Is Increased Demand for Properties Raising the Prices of Home Renovations?

The price of everything is rising, and in the UK in particular, a cost of living crisis is raging. Of course, such price increases have to be passed down through all industries; after all, everyone has to pay the bills. New research carried out by contractor review website ratedpeople.com has found that demand for home renovations continues to grow… but what does this mean for prices?

Pandemic-induced demand

Since the start of the pandemic, homeowners the world over have been graced with a new-found appreciation for where they live – and this in turn has fuelled demand for home improvements and renovations. In 2021, a record 49% of UK residents made improvements to their home in one way or another, and overall demand for tradespeople increased by 32%. When compared to the figures at the beginning of 2020 (before the lockdown periods but just at the beginning of the pandemic), overall demand for home improvements and renovation has increased by 50%. In just two years, this is a quite increase!
However, there remains several challenges presented for those looking to renovate or redevelop their property, even as the pandemic’s impact lessens over time. Both the Covid-19 pandemic and Brexit have forced material supply issues, product cost increases and workforce shortages; all of which have knock-on effects to projects. Of course, those working in the renovation industry have had to persevere in order to maintain their workload, but this hasn’t been achieved easily.

Increasing costs…

89% of tradespeople declare that they experienced an increase in costs through 2021, 84% found material supply issues difficult and 44% had workforce shortages. When surveyed at the beginning of 2022, 91% of tradespeople expected their costs to rise again further over the year – and 82% believed that they’d need to increase their prices in order to weather the difference.
The price increases and ongoing market disruption in 2021 mean that there was a 15% increase in home improvement costs on average; with 3% of tradespeople pushing their prices up by 50% or more and 78% by up to 20%.

…set to rise further

By the end of 2022 it’s expected that the cost of some renovation projects could rise by 40%. Labour and materials for a bathroom redesign is expected to cost an average of £5,726 (22% higher year-on-year); kitchen renovations are expected to rise by 25%; and extension costs will set homeowners back by 23% more.
As far as tradespeople’s fees, these too are expected to rise significantly. 97% of builders, 97% of heating engineers, 89% of carpenters and 89% of plasterers all intend to increase their prices through 2022. While ideally it seemed as though most industry analysts believed these cost increases would finish at the end of 2022, the energy price rises seem to push this estimate back well into 2023.

Prolonged workforce shortages

The shortages in workforces across numerous sectors have made many homeowners struggle to hire the relevant tradespeople they need to complete their renovations. 45% of those seeking out a renovation said they hit difficulties in finding an appropriate contractor with availability in the time span they needed or had hoped for; no surprise given that 62% of tradespeople said 2021 was the busiest year they’d ever had!
A further 45% of homeowners experienced delays with renovation work they were having done and 43% found the disruption so impactful that they had to change their original plans because they were unable to obtain the materials or design elements they wanted.
Indeed, contractors agreed. 62% said they had no choice but to delay or cancel projects they had booked in. However, the situation does seem to be improving – with just 44% expecting to have to cancel or delay through 2022 and beyond.
The reasons behind workforce shortages were varied, including the need to isolate because of coronavirus, a lack of skilled workers being trained and made available, staff or subcontractors not wanting to work because of health and safety risks (namely, Covid-19), and a loss of staff members due to relocation out of the UK post-Brexit.

Changing demands

86% of tradespeople said at the beginning of 2022 that they were expecting a very busy year ahead, but the way in which homeowners are choosing to renovate seems to be shifting.
The renovations homeowners spent the most money on through the year thus far have been extensions, annexes, conservatory construction and building walls to separate out rooms; all developments that split and create new living space. Others on the high priority list include creating outdoor socialising spaces and the creation of home gyms and home bars.
With property prices continuing to rise even through the tumultuous conditions of the last few years, it should really come as no shock that people are choosing to extend up and out rather than up and move to a new home entirely.

How to avoid skyrocketing renovation costs

Refresh Renovations create bespoke teams of contractors for every property project, all overseen by a dedicated project manager to keep everyone on track, on time and to budget.
Utilising our professional network of tradespeople and contractors as well as our own strategic supply channels, Refresh are able to present customers with exactly who and what they need to get their property project done. This also negates the need for homeowners to have to do their own hiring and firing and scrabble around to find someone available – because we’ll always have someone to fit the bill.
Refresh have local offices all around the UK and elsewhere in the world, and a renovations expert for each will visit your home for a free visit with no obligation to scope out your works. Get in touch with yours to book in a consultation!
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