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The new housebuilding market represents a substantial application sector for bathroom and shower products and the sector has experienced many changes in recent years. The volume of output in all sub-sectors has changed as a proportion of the total, while the housebuilding companies have undergone a degree of rationalisation. The volume of installations of bathrooms and bathroom products in new homes has increased, with more positive consumer attitudes towards additional bathroom facilities.
The quality and quantity of bathroom facilities has become a key selling point for new homes, with housebuilding companies attempting to attain a stronger position in an increasingly competitive market through better facilities in comparison with the competition.
Overall new housebuilding output experienced a major decline in the late 1980's and early 1990's and performance has since been volatile with any improvements constrained by a lack of more substantial improvements in consumer confidence.
The volumes of completions in 1996 and 1997 were disappointing despite a general upturn in the economy. The low level of completions was due to a reduced number of housebuilding starts in 1995, cuts in the level of funding for the public sector and the fact that consumer confidence was artificially supported by the windfall gains of 1997, and therefore did not underpin any more significant growth in the housing market.
The housebuilding market remains very fragmented with around 6,300 individual companies involved in building one or more home. The market has become more concentrated, especially among the leading companies, with a number of recent mergers and acquisitions, allied to strong organic growth from some companies. The leading 15 housebuilders account for almost 40 percent of total completions, which has increased from around 25 percent in 1995. George Wimpey, Barratt Developments, Beazer and Persimmon Homes are the leading housebuilding companies.
Bathroom and Shower products have a total market value of around £640 million at manufacturers selling prices, with the new build market accounting for a substantial amount of total demand.
Within the total market, bath and sanitaryware products account for around £300m in terms of MSP, with shower enclosures, screens and trays, shower controls and brassware accounting for the balance.
The majority of new homes include en-suite bathroom and downstairs cloakroom facilities. The increase in penetration of en-suites and cloakrooms is a result of the increase in average size of new houses, consumer preferences and housebuilders seeking to improve the saleability of new homes with better featured properties. Many housebuilders are focusing on installing en-suite bathrooms in smaller 2 bedroom homes, while new building regulations will require all new homes to have a downstairs cloakroom from mid - 1999.
The market for bathroom and shower products in new homes has increased substantially in recent years, which reflects the industry wide trend towards more en-suite bathroom and downstairs cloakroom installations. New homes are estimated to account for 18 percent of over £114 million sales of bathroom and shower products, in 1997. Sanitaryware is the largest product sector, followed by Baths, Brassware, shower controls, and shower enclosures and trays. Products for the main bathroom account for less than half the new build total, while products for en-suite bathrooms and downstairs cloakrooms account for the balance. There is a general trend towards installing more products, to a higher level of specification, with greater variety, as housebuilders aim to make new homes more individualistic.
In the private sector, the housebuilder is primarily responsible for technical and brand specification, with a trend emerging for the housebuyer to take a more active role in the choice of bathroom and shower products.
In the public sector, the housing associations take greater responsibility in deciding bathroom layout, contents and choice of brands. This high level of investment is due to their high standards, limited budgets, greater emphasis on special needs and focus on long term maintenance issue.
The most important criteria to the majority of housebuilders when specifying bathroom and shower products are price and quality, with some looking for a variety of designs and styles to help differentiate their homes. The specification and purchasing criteria depends upon the housebuilders marketing strategy, which reflects the needs of the ultimate housebuyer e.g. cost effectiveness is particularly important for low cost homes while quality is vital among premier brand homes.
This comprehensive report represents a detailed assessment of the market, reviewing major trends, key factors influencing developments and future prospects for the sector. Analysis is both quantitative and qualitative, based on our substantial experience of the building and home improvement markets.
Text © 1998 AMA Research
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Last updated by Duncan Nottage 5th March 1999