increased enquiries and things are seemingly looking up.

Estate agent, Countrywide, surpassed expectations recently with a successful stock market flotation, while there are talks Foxtons may be next to get in on the ‘going-public’ action.

Experts say that companies well placed to profit from the increasing numbers being forced into the rental market will also benefit.

Toby Belsam who runs the UK Aviva Investors Small Companies fund says: “Historically estate agents have been focused on selling new properties and lettings have been seen as the poor cousin of the house sales services.

“What LSL and Countrywide have recognised is that lettings is a very good, steady revenue, especially in the current market where people can’t afford houses and they have been forced down the rental route.”

“The volume of housing transactions is way below historic averages and probably a third of what it was at the peak of the market.

“We are hopeful that some of the incentives the Government has put in place and the mortgage market will open up to people. Estate agents like LSL will be able to benefit from the volumes of the transactions rather than the house prices themselves.”

Rental prices are steadily going up and the buy-to-let sector is also an attractive space for companies well placed to benefit from landlords looking to rent out properties through intermediaries.

Decorating firms will also benefit. Top Tiles is one company where a boost in the housing market will translate to profits.

Belsam adds: “The big issue at the moment is mortgage availability, but the Government has clearly recognised that. The banks are gradually rebuilding their balance sheets and the government is clearly putting pressure on them to lend to households and small businesses.

“The other important thing is general confidence, and hopefully as we see a more steady economic recovery and less macro-economic shocks and fewer headlines like ‘the euro imploding’, we will see confidence return.”

Investors should note that investing in this space should, like other investments, be with a long-term view.

The knock-on effects of the Government’s initiatives will not be fully felt until at least well into 2014 and beyond, as the time lag between approving a build and construction can take as long as 73 weeks.

It’s still early days to be able to say whether the Government initiatives will have the exact desired effect; however the housing market does seem to be responding in the right direction, albeit at a much slower pace than the industry and Government would have hoped.