What drives homeowners’ enthusiasm for renovations, extensions and improvements?
Some have argued that a buoyant economy and general confidence in the housing market are the underlying motives – but the case does not appear entirely convincing or one that is shared across the whole of the UK.
Shaped by the economy
In an article on the 16th of April, for example, the website Real Homes pointed to the declining number of home improvement applications submitted in London and argued that a lack of confidence in the housing market and the uncertainties of Brexit have led to a wait-and-see attitude by homeowners.
Yet similar factors shaping the housing market and the same uncertainties about Brexit exist throughout the UK’s regions and there are places where home improvement planning applications are in fact increasing.
Real Homes cites the evidence from planning applications in the northwest of England and in Wales, where these have increased by 5% and 3% respectively
Other factors shaping home improvement trends
Construction industry analysts Barbour ABI have considered a range of factors which may be driving the incidence of home improvements
While recognising that applications are likely to increase during times of relative economic growth (because more people have more disposable income), the following indicators may also give a clue to home improvement trends:
- where land values are higher, the enthusiasm for improvements, renovations and extensions on a home tends to be greater;
- where house prices are rising faster than the cost of renovation work, so there is a greater incentive for home improvements;
- there is a link between the number of house sales in a region and the incidence of home improvements – vendors might want to improve their homes to make them more attractive for sale and buyers might want to renovate the property before moving in;
- Barbour ABI notes that in the past few years, however, there are areas where there appears to have been a faster rise in home improvement, maintenance and repair, than in property transactions;
- there is a natural tendency for home improvement to be driven by higher household incomes – and the access to greater disposable income;
- 20% of the higher earning households spend approximately 13 times more on home improvements than the poorest 20%;
Age of the household
- linked to the question of household income is a generational indicator;
- those in the 50-64 age group are likely to spend more on home improvements, extensions and renovations – members of the so-called baby boomer generation with relatively greater disposable incomes.
If there is no clear or single link between the economy in general and the trend in home improvements, there is one resounding connection between home improvement, renovation and maintenance and the need for renovation insurance.
Here at UKinsuranceNET we often receive enquiries about the need for renovation insurance from property owners and have therefore published a number of frequently asked questions on the subject.
These make it clear that, unless you are proposing little more than a quick spruce-up and lick of paint, the need for specialist renovation insurance may need to be made a priority before you embark on any home improvement project.