Self Build Housing Market Report - UK Analysis

Transcription

1 Self Build Housing Market Report - UK Analysis Published: 07/04/2016 / Number of Pages: 83 / Price: Introduction and Overview The 6th edition of the'self Build Housing Market Report - UK Analysis' focuses on the structure, size and performance of the self build market in terms of volume completions and value, together with forecasts for the sector through to The report also provides a review of the key market influences and the main challenges facing the self build market at present. Key sections covered: Self/custom build housing market - market size by volume and value, historical and recent trends, sector shares, regional variations etc. Build options - timber frame, traditional brick & block and cost structures review. Supply structure - key players, kit suppliers etc. Product distribution - channel shares, review of; builders merchants, electrical wholesalers, specialist retailers, direct sell, internet, DIY and self build specialists. Forecasts - alternative growth scenarios and influence of recent government initiatives to encourage self build into the medium term. Key areas of insight include: Review of the self/custom build market over including market volumes, trends, overall market value, public & private sector involvement in self build, regional trends and variations, etc. Analysis of factors underpinning and limiting market growth - land availability, access to finance, recent planning and housing policy changes, and financial incentives to promote self build. Overview of self build costs in relation to land, labour, materials, plant hire, etc. Market prospects for and longer term trends up to 2020 with self build market completions with scenarios based on alternative views - current government housing targets and average growth predictions - realistic targets? Key suppliers - timber frame, distribution etc. Detailed market data and insight on the self build housing market by AMA Research, a leading UK provider of

2 construction market intelligence. Some of the companies included: Allwood Timber, Benfield ATT, Border Oak, Carpenter Oak and Woodland, CB Homes, Crown Oak Buildings, Design and Materials, Fleming Homes, Frame UK, Hamlet Buildings, Kingspan, Log & Cedar Self Build Homes, Maple Timber Frame, Neatwood Homes, Oakwrights, Potton Homes, Scandia Hus, Scotframe, Swedish House Company, Taylor Lane Timber Frame, The Timber Frame Company, Welsh Oak, Weststructure Timber Frame, Yorkshire Oak Frame. The Self Build Housing Market Overview of overall UK housebuilding market - starts and completions and forecasts to 2020, role of public and private sectors, regional housebuilding, materials mix and role played by self build sector. Review of the self / custom build housing sector - current estimates of market size, definitions, factors influencing definition, construction routes, role played by the public & private sectors, etc. Market size in value and volume terms and forecasts through to based on government targets and alternative forecasts scenarios. Underlying influencing factors in recent years - key positive and negative influencing factors including availability and price of land, access to finance, etc. Government policies - rise of self build up the political agenda - funding support, planning system changes, land allocation by councils, recent changes in 2015 etc. Current situation - factors and challenges influencing the market in , prospects for 2016 and outlook into the medium-term including planning issues, availability of land, community infrastructure levy, etc. Geographical variations in the UK self build market - proportion of self build completions for each region of the UK, regional self build costs. Self build costs - analysis of cost areas including, land, labour, materials, plant hire, miscellaneous costs, etc as well as review of elements of self build projects such as foundations, heating, electrics, etc. Specification / Purchasing Motivations and influences - Key Issues affecting motivation to self-build, processes and specifications, land availability, housing market performance. Self-build project - Overall value/share mix by key elements - land, materials, labour, services etc., volume of timber frame in self build, generic characteristics of a self-build project, key financing sources etc. Key specification issues - Key influences in specification. Analysis of major distribution channels in self build - builders/plumbers merchants, electrical wholesalers, DIY multiples, specialist, internet, others, etc. Key players by channel - shares, sector strengths and weaknesses etc. Future Prospects Market prospects in key drivers for and longer term prospects up to 2020.

3 Key growth sectors for self build assessed against government targets for future housebuilding and the role of self build. Forecast scenarios to 2020 Report Summary In , total housing completions in the UK were up 10% on the previous year, though the current level of completions is still 30% below the peak level of Self build completions, however, have declined in recent years and the UK continues to have one of the lowest rates of self building - around 10% of new private sector house-building, compared to countries such as Austria, Belgium, Italy and Sweden where self build rates are between 67-83%. However, volumes are more difficult to quantify as there are no official statistics on the annual number of self build homes. Product systems in the self build market are a mix of timber frame and traditional methods, with kits continuing to represent a significant share of the self build sector. The last couple of years have seen a great deal of activity in the self build sector through Government incentives and greater media exposure. Councils are actively trying to enable more self and custom build development, local community groups are progressing with neighbourhood plans and Community Right to Build projects, while the Government has also established its Right to Build scheme. The Government has also taken steps to raise the profile of self-build through a series of measures including easing constraints in the planning systems, cutting taxes for self build developments, providing a number of funds to assist individuals and communities to self build, and by releasing public land for self build projects. There is also increasing activity from developers, including some large housebuilders, to enable multi-unit self/custom build projects and a growing number of new entrants into the 'custom build developer' market. Despite these positive influences, self build completions are still below Government targets and a number of challenges still constrain growth in the sector. In 2011, as part of its Housing Strategy for England, the Government announced plans to double the output of self-build housing to provide an additional 100,000 self build units over the next decade to These forecasts are likely to be tempered by a number of key drivers including a general lack of consumer confidence due to the uncertain economy and wider housing market, a reluctance of behalf of lenders to make mortgage funding widely available, ongoing constraints in the planning system and ongoing difficulties surrounding the availability of land for self build projects - all longstanding but generally unresolved issues to date, though new measures are being introduced to alleviate some of these issues. Future growth in the self build market is likely to be underpinned in part by Government aims to drive forward change in the self build sector, which is now receiving more attention in the form of grant funding, tax reductions and an easing of land and planning constraints. The Government's Self-build and Custom Housebuilding Act, which gained Royal Assent in March 2015, will now require local planning authorities to establish local registers of custom builders who wish to acquire suitable land to build their own home. It also requires local authorities to give consideration to the demand on their local register when exercising planning functions. The Government's Housing and Planning Bill also includes several measures to facilitate self and custom build, including placing a duty on councils to allocate land. Our value estimates suggest steady forecasts, with self build values rising by around 5% in 2016, reflecting an expectation in a modest rise in self build volumes and material and labour costs. Thereafter, the self build market is expected to grow steadily by around 7-10% per annum to List of Report Contents Contents Listing 1. INTRODUCTION BACKGROUND SOURCES OF INFORMATION 7

4 2. SUMMARY AND FUTURE PROSPECTS SUMMARY FUTURE PROSPECTS ECONOMIC ENVIRONMENT GDP INFLATION & INTEREST RATES UNEMPLOYMENT HOUSEHOLD CONSUMPTION HOUSING & CONSTRUCTION STERLING POPULATION PROFILE CONCLUSIONS OVERALL HOUSEBUILDING MARKET TOTAL HOUSING STARTS AND COMPLETIONS PRIVATE AND PUBLIC SECTOR Private Sector Public Sector HOUSEBUILDING AND THE 2015 SPENDING REVIEW REGIONAL HOUSEBUILDING HOUSEBUILDING COMPLETIONS MIX HOUSEBUILDING BY TYPE OF MATERIAL General UK Housebuilding Sector Self Build Housing Sector SELF BUILD MARKET IN THE UK INTRODUCTION International Self Build Market 29

5 5.2 SELF-BUILD DEFINITIONS AND TERMINOLOGY Self Build Construction Routes Self Build Land/Property Sales Channels SIZE OF THE SELF-BUILD MARKET Overview Self-Build Volumes Value of Self-Build Market Key Driver for Future Growth CHALLENGES TO THE UK SELF BUILD MARKET Financial Issues Planning Issues Community Infrastructure Levy (CIL) Section 106 Agreements SELF BUILD - PRIVATE AND SOCIAL SECTORS UK SELF BUILD MARKET GEOGRAPHICAL VARIATIONS Self Build as a Proportion of New Build Housing Self Build Market % Share by Country Self-Build Market in England Regional Self Build Costs SELF-BUILD COSTS Overview Value of Individual Cost Sectors Self Build - Mix of Product Sectors MARKET INFLUENCES HOUSE PRICES AND HOUSING AFFORDABILITY Average Price of Building Plots 54

6 6.2 DISTRIBUTION AND MARKETING ENVIRONMENTAL PRODUCTS Government Policy Carbon Emissions Energy Consumption in the Domestic Sector RENEWABLE ENERGY PRODUCTS IN THE SELF BUILD SECTOR Heat Pumps Biomass Solar & Thermal Heating SELF-BUILD MARKET - DISTRIBUTION AND SUPPLY KEY PRODUCT SUPPLY AND DISTRIBUTION CHANNELS BUILDERS MERCHANTS ELECTRICAL WHOLESALERS DIY MULTIPLES SPECIALIST SUPPLIERS TO THE SELF-BUILD MARKET Timber Frame Kits Oak-Framed Housing Brick and Block Packages Suppliers of Other Self-Build Products 81 Tables & Charts CHART 1 UK MARKET SIZE AND FORECASTS FOR SELF BUILD HOUSING 2010 TO BY VALUE ( BN) 9 TABLE 2 GDP DATA 2012 TO KEY CONSTITUENT ELEMENTS 12 CHART 3 INTEREST RATES AND INFLATION (CPI) FROM 2000 TO CHART 4 PDI & SAVINGS RATIO AT CURRENT PRICES 2000 TO TABLE 5 EXCHANGE RATE FLUCTUATIONS 2011 TO STERLING TO THE DOLLAR, AND THE EURO, SPOT RATES 16

7 CHART 6 HOUSEBUILDING STARTS & COMPLETIONS AND FORECASTS (GB) BY VOLUME 18 TABLE 7 HOUSING COMPLETIONS (UK) 2010 TO BY VOLUME ('000 DWELLINGS) 19 CHART 8 TOTAL UK HOUSEBUILDING COMPLETIONS MIX BY REGION Q1-Q % BY VOLUME 21 CHART 9 ENGLAND HOUSEBUILDING COMPLETIONS MIX (HOUSES AND FLATS) % BY VOLUME 22 CHART 10 UK HOUSEBUILDING MARKET MIX BY MAIN METHOD OF CONSTRUCTION % BY VOLUME (MASONRY, TIMBER FRAME, OTHERS) 23 CHART 11 UK TIMBER FRAME HOUSEBUILDING COMPLETIONS 2005 TO BY VOLUME ('000) 24 CHART 12 UK TIMBER FRAME HOUSING ESTIMATED COMPLETIONS BY SECTOR % BY VOLUME (PRIVATE, SOCIAL, SELF BUILD) 25 TABLE 13 UK SELF BUILD MARKET - ADVANTAGES AND DISADVANTAGES OF MAIN CONSTRUCTION MATERIAL (TIMBER FRAME AND MASONRY) 27 CHART 14 SELF BUILD AS A % OF NEW BUILD HOUSING - INTERNATIONAL COMPARISONS 29 CHART 15 SELF BUILD LAND/PROPERTY SALES CHANNELS 32 CHART 16 UK SELF BUILD MARKET COMPLETIONS BY VOLUME ('000 DWELLINGS) (BASED ON 3 FORECAST SCENARIOS) 34 TABLE 17 UK MARKET FOR SELF-BUILD HOUSING 2010 TO 2020 BY VALUE ( BN) 36 CHART 18 MIX OF PRIVATE AND SOCIAL SELF-BUILD MARKET BY VOLUME CHART 19 SELF BUILD SHARE OF TOTAL PRIVATE SECTOR HOUSING MARKET UK BY COUNTRY (ENGLAND, SCOTLAND, WALES AND N.I.) % BY VOLUME 44 CHART 20 NEW SELF BUILD PLOTS AVAILABLE IN THE UK % SHARE BY COUNTRY 45 CHART 21 SHARE COMPARISON OF HOUSEHOLDS AND SELF BUILD HOUSING BY COUNTRY % BY VOLUME 46 CHART 22 SHARE OF NEW SELF BUILD HOUSING BY ENGLISH REGION - % BY VOLUME CHART 23 SELF-BUILD MARKET UK (ENGLAND, SCOTLAND, WALES AND NORTHERN IRELAND) COMPLETIONS BY VALUE ( BN) 48 TABLE 24 SELF-BUILD REGIONAL COSTS COMPARISONS (LAND & DEVELOPMENT) ENGLAND & WALES BY VALUE ( ) 49 CHART 25 MIX OF TOTAL SELF-BUILD MARKET BY COST SECTOR (LAND, MATERIALS, LABOUR, PLANT/FEES) % BY VALUE 50

8 TABLE 26 VALUE OF COST ELEMENTS IN THE SELF BUILD MARKET BY VALUE ( BN) 51 CHART 27 UK SELF BUILD MARKET KEY PRODUCT SECTORS % BY VALUE (FOUNDATIONS, HEATING & INSULATION, JOINERY/PLUMBING/ELECTRICS, PLASTERING/DECORATING, ROOF, KITCHENS/BATHROOMS ETC.) 52 TABLE 28 UK HOUSING AFFORDABILITY FACTORS (SIMPLE AVERAGE PRICE, MORTGAGE ADVANCE AND INCOME) 2008 TO BY VALUE ( ) 53 TABLE 29 AVERAGE RESIDENTIAL LAND VALUES ENGLAND & WALES BY REGION BY VALUE ( ) 54 TABLE 30 SELF BUILD - MARKETING EVENTS AND EXHIBITIONS TABLE 31 PASSIVHAUS AND ENERPHIT PERFORMANCE TARGETS FOR NEW AND RETROFIT HOMES 61 TABLE 32 NEW GENERATION TARIFFS (FIT) FOR SOLAR PV, WIND AND HYDRO (PENCE/KWH) 63 TABLE 33 TARIFFS FOR RENEWABLE HEAT INCENTIVE (RHI) SCHEME (PENCE/KWH) 64 TABLE 34 SELF BUILD MARKET ESTIMATED INSTALLATION OF GSHP AND ASHP BY VALUE ( M) AND VOLUME (NUMBER OF UNITS INSTALLED) 65 TABLE 35 ESTIMATED INSTALLATION OF BIOMASS HEATING SYSTEMS IN THE UK SELF BUILD MARKET 2010 TO BY VOLUME (NUMBER OF INSTALLATIONS) 66 CHART 36 DISTRIBUTION CHANNELS IN THE SELF-BUILD MARKET 68 CHART 37 DISTRIBUTION CHANNELS FOR MATERIALS INTO SELF BUILD MARKET - SHARE BY CHANNEL 2015 (BUILDERS MERCHANTS, SPECIALISTS, INTERNET/DIRECT, OTHERS) 69 CHART 38 MERCHANTS' MARKET SHARES CHART 39 ELECTRICAL WHOLESALE MARKET SHARES % BY VALUE 72 CHART 40 DIY MULTIPLES MARKET SHARE CHART 41 DIY MULTIPLES SALES BY PRODUCT SECTOR % BY VALUE 74 TABLE 42 COMPARISON OF MATERIALS SUPPLIED BY TYPICAL TIMBER FRAME PACKAGE AND TYPICAL SELF BUILDER 75 CHART 43 SHARE OF TIMBER FRAME MANUFACTURERS TO THE HOUSEBUILDING SECTORS CHART 44 TIMBER FRAME SUPPLIER MARKET SHARES TO THE SELF BUILD SECTOR % BY VALUE 77

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