| AM45243 |
| AMA RESEARCH MARKET REPORT : SELF BUILD HOUSING MARKET JANUARY 2003 |
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BRIEF DESCRIPTION
| This report reviews the self-build housing market, providing information from customer characteristics to market size & trends, within the context of the overall UK housebuilding market. Products covered include: timber; heating, ventilation & plumbing products; bricks/blocks; bathrooms; plaster/cement; kitchens; electrical/lighting products; glazing/doors & windows; roofing/insulation products; & other materials & products. The report analyses consumer behaviour, & reviews financing, specification & purchasing procedures. It identifies major distributors, quantifies market shares by distribution channel, reviews key economic indicators & market influences, & forecasts the market in value & volume terms to 2005. |
| This report provides a review of the self-build market, providing information from customer characteristics to market size and trends, within the context of the overall UK housebuilding market. |
| Areas specifically analysed include:- |
| Review of the Overall UK Housebuilding Market - Total Market Size - Volume/ Value, Housing Starts, Urban Regeneration, Regional Housebuilding, Total Housebuilding Completions |
| The Self-Build Housing Market - Market size by Value, Historical Trends, Sector Shares, Timber Frame Vs Brick / Block and Others Share, International Timber Frame Housing Usage. Private and Social Self-Build Shares, Product sector relevance to the Self-Build market, Future Prospects and Forecasts. |
| Distribution of Products - Channel share, Review of Builders Merchants, Electrical Wholesalers, Specialist Retailers, Direct Sell, Internet, Mail Order, DIY, Self Build Specialists etc. |
| Consumer Behaviour and Processes - Characteristics of Private & Social Self-Builders, Build Processes, Financing Issues, Key Influences, Key Motivators, Project Characteristics, Regional Variations in Self Build/ Timber Frame Housing, Planning Processes in Social Self-Build, Time-scales. |
| Analysis by Product Group - Overall Market Size, Trends and Relevance to the Self Build Market, including:- |
| Timber · Heating, Ventilation & Plumbing |
| Bricks / Blocks · Bathrooms |
| Plaster / Cement · Kitchens |
| Electrical / Lighting · Glazing / Doors and Windows |
| Others - SIPS, Reclaimed Materials etc, · Roofing / Insulation |
| The market has continued to show both volume and value throughout the last few years with optimistic prospects for growth in all materials and service sectors. The report assesses the current market situation and forecasts likely developments through to 2005. |
| Key areas of coverage in the report include:- |
| THE SELF-BUILD HOUSING MARKET |
| Market size in value and volume terms and forecast through to 2005. |
| Underlying influencing factors for the mid-end 1990s. What are the trends, are they likely to continue? |
| Current situation - factors influencing growth/decline, prospects for the next 3-4 years. |
| Cost breakdown per sector - Land, Materials, Labour and Others - recent trends and future prospects. |
| Shares of Key Product Sectors - Overall values & trends and their relevance to Self-Build. |
| Timber Frame Vs Brick / Block - Share by value and likely future prospects |
| International Timber Frame Usage - Total UK Timber Frame Housing from an international perspective. |
| Private and Social Self-build Sectors - The relevance of each to the market and key characteristics. |
| Regional Variations in Self-Build - differences in Self-Build between geographical regions. |
| CONSUMER BEHAVIOUR |
| Generic Characteristics of Self-builders - Key Traits of Private and Social Self-Builders. |
| Analysis of who is interested in self-build with results from a survey posted in Build It Magazine. |
| Motivations and Influences - Key Issues affecting motivation to self-build, processes and specifications. |
| The Self-Build Project - Typical expenditure by product, generic characteristics of a self-build project. |
| Differences between Social and Private Self-Build - Key Issues, Processes etc. |
| FINANCING / SPECIFICATION / PURCHASING PROCEDURES |
| Financing Procedures & Sources- Analysis of where Private & Social Self-Builders raise finances to build. |
| Financing Affecting Decision-making - How Sources of revenue affect the specification and build processes. |
| Generic Self-Build Processes & Timings - Differences between Private & Social Processes. |
| Key Specification Issues - Key Influences in Specification Procedures. |
| PRODUCTS / SUPPLIERS |
| Market size per major product group and relevance to the Self-Build Market |
| Product mix within major product groups, trends within products. |
| Average spend in Self-Build projects by product group - key areas of difference between self-build and commercial housebuilding market. |
| Future Prospects for each product sector. |
| DISTRIBUTION & SUPPLY |
| Analysis of major distributors in Self-Build - Builders/Plumbers Merchants, Electrical Wholesalers, DIY Multiples, Specialist Products Suppliers, Internet / Mail Order, Others. |
| Share by Value of Key Distribution channels in Self-Build Market |
| Key players by channel - shares, sector strengths and weaknesses etc. |
| GENERAL / FUTURE PROSPECTS |
| Overall UK Housebuilding Market - Size, Trends, Urban Regeneration, Regional Variations. |
| Relevance of Self-Build Market - How important is the Self-Build Market? |
| Key Economic Indicators and Market Influences - population, interest rates, contractor output by region, ability to buy, consumer spending, Employment, Exchange rates etc. |
| Future Prospects - Likely developments in the market due to macro & micro issues. |
EXECUTIVE SUMMARY
| The overall self-build market in the UK is estimated at around £4.03 billion in 2002. |
| The self-build housing market has witnessed rapid growth levels since 1995, with the total market value rising by over 45% over the last 6 years, primarily stimulated by 2 key sectors - land prices and labour costs - both of which have risen rapidly during the last five years and both of which are forecast to grow rapidly in the future. However, all sectors in the self-build market are performing well at present, with above inflation growth in the materials sector, due to the continued emphasis on higher value and often niche products. |
| Material costs are currently worth an estimated £1.21 billion, labour costs currently estimated to worth £1.17 billion, land costs which have been estimated at £1.13 billion in 2002 and miscellaneous costs estimated to be worth £0.52 billion. |
| Within the self-build industry there are two broad segments - private self-builders and social self-builders. Social self-builders are often part of a Registered Social Landlord (previously Housing Association) and account for around 2% of the market. The processes, materials and needs of these 2 segments are significantly different from each other and are therefore analysed individually. The market can also be divided into 3 generic construction methods - timber frame housing, traditional brick and block, and other new construction materials. Share taken by timber frame is increasing and now accounts for around 25% of the market by volume. |
| With regards to who is self-building there has been a shift from those on low incomes to those in the ABC1 social grouping on a relatively high income who are looking for better value for money in a new home. |
| Six key distribution channels have been identified in the market, each having significant importance in particular product sectors. The wide ranging number of products involved in the self-build market means that the distribution structure in the self-build market remains highly fragmented, though builders merchants account for over 55% share. |
| The fragmentation of the product supply in the self-build market is immense due to the amount of individual suppliers in the market. Each of these suppliers operates to a greater or lesser extent in the self-build market and ranges from timber frame kit manufactures to producers of screws and fixings. |
| In the private sector, the trend towards higher value products is expected to continue to add value to the sector as self-builders look for more environmentally friendly products, greater energy efficiency, enhanced aesthetic designs, functionality and products which renders the overall self-build process less complex. The introduction of Part L legislation has lead to higher value products as thermal insulation becomes a priority. Hence products which offer certain benefits, such as permanent insulated formwork systems, which are filled with concrete, structural insulated panels, integrated cabling solutions, underfloor heating, pre-fabricated timber frame etc., are all likely to witness an increase in demand in the short to medium term. |
| Although the actual construction process of a self-build house has become significantly easier during the last decade, the processes of specification and purchase of products and materials has become increasingly complex as manufacturers offer more advanced construction materials, added value products etc. 'Turnkey' solutions are increasing in popularity in the industry with many of the companies involved in the production of self-build housing kits now offering a complete solution. |
| The individual nature of many self-builders and the desire to construct the 'perfect' home often provides a greater degree of motivation for managing the project themselves. Self-builders are generally highly motivated and often are well-versed in new construction methods, materials and products, often more so than traditional building product distributors. This results in an end-user with different, perhaps more specific needs in terms of information and service than traditional customers of building products. It must be noted however, that as little as 5% of self-builders actually undertake a self-build project completely by themselves. |
| Forecasts for the UK self-build market look optimistic. With a growing number of media sources promoting the self-build concept there is estimated to be significant rises in volume and value of the self-build market to reach an estimated £5.25 billion in 2005. An increasing proportion of the population desire to own a better quality accommodation than they could afford on the property market, which is particularly an issue at present given the rapid rise in house prices in the last 3 years. |
| In European countries, self-build often represents as much as 60% of all new houses built and with this figure at around 13% in the UK, it shows that the market is still someway behind. As awareness continues to grow in this arena, and the antipathy towards the easier-to-erect timber frame houses subsides, the self-build market should experience reasonably high levels of growth, particularly in Scotland although indications are that England will also experience rises in volume. However, the market may be constrained by lack of available land and high land and labour cost, due to current and future predicted skills shortages in the labour market. |
TABLE OF CONTENTS
| 1. INTRODUCTION 7 |
| 2. SUMMARY 8 |
| 3. ECONOMIC ENVIRONMENT 11 |
| 3.1 GDP 11 |
| 3.2 INFLATION & INTEREST RATES 12 |
| 3.3 UNEMPLOYMENT & CONSUMER SPENDING 12 |
| 3.4 HOUSING & CONSTRUCTION 13 |
| 3.5 STERLING 14 |
| 3.6 CONCLUSIONS 14 |
| 4. OVERALL UK HOUSEBUILDING MARKET 15 |
| 4.1 UK NEW HOUSING MARKET 15 |
| 4.2 MARKET SIZE 15 |
| 4.3 HOUSING STARTS 15 |
| 4.4 WHITE PAPER ON FUTURE URBAN REGENERATION 18 |
| 5. SELF-BUILD MARKET 19 |
| 5.1 INTRODUCTION 19 |
| 5.1.2 Definition 19 |
| 5.2 MARKET SIZE 20 |
| 5.2.1 Trends 20 |
| 5.2.2 Background 21 |
| 5.2.3 Current Market Influences. 22 |
| 5.2.4 Build Cost Structure 24 |
| 5.3 MARKET VOLUME 27 |
| 5.4 AVERAGE PRICES 29 |
| 5.5 KEY ISSUES 31 |
| 5.5.1 Key Motivations To Self-build 31 |
| 5.5.2 Generic Characteristics of Self-builders 33 |
| 5.5.3 Profile of a Self-build Participant 34 |
| 5.5.4 Generic Self-build Project Characteristics 40 |
| 5.5.5 Regional Variations in Self-build 41 |
| 6. TIMBER FRAME AND BRICK / BLOCK MIX 44 |
| 6.1 MIX OF TIMBER FRAME AND BRICK/BLOCK. 44 |
| 6.2 SELF-BUILD TIMBER FRAMED HOUSING 47 |
| 6.3 REGIONAL MIX IN TIMBER FRAME USAGE. 53 |
| 6.4 SELF-BUILD TRADITIONAL HOUSING 54 |
| 6.5 PRIVATE AND SOCIAL SELF-BUILD MARKET 55 |
| 7 BUYING & SPECIFICATION PROCESSES 58 |
| 7.1 PROCESSES 58 |
| 7.1.1 Generic Self-build Process & Timing 58 |
| 7.1.2 Private Self-build Processes 61 |
| 7.1.3 Social Self-build Processes 61 |
| 7.2 FINANCIAL ISSUES 65 |
| 7.2.1. Social Self-Build Financing 66 |
| 7.2.2 Private Self-build Financing 68 |
| 7.3 KEY SPECIFICATION ISSUES 69 |
| 8. SELF-BUILD MATERIALS 71 |
| 8.1 PRODUCT MIX 71 |
| 8.2 MATERIALS MIX - TYPICAL PROJECT 72 |
| 8.2.1 Bricks /Blocks 75 |
| 8.2.2 Cement and Plaster Materials 79 |
| 8.2.3 Wiring / Lighting 81 |
| 8.2.4 Heating and Ventilation 84 |
| 8.2.5 Bathrooms 89 |
| 8.2.6 Kitchens 93 |
| 8.2.7 Glazing / Doors / Windows 96 |
| 8.2.8 Roofing & Insulation 100 |
| 8.2.9 Timber 104 |
| 9. DISTRIBUTION AND SUPPLY 108 |
| 9.1 STRUCTURE 108 |
| 9.2 SELF-BUILD SPECIALIST SUPPLIERS 110 |
| 9.2.1 Self-build Housing Timber Frame Kits 111 |
| 9.2.2 Self-build Oak Framed Housing 114 |
| 9.2.3 Self-build Log Cabins 115 |
| 9.2.4 Self-Build Brick and Block Package Companies 115 |
| 9.2.5 Other Materials Companies Involved in the Self-build Market 116 |
| 9.3 BUILDERS & PLUMBERS MERCHANTS 117 |
| 9.4 DIY MULTIPLES 122 |
| 9.5 ELECTRICAL WHOLESALERS 124 |
| 9.6 SPECIALIST PRODUCT SUPPLIERS 128 |
| 9.7 DIRECT SELL 129 |
| 9.8 OTHERS INC. MAIL ORDER 130 |
| 10. FUTURE PROSPECTS 131 |
DIAGRAMS
| TABLES & CHARTS |
| CHART 1 OVERALL SELF-BUILD HOUSING MARKET VALUE 1995-2005 (£ BN) 8 |
| TABLE 2 HOUSING STARTS 1992-2005 IN GREAT BRITAIN BY SECTOR ('000) 16 |
| TABLE 3 UK MARKET FOR SELF-BUILD HOUSING 1995-2005 BY VALUE £BN 20 |
| TABLE 4 VALUE OF PRODUCT SECTORS IN THE SELF-BUILD MARKET 1995-2005 £BN 25 |
| CHART 5 MIX OF TOTAL SELF-BUILD MARKET BY VALUE 2002 27 |
| CHART 6 SELF-BUILD HOUSE-BUILDING MARKET BY VOLUME1995-2005 28 |
| CHART 7 SELF-BUILD AVERAGE PRICE 1995-2005 (£000S) 30 |
| CHART 8 WHICH OF THE FOLLOWING MOST APPLIES. "I WOULD SELF-BUILD TO….." 33 |
| CHART 9 SOCIAL-ECONOMIC GROUPING OF 'BUILD IT' MAGAZINE SURVEY RESPONDENTS 35 |
| CHART 10 HOUSEHOLD INCOME OF SURVEY RESPONDENTS 36 |
| CHART 11 AGE OF RESPONDENTS 37 |
| CHART 12 PERCENTAGE OF RESPONDENTS WITH CHILDREN UNDER 16 38 |
| CHART 13 MARITAL STATUS OF RESPONDENTS 39 |
| CHART 14 HOME OWNERSHIP TYPE OF RESPONDENTS 40 |
| CHART 15 REGIONAL VARIATIONS IN THE SELF-BUILD MARKET BY VOLUME OF HOUSES 42 |
| CHART 16 SELF-BUILD SHARE OF TOTAL HOUSING MARKET BY COUNTRY (% VOULUME) 43 |
| CHART 17 SHARE FOR TIMBER & BRICK/BLOCK SELF-BUILD HOMES BY VOLUME 2001 44 |
| TABLE 18 KEY INFLUENCES FOR TIMBER FRAME VS BRICK / BLOCK 46 |
| TABLE 19 INTERNATIONAL TIMBER FRAME HOUSING MIX 2001 47 |
| CHART 20 MIX OF SELF-BUILD TIMBER FRAME HOUSE PRODUCTS BY VOLUME 48 |
| CHART 21 MIX OF UK TIMBER FRAME HOUSING 1982-2005 (% OF TOTAL HOUSING) 50 |
| CHART 22 REGIONAL MIX IN THE TIMBER FRAME SELF-BUILD MARKET BY VOLUME 53 |
| CHART 23 MIX OF PRIVATE AND SOCIAL SELF-BUILD MARKET BY VALUE 2002 56 |
| TABLE 24 STAGES & TIMING FOR TRADITIONAL SELF-BUILD PROJECTS 59 |
| CHART 25 GENERIC PRIVATE SELF-BUILD PROCESS 61 |
| CHART 26 SOCIAL SELF-BUILD PLANNING & PROCESS 63 |
| CHART 27 KEY SOURCES OF FUNDING FOR SOCIAL SELF-BUILD 66 |
| CHART 28 PRODUCT MIX OF SELF-BUILD MARKET BY VALUE 2002 71 |
| CHART 29 VALUE OF KEY PRODUCT SECTORS IN A SELF-BUILD PROJECT 2002 (£000'S MERCHANTS SELLING PRICE) 73 |
| CHART 30 CONTRIBUTION OF THE SELF-BUILD SECTOR TO THE BRICK / BLOCK MARKET 2002 76 |
| TABLE 31 THE UK MARKET FOR BRICKS, BLOCKS AND CONCRETE GOODS 76 |
| CHART 32 MIX OF BRICKS, BLOCKS & CONCRETE PRODUCTS BY VALUE 2001 MERCHANT SELLING PRICES 77 |
| TABLE 33 THE UK MARKET FOR CEMENT AND PLASTER MATERIALS 1996-2001 79 |
| CHART 34 PRODUCT MIX OF CEMENT & PLASTER PRODUCTS 2001 80 |
| CHART 35 LIGHTING AND ELECTRICAL PRODUCTS MARKET 1996-2005 (£M MSP) 82 |
| TABLE 36 UK WIRING ACCESSORIES MARKET (£M MSP) 1996-2005 83 |
| TABLE 37 THE UK SPACE & WATER HEATING MARKET 1994-2001 - BY VALUE (£ MILLION AT MERCHANTS SELLING PRICES) 85 |
| TABLE 38 PRODUCT MIX WITHIN THE HEATING AND VENTILATION PRODUCTS MARKET 2001 BY VALUE (£ MILLION AT MERCHANTS SELLING PRICES) 86 |
| TABLE 39 PRODUCT MIX - SPACE HEATERS 2001 BY VALUE - (£ MILLION AT MERCHANTS SELLING PRICE) 88 |
| TABLE 40 UK BATHROOM PRODUCTS MARKET 1996-2003 (£M MSP) 90 |
| CHART 41 UK BATHROOM MARKET SHARE BY PRODUCT SECTOR 2001 BY VALUE 92 |
| TABLE 42 UK KITCHEN FURNITURE & WORKTOPS AND SINKS MARKET 1996-2001 - BY VALUE (£M MSP) 95 |
| TABLE 43 NEW HOUSING MARKET VOLUME OF WINDOWS AND DOORS 2001 97 |
| TABLE 44 FORECASTS OF VOLUME OF WINDOWS & DOORS UTILISED IN NEW HOUSING 1996-2004 98 |
| TABLE 45 DOMESTIC CONSERVATORY MARKET 2000-2005 (£M RSP) 100 |
| TABLE 46 THE UK ROOFING AND INSULATION MARKET (1995 - 2002) 101 |
| CHART 47 PRODUCT MIX FOR ROOFING AND INSULATION MATERIALS MARKET 2001 102 |
| TABLE 48 UK TIMBER PRODUCTS - 1995-2001 (£M MERCHANT SELLING PRICES) 104 |
| CHART 49 TIMBER SALES BY MAJOR PRODUCT GROUPS 2001 BY VALUE 105 |
| CHART 50 DISTRIBUTION CHANNELS IN THE SELF-BUILD MARKET 108 |
| CHART 51 SHARE BY VALUE OF DISTRIBUTION CHANNELS IN THE SELF-BUILD MARKET 2002 109 |
| CHART 52 TYPICAL SHARE BY COSTS OF TIMBER FRAME HOUSE 112 |
| CHART 53 MARKET SHARE OF KEY BUILDERS & PLUMBERS MERCHANTS 2002 117 |
| CHART 54 ELECTRICAL WHOLESALE MARKET SHARES 2001 BY VALUE 125 |
| TABLE 65 KEY INFLUENCES AFFECTING FUTURE PROSPECTS 132 |
Text © 2004 AMA Research
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