Will Falling House Prices Lead To A Slowdown In Home Improvements?

2 minute read

With further rises in interest rates likely and house prices moving in the opposite direction, Alan Davies, Commercial Director, Glassolutions considers the impact of inflationary pressures on the home improvement sector.

On paper at least, the summer hasn’t been particularly kind to the home improvement market. UK inflation has continued to sit at historically high levels. Despite the unexpected drop seen in in June of 7.9%, analysts predicted that inflation will sit well above the 2% Bank of England target rate for much of 2024.

And if inflation isn’t going to fall anytime soon, the latest figures from mortgage lenders Nationwide and Halifax, suggest that house prices are. According to the latter, this was as much as 2.6% year-on-year in June, the biggest decline since June 2011.

However, behind the headlines things may not be quite as bleak as they first appear. Although house prices are down significantly year-on-year, month-on-month, they were up according to the Halifax by 0.1 percent, suggesting a dogged resilience, if not underlying stability in the housing market.

So where does that leave the home improvement sector in the run in to the end of the year and the start of 2024?

What should glass processors, fit out and home improvement specialist expect in the second half of 2023?

“Increasingly high interest rates are putting pressure on businesses and ordinary people and that’s restricting the ability of homeowners to spend”, says Alan Davies, Commercial Director, Glassolutions.

“That’s coming on the back of a period of very high demand during the pandemic. That creates a perception that the market is perhaps falling away, and our customers are definitely feeling a sense of pressure.

“Those more challenging trading conditions are going to be with us for a little while to come, so we’re committed to doing whatever we can to support our customers in navigating them.”

New Capacity To Process Glass

Glassolutions model brings maximum flexibility to glass, processed glass, cut-to-size and IGU supply. This includes major investment in its in-house processing capability, which gives it the capacity to toughen and process glass in-house, including cut-to-size laminates.

“Balustrading glass used to only really exist in the commercial space”, Alan explains. “That’s now changed so you have balustrading glass going into a wide range of applications around the home – on people’s landings, stairways, gardens.

“What we’ve done is to increase our stock-holding but also build on our processing capability to make sure that we can support our customers in meeting that increased demand.”

No need to buy complete packs and more flexibility in delivery

Glassolutions has also brought increased flexibility to its stock glass offer supplying single sheets to glass processors, rather than forcing them to purchase whole packs, as well as cut-to-size sheets, for smaller processors who don’t have their own gantry cranes.

With its nationwide distribution network of 6 sites, plus fleet of Hiab delivery vehicles, Alan says that the flexibility Glassolutions offers lowers operational costs for its customers. This he argues assumes critical importance during a period of more challenging trading conditions.

“It’s very tempting in a challenging market to focus on price or value engineer projects – but we don’t believe that’s the right way to go”, he says.

“We have our model and we’re going to continue to invest, focussing on service and customer support, so that our customers get the products that they need to win business but also the service which supports them in delivering it effectively.”

An Expanding Product Portfolio

Glassolutions is also investing in lowering its environmental impact, recycling more product and working to lower its carbon emissions.

This approached is evidenced in Glassolutions product strategy. It includes the addition of Miralite Pure, a lead and solvent-free mirror, it’s made from 30% recycled glass and uses water-based rather than chemical solvents in its manufacture.

Available in Clear, Bronze, Grey and Green tints, it also comes in highly versatile Miralite Antique and Miralite Versaille ranges.

“Mirror is a growth product for us but being able to push a sustainability message with it moves things into a different space”, Alan says.

“Sustainability is also driving a wider shift in expectations of glass performance, so we’re seeing increased sales of Planitherm One, alongside Planitherm Total+, reflecting a new focus on u-values and demand for higher performance IGUs as well as solar control.”

This includes COOL-LITE SKN, Saint-Gobain’s premium residential offer. It’s designed to offer an optimum balance between a high light transmission and low g-value of 0.39.

“It’s made specifically for IGUs and has its origin in the commercial space but we’re now seeing demand crossover into the premium residential space”, Alan adds.

He continues: “We’re restructuring our stockholding to reflect shifting demand and to lower the lead time to our customers right across our national distribution network, improving our service to them during a transitional period from the inflated demand we saw during the pandemic to a normalisation of the market.”

Making Every Lead Count

“We have a unique offer”, Alan continues, “it’s as big, if not bigger than anyone else’s, with national coverage but local delivery right across the UK.

“The key thing is that we listen to our customers, it’s not about saying ‘we sell this’. We sit down with them and ask what they need and then work to deliver it from the product that we stock to the processes that we carry out and right down to the type of vehicles that we use to deliver it.

“Glassolutions is the complete offer. We supply processed glass, IGUs, stock glass and cut-to-size. It’s a complete service offer to anyone in glass processing, interior design, home improvement.

“That flexibility is going to be increasingly important running through towards the end of this year and into next because spending is going to be tighter and everybody is going to need to make every lead and business win count.”

glassolutions

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