Inclusive Bathroom and Kitchen Products Market - 5 Key Facts

• The market has grown by almost 50% in value terms since 2012. 
• Belgium and the Netherlands account for 85% of the UK’s brick imports by value.
• Bricks accounted for a 29% share of the total market in 2017 after growth of around 8% from 2015.
• Investment in capacity has continued, with brick production rising to its highest level for a decade in March-May 2017. 
• The precast concrete structural building products sector was worth around £770m in 2017.

These facts have been extracted from AMA Research's 'Inclusive Bathroom and Kitchen Products Market Report - UK 2018-2022' available for purchase now. 

Bricks, Blocks and Precast Concrete Products Market - 5 Key Facts

• The market has grown by almost 50% in value terms since 2012. 
• Belgium and the Netherlands account for 85% of the UK’s brick imports by value.
• Bricks accounted for a 29% share of the total market in 2017 after growth of around 8% from 2015.
• Investment in capacity has continued, with brick production rising to its highest level for a decade in March-May 2017. 
• The precast concrete structural building products sector was worth around £770m in 2017.

These facts have been extracted from AMA Research's 'Bricks, Blocks and Precast Concrete Products Market Report – UK 2018-2022' available for purchase now. 

Downturn in department store sector and increasing price competition likely to impact upper sectors of household textiles market.

Having experienced overall growth of 13% between 2013 and 2017, the UK household textiles market has been underpinned by returning consumer confidence and sustained demand from contract applications. The outlook for 2018 is for a slowing in annual growth rate to around 1-2% reflecting growing pressures on consumer spending and fierce price competition which is constraining overall value growth, despite rising import prices. Both mature and highly competitive with high household penetration levels, the market remains highly dependent upon replacement sales, in domestic and contract end-use sectors.

The household textiles market is now clearly positioned within the wider fashionable homewares market, with greater co-ordination of colours across items to create a particular style. This is exemplified by entry to the homewares market of clothing and fashion brands which also appeal to a younger demographic, creating additional sales opportunities. Additionally, ‘breathability’, ‘climate control’, ‘hypoallergenic’ and ‘anti-allergy’ have all become mainstream choices for filled products such as pillows and duvets.

The product mix for household textiles is dominated by bedlinen, followed by filled products, bathroom textiles and table linen/kitchen towelling. Given the maturity of the market, the share mix for the products has shown little change over the review period. Import penetration rates have also remained high with both India and Pakistan having grown share of key product sectors between 2015 and 2017. The contract sector also represents a steady stream of sales opportunities for all household textiles products, specifically hospitality and healthcare, with growth in the care homes sector. Market value has however been affected by competitive pricing.

The supply chain remains highly fragmented although there has been some consolidation over the past few years with larger companies gradually expanding their portfolio of products. In addition, the distribution pattern for household textiles is continuing to evolve with greater use of “omni-channel” approach by leading channels within the domestic sector as well as the increasing penetration of the “discounters” into the household textiles market. However, the upper sectors of the market are likely to be impacted by the extremely challenging conditions currently facing the department store sectors, with both sales volumes and values affected by the programme of store closures by leading organisations

Jane Tarver of AMA Research said:

“Future prospects for the household textiles market remain cautiously optimistic. The market is forecast to grow by around 6% 2018 and 2022, underpinned by sustained demand but with fierce price competition remaining a key characteristic. New UK trade deals are expected to be forged and operational by the end of the forecast period, thereby positively impacting upon UK consumer confidence, economic recovery and in turn the purchase of household textiles. Our forecast does however remain cautiously optimistic given the complex range of issues involved”

The degree of imports is expected to remain high across all sub-sectors and is therefore subject to fluctuations in exchange rates and raw material prices. However, UK suppliers may seek to maintain higher stock levels, in order to reduce lead times. Some may also seek to become more vertically integrated, taking processes in house, in order to combat rising import and overseas labour costs. The channels within the domestic distribution mix will also continue to evolve, based on the consumer perceptions of the convenience of ordering and delivery options. Coupled with the challenging conditions for key organisations in the upper market sectors, domestic distribution is likely to see a move to a more “omni-channel” approach with market volume increasing focused on the lower-mid market sectors.

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

Garden Products Distribution Market - 5 Key Facts

• The market for garden products has grown by 16% between 2013 and 2017.
• The Horticuture sector accounted for the largest proportion of sales, representing 23% of market value in 2017.
• The DIY sector accounts for the majority of sales of garden products (31%), reflecting their diverse product range.
• The Garden Centre sector is estimated to be worth £2 billion at RSP, allowing for recent price increase, due to the rising cost of imports.
• Social media is expected to play a greater part in marketing activity across the various channels, with a view to building loyalty and to drive traffic in-store.

These facts have been extracted from AMA Research's 'Garden Products Distribution Market Report - UK 2018-2022' available for purchase now. 

Construction in the Higher Education and Student Accommodation Sector - 5 Key Facts

• Current forecasts are for a substantial increase in capital investment, at over £17.1bn this is around 60% higher than the previous 4-year average.
• In 2013, the private sector formed around 39% of supply, but in 2016 this increased to over 46%.
• Only 18% of students are currently catered for in university-operated halls.
• London is the most undersupplied area in the student property market.
• The outlook for investment in higher education facilities and student accommodation remains positive, as student numbers expected to increase and demand is rising for higher specification facilities.

These facts have been extracted from AMA Research's 'Construction in the Higher Education and Student Accommodation Sector Report - UK 2018-2022' available for purchase now. 

Contract Floorcoverings Market - 5 Key Facts

• Contract floorcoverings sales have grown steadily by 12% over the last 4 years.
• The contract sector currently accounts for around 50% of the total floorcoverings market.
• Sales of contract vinyl floorcoverings are estimated to have increased by 7% between 2015 and 2017.
• Modular flooring, such as carpet tiles and LVT products, are becoming an increasingly prominent feature of the market.
• Commercial buildings, including offices, are the largest end use sector, accounting for 24% of the market.

These facts have been extracted from AMA Research's 'Contract Floorcoverings Market Report - UK 2018-2022' available for purchase now. 

Plumbers’ merchants market in the UK worth over £4.2bn

The plumbers’ merchants market was worth an estimated £4.2bn in 2017, representing growth of around 2% from 2016. The overall trend in recent years has been positive, and early indications for 2018 are for a continuation of the modest recovery experienced from Q3 2017 onwards, although there is still a degree of restructuring activity, as major players adapt to changing conditions and slowing growth in some key end use sectors.

Although the plumbers’ merchants market has experienced 5 years of growth since construction output recovered in 2013, there has been considerable variation in the rates of growth between the various end use sectors. Sectors that have been strong include housebuilding, while residential RMI activity, a significant sector for plumbing & heating materials, has been more modest. Some non-domestic sectors, such as infrastructure have remained positive, but in the education, commercial offices and healthcare sectors there was an overall fall in output in 2017.

Expectations are for more modest annual rates of growth to 2022, for both new construction and non-residential RMI. Skills shortages remain critical and are a major concern in the plumbing and heating sector, with the skills gap said to be one of the biggest threats facing the UK’s plumbing industry.

The plumbers merchants’ market, which comprises national, regional and local merchants, is dominated by four major merchant organisations, which together account for an estimated 65-70% share, in value terms. These firms operate via a number of subsidiaries, each supplying a range of plumbing and building products.

The main competitors for the merchants are the home improvement retail and specialist outlets, as well as manufacturers and suppliers that deal direct with the construction trade. There has been strong competition from alternative suppliers, particularly online companies, retail outlets and DIY multiples, which is being driven by a shift in customer buying behaviour, with online shopping via PCs and laptops - as well as via mobile phones and tablets - becoming increasingly popular among tradespeople.

Some of the major nationals have responded to recent challenges in the plumbing and heating sector by restructuring and streamlining their operations, which has led to a number of branch closures, as well as the opening of new, more efficient outlets, enhancement of online and/or multi-channel offerings and a stronger focus on digital technologies. This focus on e-commerce has helped to offset some of the shift to internet-only distributors.

Prospects for plumbers’ merchants are relatively positive, although current political uncertainties surrounding the UK’s exit from the EU and the consequences in terms of trade, business investment and the availability of skilled labour are already affecting growth, and will continue to do so in the short to medium term. While construction activity and output levels will continue to increase, the rate of growth is expected to fall and remain relatively modest to the end of the forecast period.

A stronger focus on energy efficiency and water saving will continue to drive growth in the plumbing and heating sector, providing new opportunities for merchants, and a growing number of merchants have already expanded their ranges to include renewable energy and sustainable heating products as well as water saving solutions. Ongoing changes to building regulations will also boost demand for higher specification products.

The 'Plumbers Merchants Market Report - UK 2018-2022' report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Facilities Management Outsourcing - Central and Local Government Sector - 5 Key Facts

• In 2017, Facilities Management outsourcing in the central and local government market was estimated to be worth over £4.3bn.
• Social housing accounts for 45% of market value.
• The total running cost of the central government mandated estate in 2015/16 was estimated at over £2.5bn.
• The housing associations' stock has generally been rising over the last few years, increasing 6% between 2012 and 2016.
• The UK FM market is fragmented in nature, with the leading 5 operators only accounting for an estimated 35% of market value.

These facts have been extracted from AMA Research's 'Facilities Management Outsourcing – Central and Local Government Sector Report – UK 2017-2021 Analysis' available for purchase now. 

Modest growth forecasts for passive fire protection products in the UK

The UK market for passive fire protection products is estimated to be worth around £650m at manufacturers selling prices - excluding installation. The market has grown by around 2% in 2017, with forecasts for 2018 at a similar level. This follows good growth between 2013 and 2015, which represented a period of recovery for the overall construction industry, especially in the education, offices, retail and leisure sectors. The forecasts indicate a more subdued performance, with lower levels of construction activity anticipated as investor confidence has fallen, in the lead up to Brexit.

In terms of structure, the passive fire protection market is comprised of fire resistant doors, fittings and intumescent seals, cables, partitions and suspended ceilings, glass, structural protection and ductwork and damper systems. Fire resistant doors, fitting and seals account for the largest shares of the market, with around 60% of the total value.

Recent product innovations in the sector include; intumescent coatings with faster drying times, electronic fire door closers that are linked to fire alarm systems, and more flexible fire stopping pipe collars that allow a greater range of applications compared to conventional collars.

Key drivers, such as the regulatory aspects of the fire protection sector, are expected to remain unchanged in the short term, since the Hackitt Review into the Grenfell Tower disaster only covered high-rise buildings and provided no recommendations for immediate change in the technical aspects of Building Regulations. However, modifications are expected in the medium to longer term, and AMA Research also anticipates that there will be other implications for the wider industry, as manufacturers and specifiers alike seek to provide safer environments, possibly leading to positive growth by value.

Forecasts for the passive fire protection market in the medium-term are for modest growth in 2018 and 2019, with slightly higher growth levels by 2020. While the longer-term impact of Brexit remains unclear, investors are likely to remain cautious, and this has resulted in recent forecasts being less optimistic for overall construction sector output growth.

In the short term, activity in the non-domestic construction sector is likely to slow down, with more subdued growth of around 1-2% 2018-19. The overall market for passive fire protection products such as cable, glass, ceilings, partitions and doors, is dependent on the performance of key construction sectors, such as offices, industrial, entertainment, health and education.

In terms of output, new office construction is forecast to be less positive over 2018-22, following strong output growth of 70% between 2013 and 2017, something which may impact on demand in sectors such as structural fire protection, suspended ceilings and partitions.

However, the hotel and entertainment sector has shown good growth in recent years and is attracting substantial investment, especially in the budget sector. The university sector has also been positive in terms of new orders in 2018, with future output having the potential to be boosted by demand for new accommodation and facilities for additional students following the removal of the cap on student numbers.

Uncertainty regarding Brexit is expected to have less of an impact on residential construction, where the outlook remains modestly positive, driven in particular by the ongoing imbalance between demand and supply for new housing. Increasing numbers of new flats and apartments built will be the primary source of demand for passive protection in the residential sector.

Other factors influencing the market include the performance of Sterling against both the US dollar and the Euro. Since the 2016 Referendum, Sterling’s fall in value and continued relative weakness has meant that materials price inflation has become a key influence in the UK construction market. If this situation continues, it will prompt some value growth in the passive fire protection sector, since a wide range of materials and products is imported.

The 'Passive Fire Protection Market Report- UK 2018-2022' report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Door and Window Fittings Market - 5 Key Facts

• The market for door and window fittings is estimated to have grown by 11% since 2013 but remains significantly below the pre-recession peak.
• Locks and latches represent the largest product sector, accounting for around 30% of market share.
• Low cost imports continue to limit value growth in some sectors, with imports of door and window fittings up 16% between 2013 and 2016.
• The residential sector accounts for over 60% of market value.
• In 2017 we estimate that the share of ironmongery distributed through door and window fabricators has increased to over 40%.

These facts have been extracted from AMA Research's 'Door and Window Fittings Market Report - UK 2018-2022' available for purchase now. 

29% growth in the UK generator hire market since 2014

The market for diesel generator hire, which according to AMA’s definition excludes ancillary products, has performed well in recent years, having experienced growth of 29% from 2014. Over this period, the market has benefitted from increasing demand across most many application areas including construction, events, infrastructure and industrial. Other drivers include rising power demand in several sectors, such as events and industrial, as well as ‘critical’ applications requiring more secure back-up support.

The generator hire market is part of the larger construction equipment rental market that includes products typically hired out by plant and tool hire companies, such as earth moving, lifting, pumping, road-making, power and tools. It is estimated that the generator hire market accounts for only around 2% of the overall construction equipment rental market.

Opportunities in the generator hire market range from very large and infrequent situations to very small & recurring events. High value, one off sources of demand include major entertainment events and natural disasters; whilst other application areas include temporary construction usage and the need for power while a company’s own equipment is repaired.

Construction is a key end-use sector, and accounts for around one third of the market. Generators are required in a number of applications, such as for powering site cabins and welfare facilities, as well as powering pumps, lighting, crushing plant, tower cranes and tools & equipment etc. Generators are often one of the first pieces of equipment to arrive on site and the last to leave.

The industrial sector is the largest non-construction sector and the second largest overall, with demand driven by sectors such as manufacturing, refining & processing, recycling & waste, and data centres. Infrastructure and events are also important sectors for generator hire, each accounting for a significant share of the market. Further demand comes from the public sector as well other sectors including extractive, agriculture, commercial, retail and landscaping.

By volume, generators with a rating of 21-350kVA hold the largest share and account for close to half of the market, with generators up to 20 kVA having the second largest share at around a third of the market. The former are typically used in construction and events as well as in small offices, industrial units or hospital departments.

In terms of distribution, the market continues to be dominated by large, national multi-branch organisations that have expanded through a combination of organic growth and acquisition. In addition, a wider range of outlets including builders’ merchants, DIY multiples and garden stores now offer a hire service. Generator hire is also offered by both plant hire and tool hire companies, with the former focusing on larger generators with a higher generator rating and the latter focusing on smaller generators, typically up to around 20-25 kVA. Specialists can offer generators with a wider range of power ratings, up to around 2,000 kVA.

Prospects for the generator hire market into the medium-term remain relatively optimistic with the market forecast to experience annual growth rates of 4-5% following a slightly smaller increase of 2% in 2018. Going forward, construction sectors likely to be the main drivers of growth in the next 3-4 years are housing, infrastructure and entertainment & leisure.

The effect of the ‘Brexit’ negotiations on levels of confidence and investment remains the biggest risk factor to business confidence, which, if it falls further will have a direct effect on project starts. Additionally, any slowdown in non-construction activities, such as manufacturing or events, will negatively impact market value.

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

Paint, Wallcoverings and Woodcare Market - 5 Key Facts

• UK market for paint mix by end use sector indicates a reduced share taken by the home improvement multiples of over 50%.
• Water based paints continue to increase share and solvent-based paints now account for less than one fifth of the retail sector.
• The importance of countries such as Germany and the Netherlands continues as these countries accounting for over 40% of imports.
• Paint continues to dominate the sector accounting for almost two thirds of the market.
• Garden applications dominates the end-use application mix for woodcare products.

These facts have been extracted from AMA Research's 'Paint, Wallcoverings and Woodcare Market Report - UK 2018-2022' available for purchase now. 

UK plant hire market forecast to grow by 11% between 2018 and 2022

The UK plant hire market was estimated to be worth £3bn in 2017, with growth of around 1% forecast for 2018. The plant hire market is extremely diverse, with equipment ranging from dehumidifiers to excavators, and demand for each type of equipment varies, reflecting a combination of factors including the level of new work and RMI in sectors such as highways and distribution & warehousing. Demand in sectors such as pumping and climate control is also impacted by the prevalent weather conditions.

The market experienced modest growth up to 2013 but increased significantly in 2014 due to improvements in both housing and non-residential building markets, as well as manufacturing and other non-construction end-use sectors. Since then, the plant hire market has remained positive, though growth has been at a lower level. Infrastructure remains the key end-use sector, although different parts of the infrastructure sector have performed differently in recent years. Plant hire is a highly competitive market and as such hire rates have been affected, remaining relatively static in recent years.

Earth-moving equipment and lifting equipment together are estimated to account for over two thirds of the plant hire market by value. The earth moving equipment hire market is traditionally cyclical, with demand influenced by levels of the non-residential construction, housebuilding, construction associated industries such as quarrying, and some non-construction activities including waste management. Earth moving equipment is one of the first sectors to benefit from construction project starts, and prospects for the sector are positive with growth forecast to 2022. Hire demand the lifting sector has also remained relatively strong.

“The performance of the plant hire market is highly dependent on the performance of the overall construction market” said Jane Tarver of AMA Research “Individual hire company’s experiences tend to vary in terms of product sectors and regional & geographical trends, with companies in the South East, for example, seeing higher demand from the housebuilding sector than those in the North of England, Scotland, etc.”

Prospects for this sector remain positive, although in common with many sectors of the hire market, there are likely to be regional variations in performance. Overall, the market is forecast to experience modest growth in 2018, benefiting from the HS2 project which is due to be started in the Autumn. From 2018 onwards, construction sub-sectors forecast to increase output and provide opportunities for growth include infrastructure, entertainment & leisure, industrial and health as well as housebuilding.

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

Facilities Management Outsourcing - Health and Education Sector - 5 Key Facts

• The market value for outsourced integrated services and TFM in health and education is expected to grow by 17% through to 2022.
• The penetration of bundled and TFM outsourcing within healthcare is estimated at around 25%, with outsourcing generally higher for 'soft' services.
• The Primary education market accounts for 52% of services costs in the education market.
• Building maintenance and improvement accounts for a significant portion of FM expenditure in education, representing 25-30% of the overall market.
• Bundled services in the Mental Health & Learning Trusts represent 20% of the total service provision.

These facts have been extracted from AMA Research's 'Facilities Management Outsourcing – Health and Education Sector Report - UK 2018-2022' available for purchase now. 

4% growth in the UK market for street furniture

The total value of the street furniture market that is supplied to or influenced by local authorities and placed in public spaces or highways controlled by local authorities, is estimated to be worth around £328m in 2017, having grown by around 4% in the year. The local authority sector is thought to account for around 80% of the total market for street furniture. Forecasts indicate some growth over the 2018-2022 period, though growth rates are likely to be modest due to increasing pressures on budgets.

Street furniture can include a wide range of products, but the main product sectors can be considered to be; benches & seats, bins, bollards and barriers, planters, posts and rails, cycle stands and signage, including street name plates. Some street furniture products are more susceptible to the state of the economy than others - for example, damaged bollards and litter bins will need to be replaced, whereas plans for newbuild development and regeneration schemes using more expensive seating, planters and other optional etc. can be amended.

It is estimated that there are around 500-600 companies supplying street furniture, some of which manufacture branded products in the UK, while some manufacture for others without having a high profile with end-users. However, a substantial volume of products – usually at the lower end of the market - are imported into the UK from China and other countries.

Many companies specialise in only one or two products, or one type of material, such as stainless steel or timber. There is also a growing market for bespoke street furniture products, where the manufacturer is involved with the architect or specifier at an early stage of the project in order to produce a unique design for a particular location.

The future prospects for this market are for growth, though at a low level of around 1-2% per year between 2019 and 2022.

Keith Taylor, Director at AMA Research, said: “With grants from Central Government to Local Authorities falling, urban landscaping may be regarded as a lower priority for spending compared to social services and other costs and therefore likely to be under continual pressure for funding. In addition, maintenance budgets for street furniture may be limited because of high demand from other areas of highway maintenance expenditure, such as filling pot holes and converting street lighting to LEDs.”

However, demand for improving the urban environment is strong, with safety a key driver influencing decision-making, and increasing demand for certain types of street furniture, for example related to cycling.

Growth in the new housing market, in particular for larger-scale developments for affordable housing or private rental, should also benefit the overall street furniture market. There are schemes coming forward in many parts of the country to support the government’s aim to build more houses, including social housing. Despite the vote to leave the EU casting doubt on the future of the UK housing market, the overall outlook for residential construction remains positive, with modest growth over the next five years.

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

Hotel, leisure and entertainment construction output grew by 33% in 2017 to reach £9.4bn

Dominated by the private sector, the entertainment and leisure sector has experienced more positive construction output conditions than many other sectors over the past 5 years. Despite a dip in 2015, output growth in the sector has remained between 2013 and 2017, and overall indications are that output grew by around 33% in 2017 to reach £9.4bn. Expansion and investment has been largely confined to the budget hotels, health and fitness and more recently the cinema segments, with less buoyant activity in other sectors.

Going forward, there is a good pipeline of leisure sector work forecast, with a mix of theme park, resort, hotel and sports stadia in the pipeline, which should underpin construction growth over the forecast period. In addition, there are also a number of projects currently proposed or under discussion for the refurbishment and redevelopment of a number of sporting venues/stadia, with the larger projects likely to make a significant contribution to entertainment output into the medium-term.

The hotel sector will provide significant impetus for output growth with into the medium-term with the budget hotel sector a key driver of investment activity. The current erosion of the Pound Sterling against other currencies is making the UK an attractive holiday resort, and underpinning investment in hotels and restaurants, whilst the health and fitness sector should also continue to underpin output growth with the budget gym sector continuing to grow. 

However, there are sub-sectors within entertainment that are likely to do less well into the medium-term. The public house estate is facing issues of increased rents and falling turnover, and in addition, the betting and gaming sub-sector has also been affected by the move to online games and virtual casinos.

Overall, sector output is forecast to see good overall growth to 2022, albeit at lower growth rates of between 3% and 5% when output is forecast to be around £10.9bn; however, the diversity of the sector means that growth prospects vary considerably between sub-sectors, with recent growth in the budget and high-end hotel and budget gym and restaurant sectors helping to offset the decline in the pubs and clubs sectors.

Many new construction projects in the hotel and leisure sectors relate to re-fit or refurbishment as hoteliers and leisure facility owners focus investment in their portfolios through refits, re-branding and refurbishment programmes, rather than newbuild, and as such there remain opportunities for refurbishment and re-branding for the larger hotel and leisure operators.

Keith Taylor, Director at AMA Research said:

“There is no doubt that the hotel, leisure and entertainment construction sectors have performed very well in 2016 and 2017 compared to many other sectors. However, the 33% increase indicated by the construction output figures was partly caused by a revision of both historical and current ONS figures, and for 2018 we are likely to see more realistic figures for output growth”  

The ‘Construction in the Hotel, Entertainment and Leisure Sector Report - UK 2018-2022' report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.

Build to Rent forecast to become a key growth area in the UK housebuilding market

Including residential conversions, there were around 258,000 new dwellings delivered across the UK in 2016/17, up by 13% on the previous year. For 2017/18, it is estimated the rate of growth has been similar, with 280,000 new homes being added. Average selling prices have also been increasing year on year over the same period, contributing towards strong growth in total housebuilding contractors output, which nearly doubled between 2011/12 and 2017/18, though forecast growth to 2021 is more modest.

Volume growth has largely been driven by increasing activity levels in the private housing sector, underpinned by a combination of low interest rates, competitive mortgage deals and especially the Help to Buy equity loan scheme.

The key reason for this strong growth in value has been a marked shift away from 1-3 bedroom flats towards higher value 4+ bedroom detached and semi-detached homes, particularly across London, the South East and East of England. London has also been where demand for flats /apartments has also remained strongest. As with commercial properties, the luxury apartment sector has been a key area of investment for overseas investors, though following the EU Referendum result, confidence among foreign investors in the UK has been wavering.

However, most other regions of the UK have also been affected by price increases, albeit to a lesser degree. While interest rates remain on the lower side, mortgage deals are likely to remain competitive although interest rate rises could easily reverse growth in the market. Affordability will therefore continue to be a key factor in sustaining demand, with the extension of Help to Buy equity loans in England through to 2021 expected to underpin demand for private sector new housing.

In contrast to the private housing sector, public sector housing completions have remained below Government targets, despite significant growth in demand for affordable homes. The main reason for this has been cuts to public sector funding, with the amounts available to housing associations and local authorities having resulted in falling investment in social housing schemes. However, with more housing associations now diversifying into affordable homes construction, there should be more of a balance between demand and supply over the longer term.

“What has been critical to growth in net additions to the UK’s housing stock has been sharp growth in the numbers of conversions, which has been driven by government’s granting of permitted development rights for the conversion of empty offices into dwellings. Although there will inevitably soon be a shortage of empty offices suitable for conversion, we expect there to be a shift towards conversions of vacant High Street facilities” said Keith Taylor, Director of AMA Research. “There has also been a recent relaxation of permitted rights concerning barns and stable conversions, which should contribute towards growth in the total number of conversions over the next few years”.

Taking these factors into consideration, we would expect the combination of completions and conversions to drive further growth in total completions and market values, to over 300,000 and over £42bn by 2021. Market prospects beyond 2019 will largely depend on levels of confidence among both consumers and business within the context of ‘Brexit’, the uncertainty of which leads to some degree of procrastination on the part of investors at this stage.

Purpose-built private rented housing (Build To Rent) is forecast to become one of the key areas of growth within the housebuilding industry. As well as attracting some of the larger housing associations an increasing number of larger private housebuilding groups are also diversifying into this sector, usually in partnership with private investors. To achieve desired rates of return, the focus of their investment is on large-scale apartment developments - in key parts of London, the West Midlands and the North West – which offer economies of scale. As with PBSA, this is mainly being achieved through the increased specification of prefabricated building components and even full offsite building systems such as volumetric modular construction.

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

Housing deficit and skills shortages lead to sustained growth in the panelised modular building systems market

The UK market for panelised modular building systems has performed relatively strongly over the past 3 years or so, and is estimated to have grown by 26% between 2014 and 2017. The main product type is timber frame building systems, which is competing with light gauge steel, precast concrete and other engineered wood-based panels, including structural insulated panels (SIPS) and cross laminated timber (CLT) systems. Estimates for 2018 onwards are for 4% growth per year, until 2020. 

AMA Research’s definition of the market consists of pre-fabricated, 2-dimensional frames or panels in systems for constructing walls, partitions, roofs and floors, typically supplied to site as systems in flat-pack format.

Until 2016, the market for panelised modular building systems had seen steady demand resulting from improving conditions in the overall construction market, particularly in the residential sector, and the market has benefitted from an improved performance in some key end use sectors, including education, entertainment, leisure and offices, though more recently, the UK construction market has been less positive.

Several trends have been driving the market for panelised modular building systems. The drive towards sustainable development, coupled with the need to meet energy efficiency and carbon reduction targets, would seem to weigh in favour of offsite construction. Panelised modular buildings also generate less waste, typically have superior airtightness, and hence thermal insulation performance, than brick and block construction.

In terms of product mix, timber frame systems still constitute the largest sector of the panelised building systems market with a share estimated to be around 70%, largely due to a larger supply base and extensive usage in the Scottish housebuilding market as well as the self-build sector. By value, the timber frame market alone was worth over double the three other smaller sub-sectors combined, with light steel frame the largest of the three smaller sub-sectors.

The market has also benefitted from rapid development of timber engineering, which has resulted in many high-performance engineered timber products coming onto the market, including the likes of cross laminated timber panels and glue laminated timber products. Further growth in these product options may well further stimulate the overall panelised systems market.

Key end use sectors for panelised modular building systems are private and social housing, apartment blocks, schools, hotels, healthcare and care facilities and purpose-built student accommodation. Residential applications account for around 65–75% of the overall market, reflecting the predominance of timber frame in the building of both private and social housing.

“Over the next few years to 2022, there are several factors that will underpin a steady growth in this sector, probably over and above that forecast across the overall construction industry. These include an increasing use of Building Information Modelling, and an increasing number of public sector procurement frameworks” said Keith Taylor, Director of AMA Research.

“More importantly there is now a strong likelihood of an increase in the use of volumetric and other types of offsite construction method to help meet the chronic housing shortage and cope with the lack of traditional construction skills within the construction industry.”

The ‘Panelised Modular Building Systems Market Report – UK 2018-2022’ report is available now and can be ordered online at www.amaresearch.co.uk or by calling 01242 235724.