Tuesday, July 31, 2018

Transport Infrastructure Construction and RMI Market - 5 Key Facts

  • As part of the Government's Roads Investment Strategy, Highways England will deliver 15 smart motorway projects providing 280 extra miles of capacity on England's roads.
  • In 2017, airport construction output climbed by 6% to reach an estimated £900m.
  • Sea ports and harbours construction was almost £200m lower in 2017 than in 2015.
  • In 2016-17, Network Rail spent 3.5% more than in 2015-16 on RMI.
  • In 2017, infrastructure accounted for 30% of non-housing contractors new work output.
These facts have been extracted from AMA Research's 'Transport Infrastructure Construction and RMI Market Report - UK 2017-2021 Analysis' available for purchase now.

Thursday, July 26, 2018

The Rise of the UK Build-To-Rent Market

The UK’s Private Rented Sector (PRS) is going through a period of rapid change. A recovering UK economy and increasing interest by both UK and overseas large institutional investors are key elements in the recent expansion of the PRS. Rising demand for professionally managed PRS accommodation has led to the emergence of large scale owners aiming to offer a bespoke, professionally run service to a large and growing market. Large institutional investors are now taking a larger share of the landlord market creating bigger schemes and driving supply.

The Build-To-Rent (BTR) sector has grown significantly in the last few years, in particular up to 2016, and the largest volume of BTR is coming through in urban city centres with London leading the way, but there is also significant activity in Birmingham, Manchester and Leeds. 
Growth in the BTR sector has remained strong and there are positive forecasts over the next few years through to 2022 in volume and value terms of around 4-6% each year, reflecting a combination of rising house prices, stagnant wages and tighter mortgage lending, a shifting demographic balance – the growth of the so-called 'Generation Rent', shifting behaviour amongst the younger age groups, population growth, net migration of mainly younger adults, workforce mobility and so on.
In the context of the national shortage of housing stock, the Government has increasingly looked to BTR specifically and the PRS more generally to play a greater role in providing more new build housing and has introduced funding - via the ‘Home Building Fund’ which comprises £2bn of infrastructure funding and £1bn of development finance for housing - to support the sector. The Government is also providing debt guarantees to encourage institutional investment in PRS and sees this route as helping to improve the quality of the sector and vital for enabling new housing units to be built.
As a result, a number of additional measures to make the sector more attractive have been introduced, including a reduction in the requirements to provide affordable housing in planning obligations, improving access to and affordability of land, and a stable regulatory framework in which to operate. That said, the planning system continues to present challenges to the viability and delivery of many PRS schemes.
Housing associations and local authorities have also increasingly been looking to the PRS as a means of alleviating local housing shortages and subsidising reductions in central Government grant funding.
“The PRS industry and the BTR sector have grown significantly in the last couple of years, and this growth looks set to continue in the medium term, with the rental market expected to expand by over 1m households over the next 3-4 years” said Keith Taylor, Director at AMA Research. “The trend towards increased private renting is expected to continue driven primarily by the younger ‘generation rent’ demographic, which is being targeted with appealing lifestyle-branded homes.”
While the PRS is dominated by smaller private landlords – around 75% of private rented dwellings by value are owned by private individuals - many institutional and large corporate investors are showing increasing interest and institutional investors are expected to substantially increase their investment in the BTR sector over the next few years.

The ‘Private Residential Rental Market Report - UK 2018-2022’ report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Monday, July 23, 2018

Bathroom Market - 5 Key Facts

  • The market for bathroom products is expected to see value growth of 12% by 2021.
  • Baths and sanitaryware were the largest sector of the bathroom products market with 37% share by value.
  • Imported products account for over 80% of the UK baths and sanitaryware market in value terms.
  • Bathroom taps are estimated to account for around 66% of the UK taps and mixers market by value in 2016.
  • Builders' merchants remain a prominent distribution channel in the bathroom products sector accounting for almost 50% of the market in 2016.
These facts have been extracted from AMA Research's 'Bathroom Market Report - UK 2017-2021 Analysis' available for purchase now. 

Wednesday, July 04, 2018

8% value growth in the UK bathroom and kitchen PODs sector

The UK market for bathroom and kitchen PODs market was estimated to have grown by 4% in 2017, in terms of the volume of POD installations. The market also saw an 8% increase in value, which can partly be attributed to higher prices for steel and GRP resin being passed on. There has also been some growth in demand for higher specification PODs in the luxury apartment and upmarket hotel sectors, which has contributed towards value growth.
Overall demand for PODs has been driven by a combination of factors; including demand for design standardisation and fast-track construction; ongoing key skills shortages; growth in the number of sites where there is restricted space; and increasing demand in the main end-user markets. The key sectors where PODs are used are; purpose-built student accommodation (PBSA), hotels and apartment blocks. Between them, these three sectors account for over 80% of installations, while the remainder of the market is split between hospitals, care homes, MoD accommodation and custodial buildings.
The largest area of demand for bathroom and kitchen PODs is in purpose-built student accommodation in medium-high rise steel and concrete mainframe buildings. In the hotel industry, clients will often specify offsite building methods to achieve fast turnarounds to enable occupation as quick as possible, and for many of the major hotel brands, a need for high levels of standardisation in design is also important. In the apartments sector, there has been extensive use of bathroom and kitchen PODs on both social housing and luxury, high-rise developments.
By value, PODs manufactured from either glass reinforced plastic or composite (GRP) account for the largest share of the market, closely followed by steel frame, while concrete and other materials, such as timber, account for lower shares. GRP PODs are mostly used in PBSA and budget hotel rooms, while in higher specification developments concrete or steel PODs are typically preferred.
Kitchen PODs account for less than 10% of the market, the core application being multi-occupancy residences such as purpose-built student accommodation, holiday resorts, military barracks and apartment blocks. Other areas of application include permanent and temporary use at hospital sites and as temporary stand-alone modules for large-scale events. 
Over the next five years, it is anticipated demand for PODs could grow steadily at a rate of 4-5% per year, there being reasonably strong construction pipelines in key end use sectors, although the uncertainty surrounding the Brexit negotiations may have some negative impact on demand. On the other hand, associated skills shortages may also lead to an increase in demand for offsite solutions and contribute towards growth in the PODs sector.
The urgent need for more affordable and rented housing in London and other major urban areas is expected to continue to drive demand for fast-build apartment blocks, while the hotel sector in London and other major cities should continue to provide impetus for growth in demand for bathroom PODs in the medium term, although a substantial proportion of schemes will be conversions.
Despite a high level of PBSA development in some cities, such as Leeds and Manchester, a relatively large proportion of student halls built in the 1960s/1970s are now reaching their end of life and in need of redevelopment. There also remains an ongoing shortage of high quality accommodation in many cities, suggesting there is still an urgent need for PBSA, and predicted strong future build levels in this sector should continue to drive demand for PODs.
The ‘Bathroom and Kitchen PODs Market Report – UK 2018-2022’ report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Online sales of plumbing products in the UK to increase by 43% by 2022

The internet is the fastest growing channel of the overall UK plumbing and heating products market and has experienced strong growth levels in the last 5-7 years. In 2017 alone, the UK internet plumbing market is estimated to have increased by 17% in value terms. However, forecasts indicate that the pace of growth is gradually slowing down over the course of the review period. This change of pace can be partly attributed to market saturation of internet users and fewer new suppliers entering the market.
Despite the current uncertain economic climate with the UK’s departure from the EU, the UK internet plumbing and heating distribution market has continued to grow. With strong demand driven by lower prices and added convenience, internet retailers have been able to capitalise on changing consumer cross-channel shopping habits with a notable shift towards online purchases. Own-label products sold on the internet are performing particularly well.
Shower controls and bathroom taps represent the largest sector of the internet plumbing market with a share of around 23%, followed by bathroom furniture and accessories, baths and sanitaryware, heating products such as boilers and standard radiators and shower enclosures, screens, trays and wetroom products. Towel warmers and decorative radiators account for a much smaller share of the total market.
Key factors that have influenced growth in this market over the past few years include the growing number of UK households with internet access – estimates indicate that around 90% of households have access in 2017 – and significant growth in the level of online e-retail sales over the past 7 years. The usage of mobile internet technology has also increased substantially, with a growing number of purchases being made through mobile handsets or tablets.
The majority of plumbing products sold on the internet are through specialist online plumbing retailers, of which around 65% are pure-play retailers that do not have a showroom and only trade online. Non-specialists account for around a quarter of the total internet plumbing market and include merchant/trade outlets, DIY multiples, marketplace websites such as Amazon and eBay, and other general retailers. Non-specialists also include plumbing manufacturers that may make specific products available for consumers to buy online.
“Factors such as improved delivery/collection options, the growing range of products available online, along with technological improvements should drive Internet sales of plumbing products.” said Hayley Thornley, Market Research Manager at AMA Research.
“By 2022, it is estimated that the UK internet plumbing market will have increased by around 43% compared to 2018. However, it is likely that the pace of growth will start to slow as this market matures.”
There is still scope for growth – there are still around 2.8 million UK households which do not have an internet connection, and the use of mobile internet technology is also likely to grow significantly. Although in the medium term, the number of UK households with internet access is likely to reach saturation, with the majority also likely to have a faster broadband connection, the trade/installer channel is less mature in terms of online purchasing and it is estimated that, despite growth slowing down, the market will continue to grow by 10-15% per year for the remainder of the forecast period.  
The ‘Internet Plumbing and Heating Market Report – UK 2018-2022’ report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.