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The Launch of The 2024 Home Improvement Report

by Barbour ABI Content Team

On day 1 of this year’s InstallerSHOW, Consultant Analyst and Editor, Brian Green took to the stage to present the exclusive launch of The Barbour ABI Home Improvement Report.

Brian was joined by the CEO of the National Home Improvement Council UK, Anna Scothern, as well as Market Insight and Strategy Director for STARK Building Materials UK, Nick Snazell, and host, Rachel England, at the Housing Hub on the 25th of June.

The 2024 Home Improvement Report was introduced by Brian as an exploration of where the sector has been, where it is now, and where it’s going. From a slowdown in activity in 2019, to a pandemic-prompted surge, and finally to a downturn driven by the cost-of-living crisis, the home improvement sector has been on a roller-coaster ride over the past five years. The volume of planning applications had a significant rise of 20% in 2021, but is now lower than what it was 2012/2013.

Whilst this highlights some doom and gloom within the sector, there’s still a lot of good news.

How the cost-of-living and energy crises are influencing home improvement

The cost-of-living crisis is leaving many consumers with little room in their budgets for home improvement. However, the also-ongoing energy bills crisis is presenting an attractive opportunity for those who have the money available to make energy-efficient investments in their homes. Solar panel and insulation planning applications are up threefold. The consumer is signalling their need to take energy insecurity into their own hands by investing in this type of home improvement.

Brian then explored topics that the industry must watch in order to understand what’s driving home improvement. From household characteristics, planning regulation changes, to energy efficiency being major drivers, he condensed these topics of focus into what he called ‘The Three D’s.’

Demographics

Age demographic is critical in understanding who in the country is spending the most, and what projects they’re interested in. Brian highlighted that the older generation is spending a lot more on home improvement than the younger generation due to the wealth they have. 50% of home improvement is financed by top 20% of earners which tend to be people over 65.

Decarbonisation

Prompted by the cost-of-living crisis and energy crisis, people are choosing energy saving products to have installed in the home.

Digitalisation

Since the pandemic people are still working from home now more than ever. This continued need for home offices and working spaces can no longer be considered a fad that isn’t expected to disappear any time soon.

Anna followed Brian’s analysis by encouraging business owners to take data from resources like The 2024 Home Improvement Report which explores energy efficiency and decarbonisation and use it to make crucial strategic decisions. Installers should be looking at getting the qualifications to install products such as heat pumps and electric charging points.

She mentions however, that the industry is simply not ready or prepared for these trends. Installers need to use their time wisely to digest data and have their businesses primed to take advantage of the Three Ds driving the sector. Preparing now will be crucial for those wish to be ahead of the game later.

“Now is the opportunity for smart business owners to ask themselves, ‘How can I upskill? How do I go about offering these services to my customers?”

Referring back to the data within the Home Improvement Report, Anna stressed that the regional pages are pivotal in highlighting your target areas and the number of applications so businesses can understand what skills and resources are needed to meet demand.

“If you want your business to be viable in the next 10 years, you need this knowledge.”

Nick Snazell then added that from his perspective, it’s about serving the wider trends. He referred back to the importance of decarbonisation and noted the differences he is seeing between urban and rural residences

Rural areas are where we’re seeing the highest installation of energy efficient products. These consumers are likely using more natural resources and fall into the older age demographic that Brian has referenced. They are also more likely to be living in self-built homes 

Installers building trust within the home improvement sector

Good, reliable home improvement sector installers are always going to be competing with what are known as ‘cowboy’ installers. As these 2 types of industry professionals will always exist, Anna encouraged the audience not to compete with the ‘cowboys’.

It’s going to be vital for professionals to speak to their customers and prospects to provide transparency as well as up-to-date information when it comes to renewable energy products and heat pump installations. Providing good knowledge and data will be a significant factor when it comes to standing out against the other businesses.

Building trust around completion dates is also a vital point. Again, this is especially true for the older demographic that Brian referenced earlier. According to Brian and Anna, older home improvers highly value transparency on project duration. These people are likely to pay a premium for services with secure timeframes

Challenges and future targets for sustainable home installations in new builds

The installation of advanced systems like heat pumps, solar panels, and EV charging stations remains a massive issue in new builds, given the future home standards. Volume house builders are currently taking advantage of older regulations, which means it will be a few years before we see homes with these improved installations. The Labour party has set a target of 300,000 units per year, and there is a push to encourage homeowners to adopt these technologies. However, there are currently only 10,000 to 20,000 installers for the 200,000 installations needed annually. The heat pump target is particularly ambitious at 600,000 units, a significant increase from the current figure of around 30,000.

Q&A on the home improvement sector

The host, Rachel England invited the audience to ask question to the panellists.

Q: How do the panellists feel about green finance helping the less wealthy to afford decarbonized home improvement?

Anna: Financing has a huge role to play in the sector now that there’s less disposable income due to the cost-of-living crisis. When it comes to green financing, banks are going to be more likely to lend money for the investment of decarbonized products because they’ll have their own target to fund these types of projects.

Brian: What’s going to be interesting with a possible new government is their new incentives towards these types of products. I can’t imagine they wouldn’t risk being seen as not wanting to support green or decarbonized products. They’re going to be keen to go in this same direction, but when will this start rolling?

Nick: It’s going to take a lot to change the homeowner’s mentality on green improvements. The pool of those who are already on board and making changes is very small.

Q: How fragile is consumer confidence? And how much has the stomach does the market have for significant change?

Anna: The appetite for change and consumer confidence is low and that’s why trust is so important and installer relationships with their customers is absolutely crucial

Nick: It is fragile. We’re going to see a lull in confidence due to the election but as base rates drop, hopefully confidence will rise.

Brian: Consumer confidence is a massive determinant within home improvement activity. But there has to be trust in order to invest. It’s important to remember that people see these improvements as investment, not just installations.

The 2024 Home Improvement Report

The report is free to download here and covers everything from regional analysis, short and longer-term trends, market drivers, and more.

About the author

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Barbour ABI Content Team

The Barbour ABI content team is a part of the Marketing department and they strive to produce engaging, relevant content to keep you up to date with the latest construction industry insight.

At Barbour ABI we're revolutionising the way we deliver content to the construction industry. From blog posts to reports, we're want to deliver the key information that you need at a pace that allows you to quickly digest and continue with your busy work day.

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