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22nd May 2018
A growing H&M construction market is emerging as more households are choosing to extend and renovate their homes as an alternative to moving, particularly in London.
The slowdown in the housing market and the rising cost of moving home – particularly the increases in stamp duty – have contributed to a falling level of housing transactions. But ONS figures for construction output point to a healthy level of domestic building project activity. Indeed, the value of private housing repair and maintenance (R&M) work rose at a faster rate than overall construction work in all but one of the years between 2012- 2017.
The out performance was particularly marked in 2017, when private housing R&M construction output rose by 10.9% on the previous year, compared to a smaller rise in all construction work of 5.7% and a fall in public housing R&M construction of 4.2%.
The positive trend in the sector seems to have been sustained in the opening months of 2018 with a fractional rise in private housing R&M in the first quarter of 2018 compared to a year earlier, despite bad weather and pressure on consumer spending.
A recent report from the insurance group Hiscox noted that the number of homeowners choosing to improve their homes rather than move, in the five years since 2013 has increased from 3% to 15% - equal to some 4 million households. The report also points to a 29% increase in the number of planning applications to councils over the past 10 years. In some of the UK’s renovation ‘hotspots’, roughly one in 30 households made a planning application last year.
The significant scale of tender opportunities in the sector is also highlighted in the report. It shows that house renovators typically have a budget of around £16,100 for each building project with almost a fifth of them planning to spend upwards of £25,000.
New bathrooms are the most popular areas for renovation, followed by kitchens, according to Hiscox. This chimes with a recent first quarter trading statement from Wickes’ parent company Travis Perkins which said that despite a weak UK DIY market, kitchen and bathroom showroom orders recovered in the first quarter of 2018, compared to the previous three months. Meanwhile, Hiscox says planning applications for loft extensions more than doubled between 2008 and 2017.
The Hiscox Renovations and Extensions Report 2018 also highlights some marked regional variations in renovation building projects by households. Areas where renovation is popular include Greater London, where 27% of households opted to renovate in 2017 rather than move, the West Midlands (18%), South East (14%) and North West and South West (13% each). By contrast, just 9% of households renovated in the East of England and 5% in the North East.
The growth in private housing building projects in London was also reflected in recent research from Resi.co.uk, an online architecture service, which identified various extension ‘hotspots’ in the capital, notably East Dulwich, Barking and Walthamstow. Ground floor rear extensions into the garden with larger kitchens as well as loft conversions were popular. Areas in other cities which are popular with young professionals in Liverpool, Manchester and Birmingham also showed more renovation building projects.
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