Latent demand offers opportunity

New building housing offers major opportunities for the window industry argues Ryan Johnson, managing director of Emplas.

It is now time, according to commentators, for government to focus on delivery and key infrastructure priorities, including the delivery of new homes.

The shortage of supply of new homes is acute; a generation is locked out of the housing market and house price inflation, despite the dip seen in last year, is unsustainable. And that’s just got worse.

Housebuilding across England fell to its slowest quarterly growth for three years according to the latest official figures, with ground-broken on only 37,220 new homes in the year to June. This represents an 8% fall on the same period a year ago.

Annual housing starts fell to 160,640, 1% down on the previous year, but still woefully short of the government’s target to deliver a housing revolution and build 300,000 new homes a year.

The government has reaffirmed its target of building 300,000 homes per year in England, and cites house building as a key infrastructure priority.

If the government is also looking to deliver a bounce in the economy as we proceed with Brexit, supporting the delivery of new private homes and the delivery of more affordable housing is a very obvious way of doing it.

Putting all of that and politics to one side, there’s a fundamental issue of supply and demand that we need to address.

The UK’s housing crisis wasn’t, according to analysts, created overnight. It’s much more the product of successive failures of successive governments.

Even before the new build housing sector fell off a cliff in 2008, the rate of construction of new homes was falling far behind the government’s own target to build 240,000 new homes per year to an average of 100,000. In 2008 it dropped to the lowest peacetime figures since 1924.

The opportunities are going to be considerable, because we aren’t just talking about projects coming back online that have been mothballed during the last 18 months, but the repeated shortfall in completion of new homes in the years that preceded it.

Research by Heriot-Watt University shows that these successive failures mean that England has a backlog of 3.91 million homes, meaning 340,000 new homes need to be built each year until 2031.

It’s worth noting that this figure is significantly higher than the government’s current target of 300,000 homes annually.

So, if the demand is there, is now the right time to be looking to new build? The fortunes of new build and the window industry as one of its suppliers, go hand in hand with those of the housing market.

Policy initiatives – in this case Conservative ones – particularly those to get first time buyers on the property ladder, point to growth.

This includes a manifesto pledge to the renewal of the Affordable Homes Programme and Right to Buy, something which could also deliver growth to the home improvement market.

The latest figures from the Royal Institution of Chartered Surveyors found that at the end of 2019, after holding steady in the last four months, the new buyer enquiries net balance fell to -15%. In keeping with this, newly agreed sales fell, with a net balance of -27% (from -11% previously), with activity reportedly slipping in virtually all parts of the UK.

This, however, the Rics attributed to uncertainty pre-election, and it expects a greater level of market resilience in 2020.

And although large public or private housing schemes may not be in reach of all installers, opportunities exist with smaller developers.

At the end of last year Emplas had become inundated with new build leads, and we were offering support to fabricators to enter the market through our new Authorised Installer Network.

As well as giving installers direct lead generation support across home improvement and commercial markets, membership provides access to a suite of free digital lead generation tools, literature and showroom support.

The whole of new build isn’t going to be right for all installers but there are opportunities. We’re not just talking about the big developers here but regional and local builders in addition to private individuals.

The critical thing here is that these smaller projects will often be delivered to a higher specification with greater emphasis on quality and the right aesthetic. As a consequence, to access it, you need flexibility in your supply chain and the right product offer to win the business in the first place.

We’re not just talking windows and doors but a whole range of products that offer the flexibility to meet the demands of bespoke design.

In addition to Optima from Profile 22, Emplas also offers Aluk’s Part Q approved F82 bifolding door. Now available with a new clip-on sill option, which can fitted after installation to prevent damage, it offers U-values of 1.4W/m²K with a double-glazed unit, and 0.9W/m²K when triple glazed.

The other thing that comes out of the general election campaign last year is the importance of sustainability and the energy efficiency of our homes, and the F82 taps into end-user and new-build sector demand for energy efficient products.

New build is a source of opportunity. The specialists are there servicing the high-volume low margin sector of the market but there is far greater fluidity in smaller, higher quality specification and, as a consequence, higher value regional developer and private new build sectors.