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The Home Improvement Index 2024

In 2021-22 households spent £60 billion on repair, maintenance, and improvement (RMI) of the housing stock*. Three quarters was spent on alterations and improvements and about £40 billion of the overall RMI work was contracted out.

This doesn’t include billions of pounds spent by a multitude of private landlords who rent out more than 20% of the homes not owned by housing associations of councils.

This huge investment in existing private housing supports builders, builders’ merchants, materials suppliers, architects, and an array of other professionals spread across the regions and nations of Britain.

Meanwhile, the backlog of improvements needed to reconfigure Britain’s aged housing stock to meet climate change and an ageing population is huge. Add in an unpredictable economic and political backdrop and the businesses delivering the improvements we need face a market in flux clouded by uncertainty.

The Home Improvement Index aims to bring some clarity by monitoring the shifts and twists in the market.

*ONS, Family spending in the UK: April 2021 to March 2022

After the unprecedented spike in home improvement activity sparked by the pandemic the number of applications has fallen rapidly. In 2023 the number recorded was the lowest since 2013.

Planning applications for home improvement work

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If the applications are adjusted for the increase in the private housing stock, they would be the lowest since 2012.

After the enthusiasm for home improvement prompted by the pandemic, there are now growing signs that the cost-of-living crisis is bearing down heavily on the sector.

On the upside, rising fuel prices have encouraged home owners into action. While home improvement applications overall fell 27% from a peak in 2021, the number including solar panels has doubled. In 2023 there were two and a half times as many as in 2019. Applications that cite insulation have also shot up. They stand one and a half times higher than in 2019 and 60% up since 2021.

All the signs are that the demand for home improvement work is experiencing a major transition with both short-term and long-term influences reshaping the market.

Short-term trends

The build-up of excess savings from reduced spending on holidays and entertainment and the sense of being caged during lockdown generated a surge in home improvement in 2021. That exuberance in the market has now yielded to the downward pressures created by a cost-of-living crisis and a desire to cut energy bills.

The effect has been a hefty decline in applications for home improvement and a switch in the mix of work being undertaken.

The current cocktail of influences on the market has not only led to significant shifts in the type and amount of improvement work being carried out, but it has also reshaped where work is taking place and the sorts of households most likely to invest in their homes.

The sharp fall in applications is starkly illustrated in the chart below. The clear implication is that work in the home improvement sector must be falling, and this is the view of most analysts in the sector.

Confusingly, this view is in sharp contrast to the official (ONS) data for private housing repair, maintenance, and improvement (RMI), as the chart also suggests. But the Barbour ABI data does appear to support deep and growing concerns among industry analysts that the official data is out of step with what is happening on the ground.

Home improvements applications and private housing RMI GB monthly figures and 12-month moving average

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The chart shows how applications for home improvement have been falling since hitting the 2021 peak. Yet, according to the ONS figures, private sector housing RMI has continued to rise. Data from builders’ merchants who supply most of the materials used for home improvement have suggested for many months that workloads in the sector have been falling. The Builders Merchants Building Index that measures sales suggests that the volume of sales in 2023 were 13.7% lower than in 2022 when adjusting the revenue from sales for inflation.

The upshot is that there are huge challenges ahead for those working within the home improvement sector, not least dealing with falling demand. However, there are also opportunities as the shape of the workload mix changes.

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.

Our deep dive into the longer-term trends focuses on:

  • Household spending patterns
  • Household composition
  • Climate change 

Drivers of home improvement

Multiple factors influence where home improvement occurs and when. Constant among these factors is the state of the economy and changes to household income.

But there are unexpected drivers too, such as the pandemic causing a surge in home working and a huge increase in investment in garden works.

The overall influence of each of these factors shifts over time, changing where growth occurs and what types of home improvement are on the up or heading down.

Currently there are signs that the economy, and in particular the cost-of-living crisis is depressing much home improvement work. But the flip side is that households are increasingly eager to take the edge off steeper energy costs. This has produced a big upswing in applications for solar panels and the citing of “insulation” in home improvement applications.

These factors have been explored in more detail in previous editions of the Home Improvement report. But it is worth recapping on the key drivers to provide context as we examine the latest data. Click below to find out more:

  • Economic factors
  • Household and personal characteristics
  • Location characteristics
  • Moving home
  • Planning regulations
  • Energy efficiency
  • House prices
  • Move or improve?

A regional overview

Any lingering hopes that the post-pandemic appetite for home improvement might be sustained appear to be dashed across Britain. The number of planning applications for improving homes fell sharply again across all regions in 2023.

The regions that saw the biggest drop last year were Wales (-16.8%) and the North West (-14.1%) (see chart 1). But it is perhaps wiser to see how far each region has dropped since 2019, before the impact of the pandemic. As chart 2 shows, Wales remains the worst performer, down 13.2%, with the North East not far behind with a fall of 12.1%. Interestingly London, despite not feeling the squeeze as much last year, has seen the third biggest fall in activity since 2019.

There has been a swift transition over the past year or so in the motivations for home improvement among households. From a pandemic-prompted eagerness to invest in improving outside space or a home office we have seen households increasingly driven by the cost-of-living crisis. This sees them investing a bigger share of spending on improvements that will cut household bills, particularly energy bills.

This shift in emphasis is likely to mean that households in less financially stressed wealthier regions and districts will account for a bigger share of the overall home improvement investment in Britain. The signs are already there with London’s beacon for the wealthy, Kensington & Chelsea, seeing home improvement applications rise sharply in 2023, although the level is still far from the dizzying heights seen a decade ago.

Change in number of applications 2022 to 2023

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LN: London
SC: Scotland
WM: West Midlands
SW: South West
SE: South East
EM: East Midlands
NE: North East
YH: Yorkshire & the Humber
EE: East of England
NW: North West
WA: Wales
GB: Great Britain
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Change in number of applications 2019 to 2023

No Data Found

WM: West Midlands
EM: East Midlands
SW: South West
EE: East of England
YH: Yorkshire & the Humber
SC: Scotland
SE: South East
NW: North West
LN: London
NE: North East
WA: Wales
GB: Great Britain
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Chart 3, meanwhile, provides an overview across broad regions of Britian of home improvement activity between 2012 and 2023. It shows how across the East and South East and across Wales and the South West there were fewer home improvement applications per 1,000 homes in 2023 than in 2012.

With economic uncertainty and a financial squeeze on households still evident, any revival is likely to be weighted towards more affluent areas within each region and each local authority.

Home improvement applications per 1,000 private homes by broad regions 2012 to 2023

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Closer detail of comparing the performance of each region between 2018 and 2023 for can be seen in the table below

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The Data is Not Available

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The rankings are based on the number of home improvement applications, as defined by Barbour ABI (see methodology), per 1,000 private homes.

Methodology and caveats

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Explaining the queries with the ONS data:

The strength of using the Barbour ABI data in this debate is that it shows a very strong correlation with the ONS data up to the peak, but a negative correlation after. Many leading analysts suggest that the ONS data initially understated the impact of inflation in its conversion of value of work to volume of work. This would overstate the volume. Now there are concerns over what statisticians and social scientists might call survivorship bias. It may be that the losses of many local builders are not accounted for within the ONS data in a timely fashion when it is scaling its sample. Losses of firms do present a challenge as the records of their demise often lags significantly after the firm goes bust. This would mean that they are in effect scaling up the sample too much. It may also be that within the sample the respondents who are successfully trading are responding and that those who may have suspended trading are not. This may also be a challenge for other related surveys such as that provided by the Federation of Master Builders, which until recently has recorded increased activity.

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