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The Home Improvement Index 2024

Longer-term trends

While short-term social and economic change can have marked impacts on the mix of home improvement work undertaken in the private sector, there are deeper long-term trends at play.

These can be driven by changes in fashion. The desire for conservatories has waned over the past decade or so. Lifestyle changes also create shift in activity over the long term. For instance, the internet enabled a steady increase in home working, which skyrocketed during the pandemic. This suggests that home offices will in the future become an increasing element within the home improvement mix.

But there are deeper and stronger forces at play. The composition of households is ever changing as are their spending patterns. And, in recent years, we have become increasingly aware that we need to change our homes as the climate changes.

Understanding these longer-term trends helps contextualise the more immediate changes we see in the home improvement data. Dig further into the trends below…

  • Household spending patterns
  • Household composition
  • Climate change

Household spending patterns

Households now spend an increasing share of income on housing. This partly reflects increasing prosperity. It also reflects falling costs elsewhere releasing more money for other things, such as improved housing.

Over decades we have seen steady increases in real earnings accompanied by relative reductions in the cost of many essentials, such as food and clothing. This allows more for more spending on the home.

It might seem unthinkable today, but the data suggest that before the 1980s a greater share of average family spending was on “fags and booze” than on housing, as the chart shows.

How our spending patterns change over time

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These trends for the shares of five categories of spending are based on ONS RPI weights (parts per 1000) used to calculate the overall rate of inflation. The use of RPI weights instead of CPI weights is because it provides a longer time series.

This rising share of spending on the home is likely also to be driven by rising house prices, created by increasing demand and restricted supply. Higher house prices in turn boost the economic case for spending more on home improvements. Meanwhile, with the expansion of televisual and internet services, households enjoy more of their entertainment at home. This provides further incentives to enhance homes.

However, the scope for rising house prices and increasing home entertainment to continue driving home improvement is limited. House prices relative to incomes are already worryingly high and there are growing social concerns over how little time many people spend outside. Furthermore, rising costs in the essentials, such as fuel and food, relative to other spending will limit discretionary spending.

But as these long-term trends weaken, or possibly reverse, other promoters of home improvement are rising. There is the need to increase energy efficiency and to reshape homes for an ageing population. Also, the rise of working from home has sparked a major shift in how we think of the home and provided further incentives for home improvement. The increasing share of household spending that goes on fuel and lighting can be seen in the chart (above). The data suggest that the share has risen from 3.5% in 2019 to 7.8% in 2023.

Household composition

The home improvement market is inevitably influenced by shifts in the composition of households as homes are adjusted to differing household demands. 

Two longer-term trends to keep an eye on are the impact of an ageing population and shifts in student accommodation.

Huge demographic changes over recent years that are still playing out will reshape the home improvement market, greatly influencing what takes place and where. Among the more powerful changes is the ageing of the population. Despite a rise in the pension from 65 to 66 between 2011 and 2021 there was a notable increase in the number of pensioner households. While overall household numbers rose 6.1%, single-pensioner households increased 10.1% and all-pensioner family households rose by 19.8%.

The impact of rising pensioner households is not being felt evenly across the nation. To date there has been an exodus of older families from London. But even here the growth of all-pensioner family households was below 11%. Meanwhile, in the South West where many retire to, the rise between 2011 and 2021 in all-pensioner family households was 24%.

This points to big changes in the types of home improvement as pensioners seek to adjust existing homes to better accommodate later life living. Importantly, the current crop of pensioners is more affluent than before, with better pensions and having accumulated significant housing wealth. This means they are more likely to be able to afford improvements rather than making do.

Meanwhile, there is uncertainty over the landscape for student households with high rental costs and regulatory change, such as the Renters Reform Bill, leading to shifts in demand and supply. In recent decades many family homes have been converted to student rental homes as the share of student-only households rose. While student households represent a relatively small proportion of the national total, a sea-change in demand or supply would have big impacts on some local home improvement markets.

Climate change

The changes we are experiencing in the climate with ever frequent and more concerning weather events will demand change in the housing stock. The UK’s commitment to meet net zero by 2050 will create increasing pressure to improve energy efficiency in the housing stock.

In its Sixth Carbon Budget in 2020, the Climate Change Committee recommended that to achieve net zero all buildings should achieve EPC C over the next 10 to 15 years. Currently just over half the English housing stock is rated EPC D or below, according to the English Housing Survey (2022-23), with the percentage in the private sector about 56%. In 2012 the proportion was above 80%.

While improving energy efficiency is critical, the increasingly hot climate will mean some homes will require adjustments to reduce overheating. Further, the case to reduce clean water use and reduce runoff from heavier rainfalls will grow, as will the case to reduce the impact of flooding.

All these requirements look set to grow and will demand significant alterations and improvements to British homes. This will inevitably reshape demand in the home improvement sector.

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