Although it had other things on its mind - a rather tense Middle East and Korean peninsular, not to mention the continuing threat of national bankruptcy in southern Europe - the City still had time to welcome the proposed takeover of BSS by Travis Perkins

Travis Perkins’ shares rose to a weekly high of 829p last Friday, and have remained about 6% up on the level they were at before the announcement.

Investors across the pond were equally keen on the deal: American money pushed the builders merchant’s shares even higher on Tuesday. BSS shares, which are now effectively pegged to Travis Perkins’ because of the proposed deal, have done even better, maintaining a 35% rise in the first part of the week, and closing at 438p on Tuesday.

Housebuilders seem less chipper. Some analysts are worried about the government’s “localism” agenda, which would hand housebuilding planning powers to local authorities (see page 14). Kevin Cammack, an analyst with Cenkos, fears that removing central government new-build targets “is BAD news [his capitals] for short-term planning needs, approvals, site outlets and sales. And longer term, it could potentially ’devalue’ housebuilders strategic land holdings”.

Housebuilder shares have been “all over the shop and very volatile” over the past week, according to Alastair Stewart of Investec. Of course, with the markets so jittery, it’s difficult to disentangle their specific problems from the background noise. But the prospect of public sector cuts could have an indirect impact on house prices down the line, even if fears over a rise in the rate of capital gains tax may be contributing to a rush of house sales.

Cammack is just as sombre. “All this paints a rather sobering picture of the short-term housing outlook and at some point over the next three months may heighten the risk of the dreaded ’double-dip’.”

Housebuilders beware …