In terms of regions, England accounted for 89% of ‘householder developments’ in 2013, up from 87% in 2009, with Scotland accounting for 6% and Wales 5%. The majority of householder planning decisions granted were for building extensions, with single and two storey accounting for around half of all projects undertaken.
Single storey extensions were estimated to account for around 37% of householder developments in 2013, while two storey extensions were estimated to account for around 13% of householder developments. Two storey extensions cover a variety of applications and incorporate a wide range of products including bedrooms, bathrooms, utility rooms, a garage etc., in addition to an extension of the living and kitchen areas.
“The nature of the extension can vary from the installation of a new kitchen and open plan living area to a simple utility room and downstairs cloakroom. In 2013, the vast majority incorporated a kitchen and living area” said Keith Taylor, Director of AMA Research. “The growth of the trend towards contemporary design has motivated consumers to create a clean and uncluttered look throughout much of their home. This has led to a demand for more open plan arrangements, particularly in existing homes where improvement and redesign is undertaken”.
Although the UK economy remains fragile, there is more optimism for a continued recovery in the construction industry and the housing market, along with improving consumer confidence & spending. Low interest rates and rising house prices are encouraging consumers to undertake larger scale home improvements, particularly as there have now been a number of years of deferral of product replacements and home improvements.
Into late 2014 and beyond, average UK house prices are forecast to rise by around 6% in 2014 and thereafter by between 4% and 5% to 2017 driven by the continued economic recovery and prospective rises in average earnings. Rising house prices in the longer term should provide underlying support for the home improvement market, particularly high value improvements such as building extensions.
However, the expectation that interest rates are eventually set to rise in 2015, will exacerbate affordability issues and slow house price growth to around 2-3% by 2018. Consequently, the level of building extensions is expected to achieve modest growth in the medium term, reflecting growing consumer confidence and spending and perhaps a return to the trend of carrying out improvements prior to placing properties on the market.
Affordability issues are the main barrier to growth as banks and building societies require more information regarding borrowers' finances in order to assess their income, outgoings along with potential interest rate increases, before making a decision on how much to lend. However, it is reasonable to assume that homeowners with good levels of equity and those considered low risk by lenders will continue to undertake improvements, which should provide underlying support for the market. In addition, overall residential RMI expenditure is expected to achieve a steady rate of growth in the medium term to reach around £28bn by 2018.
The ‘Home Extensions Market Report – GB 2014-2018 Analysis’ report is published by AMA Research, a leading provider of market research and consultancy services with over 25 years experience within the construction and home improvement markets. The report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.
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