I was told this earlier on Monday by a potential new customer: “we were going to move, but we’ve decided to stay where we are and extend”. I reckon I’ve heard that, or something similar to that at least once a week every week this year. Not since the Great Recession have I seen or heard this strength in the staying put trend.
There’s nothing scientific I have to hand, but on an anecdotal basis, I am pretty sure that the “improve, don’t move” trend is growing live and well this year so far. For the glazing industry, this should be a very good thing indeed.
Improving the homestead
The last time I heard from this many home owners that they were staying put and improving where they already were was during the Great Recession nearly ten years ago. Back then, the financial crisis hit everyone and everything in the world almost. Back home, the mortgage market ground to a halt, credit facilities dried up, the recession nearly turned into depression. It was a bit of a hairy moment.
It resulted in people staying put. No moving house. No new mortgages. What we then saw, as the dust began to settle, was a high number of home owners deciding to use the money they were saving for moving house used on home improvement products instead, including windows and doors. A useful micro-trend that no doubt kept a few installers and indeed fabricators afloat where a great many went to the wall.
The circumstances this time round however are a little less dicey, despite Brexit. There is no recession, there has been a bit of a cooling, but we are many moons away from the conditions of the Great Recession. The mortgage market remains active, although cooling in London and the South East a bit. Credit markets remain fluid. The business conditions are much more positive than around ten years ago. So what is the reason behind the rise in the staying put trend?
Well, house price growth is slowing, the mortgage market is OK, not great but OK, and loans are still readily available at very low interest rates. I would put it down to a lack of supply. There is a whole generation of young people stuck at home unable to buy their first home either because of a lack of supply in their area, or prices being too high. That alone can slow a housing market right down, which is what I believe we are seeing.
If you work in the mortgage or finance market, it might not be brisk business at the moment. If you’re in the window industry however, I think this presents us with a golden opportunity.
If you read the business news you will know that even though there is a wage squeeze going on right now, people are still spending in decent amounts, on day to day goods and big ticket items. There remains good underlying confidence despite some bumps in the road.
As I mentioned above, more people appear to be deciding to stay where they are and spending on their current home instead. For the home improvement market, including UK fenestration, this presents us with a golden opportunity to exploit these current conditions.
It is fair to say it is likely there is are a large number of home owners sitting on piles of cash earmarked for new house purchases but are still sitting on that money. Or are living in homes that are paid for, without debt, with those home owners having much more spending power. It is this demographic that the window industry should be marketing very strongly to.
We should be looking at this as a great chance amid a backdrop of growing risks both at home and abroad. Right now the conditions for buying windows and doors are pretty good for home owners the way I see it, even if we have had a raft of price increases in the past 12 months. There is a glut of people deciding to stay at home and plunder their cash on improving it. How much of an open goal for us as an industry could this be?
It may not last all that long however. Maybe 12 months, 18 months max. At the moment inflation continues to rise faster than wages, which means less and less disposable income for people as the months go by. Brexit is only just getting under way, and the global outlook is still shaky in places. I think that this is more a window (sorry) than a long term trend. We don’t really know what the next couple of years will bring, so it is important to make the most of what opportunities come our way.
As an industry we should be taking to all media platforms and juicing this particular opportunity for what it is worth. Time to make hay while the sun shines, even if it the height of British summer time.
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