Home Improvement in the United Kingdom

2021 DEVELOPMENTS

Booming house market drives up demand for home improvement

The housing market experienced a boom in 2021 leading to 1.5 million house moves (a 43% increase over 2020).

Creating home offices adds to furniture spend, but is also a visible driver of home improvement with demand for specific flooring and home paint

Lockdowns in 2020 and 2021 and continuing constraints on 2021 holidays and travel meant that funds previously apportioned to non-essential discretionary spending were diverted to home improvement projects, with savings boosting the affordability of in-home products and services. This had a visible impact in terms of demand in the first half of the year.

E-commerce growth accelerates in 2021 with long-term investments in fulfilment and delivery having a greater impact in second pandemic year

Total demand drivers for home improvement in 2021 exceeded the actual sales uplift experienced. The industry’s ability to service this inflated demand was constrained with non-essential retail closed for 14 weeks of the year, focused in Q1 and in relation to the emergence of the Alpha variant.

PROSPECTS AND OPPORTUNITIES

After a 2022 correction, ongoing pressures will create new novice DIYers, leading to solid growth over forecast period

The increase in “DIYers” as a result of waiting lists for DIFM services is expected to continue through 2022 as the 6-12 month waiting lists show no signs of declining, with services still being filled as fast as the industry can clear appointments. This means an increasing number of younger consumers unable to secure DIFM services in 2022 will try DIY for the first time, and if this conforms to data evident in 2021, up to 55% of these novices will continue to make their own home improvements, therefore adding to the industry’s total size.

One small cloud expected to impact 2022 is the predicted decline in property transactions

The UK housing market is expected to decline by 20% (Zoopla forecast) to 1.2 million house moves, with a direct impact on home improvement sales for 2022.

Limited need for new home offices following previous investments, driving early drop in sales

Product categories associated with implementing new home offices will take a more severe hit in 2022 before resuming pre-pandemic patterns. Now that home office penetration has saturated to the point of meeting the proportion of the workforce affected by remote working measures, a share of the offices that would historically have been created in 2022 will already have been installed the previous year.