Business Outlook 2016
Investment habits in our homes are changing.
We all know that a lot of home improvement expenditure is driven by people moving house. Either they are renovating a property they have just bought, putting their own stamp on their new home, or they are preparing their existing home for a more lucrative sale as they move up the property ladder.
Any Guild member who is involved in the £14b+ home improvement sector is concerned with trends and demand, so we take a look at what is happening out there and why.
Some 64.2% of properties in this country are owner occupied and right now we see people moving every fifteen years or so, which is much less than before. In the last twenty years of the last century, on average, we moved every three or four years, mainly because house prices were rising so quickly, doubling every five to seven years.
That has changed since the millennium. The figure is much more like thirteen years now, even in the property hotspots, and that in itself slows the rate at which people trade up. Add to that the rising costs of moving and the Chancellors stamp duty policies and you get to that fifteen year figure for a moving cycle.
However, that does not mean that homeowners are not improving their homes. Far from it. The financial crash of 2008 obviously slowed things down considerably, but with every other TV programme focussing on home design there is still huge demand for your products and services. However, that demand is starting to look rather different. Manufacturers are telling us that whilst order numbers were somewhat flat in 2015, a year that proved to be a bit of a false dawn in growth terms, average order values are rising.
Take the window market as an example. Back in those days when we were moving every five years, uPVC windows became a huge seller. Energy savings and an approved appearance delivered quick and relatively cost effective kerb appeal and we all moved onto the next one. And the uPVC window is still the biggest seller today, except the product has changed with the market. The trends are now to imitate timber, in other words focussing much more on appearance, whilst the sales of timber and aluminium windows are rising all the time.
There is logic behind this focus on appearance and investment in quality, because the products sold are always a higher price. We are staying longer in our homes so we are investing for ourselves to enjoy, as well as hopefully increasing the value of the property. In another article in this newsletter we talk about glazed extensions replacing the demand for conservatories and this is driven by the same thing – if you stay longer in a property your family will probably grow in the meantime and therefore you invest in more living space.
All of this requires a change of attitude when selling to consumers. We are hearing from our members how they do a lot of listening before offering any solution because the home-owners intentions seriously affect the outcome. If the client intends to stay in the property for a decade or more, they have time to see a payback on a whole range of products the person looking to sell in a year would never consider.