How The Cost Of Living Crisis Could Impact The Home Improvement Industry

Kelly Edwards of Kelly Edwards Interior writes about how the cost of living crisis could affect the home improvement sector. 

Almost 90% of adults in the UK have reported a rise in their living costs, with food bills to petrol and everything in between going up. Inflation has really packed a punch, leaving many in the country (and around the world) struggling to make ends meet. But what does this mean for the home improvement industry? 

We’ve looked into how the cost of living crisis is impacting people’s ability to renovate their properties. Let’s get into it.

Property Sales Are Down

You can’t ignore the real estate market when thinking about home improvements. In particular, we can learn a lot by looking at how many properties are selling compared to previous periods.

One of the main reasons for this is the cost of living crisis. People either don’t have the money right now or do have it but are too worried to spend it. Almost half of all homeowners believe that inflation has affected their ability to buy property, bringing the market to a (almost) standstill.

Whether people are buying property or not can directly influence the home improvement industry. Usually, if people aren’t moving home, they’re spending more money on improving their own space. The only current statistics we have are from the US, where the real estate market is closely following that of the UK, and around half of homeowners would rather refurbish than move. But, is this the same in our country? Let’s take a closer look.

Is the Cost of Living Crisis Scaring Renovators?

There’s no doubt that Brits are scared to spend money at the moment. Although we expect UK homeowners would rather renovate than move, there are still hesitations to renovate. In one survey, around 45% of people reported that inflation has affected how able they are to carry out home improvements, with price concerns being the main issue.

Tradespeople Are Putting Up Their Costs

Not only is the cost of living crisis tightening the purse strings of potential renovators, but it’s also pushing up the price to renovate. That’s a double-whammy of bad news. In 2021, almost 90% of tradespeople said their costs had increased, with over 90% saying they’ll go up in 2022, as well.

These costs get put on the customer to keep the business afloat, which means that most renovations are going to be pricier than they were just a few years ago. But, with less inclination to move home, higher costs could be less of an issue. If people are expecting to stay in their properties for at least another few years, spending money on renovations becomes more of a priority regardless of their budget.

People Still Renovated Despite Rising Costs

If we want some more insight into how this year’s cost of living crisis will affect the home improvement industry, we only have to look to last year - 2021. Although inflation was lower, prices were still increasing, and the general consumer was concerned.

Despite this, home improvements soared, with many tradespeople describing it as the busiest business year they’d ever experienced. It was so busy, in fact, that demand for tradespeople often outnumbered availability! If the economy last year actually pushed more people to renovate, what’s to say the same won’t happen this year?

How Many People Want to Renovate?

To better understand how the cost of living crisis is affecting renovations, we need to look at the start of 2022. At this point, the economy wasn’t fantastic, and a recession was on the cards, yet 41% of people still reported wanting to make changes to their property this year. 

A total of £40 billion was expected to be spent, and most tradespeople are expected to be very busy. Of course, now that inflation has peaked, homeowners could be feeling differently, though from what we’ve seen, it makes us more positive that home improvements will be going ahead.

The Impact on Home Renovation 

Anyone looking to renovate their home will likely be worried about debt. However, there are plenty of alternatives and the companies or services within the home improvement sector will have to pivot to ensure their products and services are reaching their target customers. 

Below are three trends that we should expect to see in home improvement as the cost of living crisis continues in the UK.

1) Creative Ways to Fund Home Renovation

For many homeowners who are over 55 and own their own home, equity release will be an attractive option to help finance home renovation projects that require a larger up-front investment. The equity being released is only repaid when a property is sold, meaning that homeowners will avoid any monthly repayments while the cost of living is at an all-time high.

2) A Rise in Secondhand Sourcing

Buying secondhand will be a focus for anyone working to tighter budgets. Along with the added benefits to the planet when adopting a reuse, recycle and reduce mindset, buying upcycled or recycled materials is a no-brainer for home renovators looking for a cheaper alternative. 

From reclaimed wooden flooring to antique decor, homeowners have the ability to source almost anything for their renovation secondhand and at a reduced price. Local contractors known for disassembling old buildings or facilitating a place to buy and sell leftover materials will likely experience an uptake in custom.

3) Do-it-Yourself Culture Boom Continues

Home improvement doesn’t always require a professional. Many tasks, such as plastering, painting, and wallpapering, will likely be done by homeowners themselves. 

With the DIY culture boom first seen in 2020, following the global pandemic and multiple lockdowns, renovators will be looking to save on labor costs. Taking advantage of the free online tutorials on YouTube, TikTok and blogs alike.

Final Words

The true impact of the cost of living crisis on the home improvement industry is yet to be realised. But, from what we’ve seen, there isn’t much to worry about. People are still happy to spend money improving their property, and with house sales down, it’s almost inevitable that renovations will go up. For now, though, we’ll just have to wait and see.

Source : Kelly Edwards

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