UK HOUSEHOLDERS SPEND 16.6 BILLION ON HOME MAINTENANCE IN 2008

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1 41/09 Saturday 4 th April 2009 This report is part of a series of research pieces published by the Lloyds Banking Group. Data on home maintenance has been drawn from the ONS publications Consumer Trends 2008 and the Family Spending Survey Households in the Family Spending Survey are a mixture of owner occupiers, council homes and privately rented properties the majority (70%) are owner occupiers. UK HOUSEHOLDERS SPEND 16.6 BILLION ON HOME MAINTENANCE IN 2008 Total spending by UK householders on home maintenance (both tradesmen and DIY) reached 16.6 billion in 2008, an increase of almost 2.5 billion, or 18%, in real terms 1 (i.e. after taking account of inflation) between 1998 and Average spending on home maintenance per household increased from 565 to 620 (also in real terms) during the period Increasingly UK householders are looking to undertake home maintenance themselves instead of paying for tradesman's services. Over the past decade total DIY spending by householders has increased by 42% in real terms, from 7.7 billion in 1998 to 10.9 billion in By contrast, spending on tradesmen fell by 11% in real terms, from 6.4 billion to 5.7 billion between 1998 and 2008 During 2008 total DIY spending by householders fell by 2% in real terms compared to 2007 reflecting the deterioration in the wider economy; overall spending on home maintenance fell by 4% The latest regional figures show that householders in the South West are the UK's biggest spenders on home maintenance, with an average outlay of 695 during 2006 and By comparison, householders in the West Midlands ( 410) and Wales ( 421) spent the least on home maintenance In the latest English Housing Conditions Survey (EHCS) 2007 published by the Communities and Local Government department, it is estimated that almost 1 million owner occupied properties are in need of essential repairs, such as on walls, roofs, windows and doors. In the EHCS report it is also estimated that 2.3 million home owners will need to improve on the thermal quality of their homes, that is spending on wall and loft insulation. Nitesh Patel, Economist at Lloyds TSB, commented: "Total spending on home maintenance has increased substantially over the past decade, though home owners are increasingly looking to undertake the work themselves instead of contracting to tradesmen. DIY spending fell in 2008 in line with the current difficult economic conditions. Such spending can be delayed during difficult times; however this can only be postponed for a limited time." 1 Annual spending figures rebased at 2003 prices.

2 KEY FACTS Trends in Home Maintenance spending Total spending on home maintenance (i.e. tradesmen and DIY) rose by almost 2.5 billion to 16.6 billion, an increase of 18% in real terms (i.e. after taking account of inflation) during the decade to Average spending on home maintenance per household increased by 10%, from 565 in 1998 to 620 in Over the past decade, total DIY spending by householders has increased by 42% in real terms, from 7.7 billion in 1998 to 10.9 billion in By comparison, spending on tradesmen has fallen by 11% in real terms, from 6.4 billion to 5.7 billion in the same period. Increasingly UK householders are looking to undertake home maintenance themselves instead of paying for tradesmen's services. For example, household spending on tools and equipment has risen by 126% in real terms between 1998 and 2008; that is an increase of 2.7 billion to 4.9 billion. By contrast, spending on tradesmen fell by 11% in real terms, from 6.4 billion to 5.7 billion between 1998 and In fact, householders are spending almost twice as much on DIY materials, tools and equipment than on hired tradesmen. In 1998, householders spent about 20% more in DIY goods than on contracted tradesman; by 2008 this figure had risen to 90%. In the latest English Housing Conditions Survey (EHCS) 2007 published by the Communities and Local Government department, it is estimated that almost 1 million owner occupied properties are in need of essential repairs, such as on walls, roofs, windows and doors. In the EHCS report it is also estimated that 2.3 million home owners will need to improve on the thermal quality of their homes, that is spending on wall and loft insulation. During 2008 total DIY spending by householders fell by 2% in real terms compared to 2007 reflecting the deterioration in the housing market and in the wider economy. Overall spending on home maintenance fell by 4%, with expenditure on tradesman down by 7%. home improvement for owner occupied properties tends to be for keeping the property habitable and maintain its value. Such spending can be delayed during difficult times; however this can only be postponed for a limited time. Regional Trends in home improvement spending Householders in the South West are the UK's biggest spenders on home maintenance, with an average outlay of 695 during 2006 and 2007; 174 above the UK average of 521, according to the latest available regional figures. The South West is followed closely by householders in the East of England who spent on average 693, Northern Ireland ( 647) and the South East ( 593) on making home maintenance.

3 Householders in the West Midlands ( 410), Wales ( 421) and East Midlands ( 426) spent the least on home maintenance during 2006 and home maintenance as a proportion of total spending on household goods and services was the highest in the South West (47%) followed by the East of England (43%) and Northern Ireland (40%). Notes to Editors: Sources and Definitions: In Table 1 UK figures are from the ONS publication, Consumer Trends, 2008 Quarter 4 published March The following ONS spending categories are included within DIY spending: Materials for maintenance and repair of the dwelling includes paints, wallpaper, plaster, tiles and small plumbing items. Major tools and equipment electric drills, power saws, hedge cutters, lawn mowers, chain saws and repairs of such. Small tools and minor accessories manual tools such as hammers, saws, screwdrivers, garden tools, lawn mowers, ladders, light bulbs etc. Trade services includes Services for maintenance and repair of the dwelling includes fees to plumbers, electricians, carpenters, glaziers, decorators etc. home maintenance includes both the expenditure on DIY products and tradesman's services. Regional figures in Table 2 are from the ONS publication, Family Spending Survey, 2008'. Figures relate to the average for 2006 and The 2007 English House Condition Survey addresses living conditions of residential properties in the UK. Covering several key policy areas is an assessment of housing conditions. This includes: housing stock decency housing stock and the Housing Health and Safety Rating System (HHSRS) vulnerable households in the private housing sector and non-decent homes children living in non-decent homes deprived districts and non-decent homes See

4 Table 1: Home Maintenance million (constant prices rebased on 2003 prices) Year Total Spending on Home Maintenan ce (DIY plus Trade Services) DIY Materials - DIY Spending on Tools and Equipmen t - Total DIY Spending - Trades Services - Ratio of DIY Spending to Trades Services ,066 5,506 2,167 7,673 6, ,271 5,715 2,435 8,150 6, ,354 5,478 2,590 8,068 6, ,015 6,110 2,856 8,966 6, ,958 6,413 3,238 9,651 6, ,204 6,720 3,589 10,309 5, ,717 7,812 4,136 11,948 5, ,086 7,161 4,293 11,454 5, ,726 6,141 4,611 10,752 5, ,237 6,282 4,837 11,119 6, ,559 5,986 4,886 10,872 5, % chang e % 8.7% 125.5% 41.7% -11.0% Source: ONS Consumer Trends 2008 Q4 Note: constant prices refer to spending figures adjusted to the 2003 price level, i.e. accounting for inflation. Table 2: Annual household spending 1 on home maintenance by region 2006 and 2007 Average annual expenditure on home maintenance for Region 2006 and 2007) (DIY plus trades services) s per household As % of total spending on household goods North East % North West % Yorkshire & the Humber % East Midlands % West Midlands % East % London % South East % South West % Wales % Scotland % Northern Ireland % UK %

5 Source: ONS Family Spending Survey 2008 Note: 1 Based on current prices, i.e. not adjusted for inflation This report is prepared from information that we believe is collated with care, however, it is only intended to highlight issues and it is not intended to be comprehensive. We reserve the right to vary our methodology and to edit or discontinue/withdraw this, or any other report. Any use of this report for an individual's own or third party commercial purposes is done entirely at the risk of the person making such use and solely the responsibility of the person or persons making such reliance.