A positive start
It might be wet and miserable outside but I’m going to do my best to shake off the traditional January blues and start 2024 on a positive note – so here goes!
There are two stories that caught my eye in the newspapers this week, and the first one is to do with interest rates. As inflation is said to be close to the official 2% target and as economic growth falters, economists are expecting the Bank of England to cut rates twice in 2024.
And with talk of a General Election in the Autumn, we are also likely to see tax cuts in the March budget as the Conservative government looks for ways to close the gap in the poles.
More favourable borrowing costs leads into story number two, which is focussed on house prices. According to a consultancy firm called Pantheon Macroeconomics, more affordable mortgage rates and a surge in consumer demand could push up house prices by 5% in 2024.
And while house prices may currently be down year on year, it’s not by much (around £3k according to the ONS). In fact, Nationwide has reported an upturn in house prices for the last three consecutive months.
Even in a sluggish housing market, homeowners might choose to stay put and invest in what they have, rather than move, but lower interest rates and a resilient property market will both help to boost consumer confidence – and we all know that’s usually good news for the home improvement sector.
It’s true that global events, including the wars in Ukraine and the Middle East and especially the attacks on cargo ships in the Red Sea will do little to improve the cost of living or energy prices.
But if anything, that could further increase demand for high performance windows and doors, as more affluent homeowners look to invest in long term solutions to lower energy bills.
As in 2023, the middle to upper wealth demographic will remain a key market for sales in the residential sector this year, with data from Tommy Trinder revealing the growing popularity of colour and flush in the last 12 months and there’s also some encouraging feedback in the latest Business Pilot Barometer.
Compared to 2022, the average number of sales was up almost 50% in December 2023 – and leads were up 14.7%.
As ever, it’s always best not to look at everything with rose tinted glasses – there’s no doubt that the industry will continue to face the tougher trading conditions that were prevalent in 2023 – but equally it’s also important to remain positive and focus on the opportunities.
Happy New Year, and here’s to a prosperous 2024!