November/December 2021
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LOW HOUSING STOCK<br />
DRIVES UP PRICES<br />
A lack of new properties being listed for<br />
sale continues to drive house prices up,<br />
with most new buyers failing to factor<br />
energy efficiency into their purchase,<br />
according to the October <strong>2021</strong> RICS UK<br />
Residential Market Survey.<br />
Despite a rise in the number of new enquiries,<br />
RICS reports that agents currently only have<br />
37 properties on their books on average.<br />
This is not only impacting on sales activity<br />
but is a significant factor behind current<br />
house price rises, with the trend expected to<br />
continue into the year ahead.<br />
Extra questions were added to RICS’ October<br />
survey to gauge consumers’ willingness to<br />
reduce their home’s carbon emissions and<br />
it’s impact on the market. Whilst one-third of<br />
respondents have seen an uptick in demand<br />
for energy efficient homes, it isn’t currently<br />
impacting the property value. Over threequarters<br />
of respondents see little to no impact<br />
of having an energy efficient property on prices.<br />
Whilst 62% of respondents anticipate<br />
demand for energy efficient properties<br />
improving over the coming three years, the<br />
current barrier for many to improve enhance<br />
their property’s energy efficiency is cost .<br />
Simon Rubinsohn, RICS chief economist,<br />
said: “As long as there is a lack of choice<br />
for would-be buyers, it is clear that buyers<br />
ambition to be more climate friendly will<br />
have to move down their list of priorities.”<br />
INSIGHT DATA WARNS OF ‘CASHFLOW CRISIS’<br />
Insight Data’s Andrew Scott<br />
speaking at the recent<br />
Glazing Summit<br />
Insight Data’s CEO, Andrew Scott, has warned<br />
that the industry could face a cashflow crisis<br />
over the next few months.<br />
Revealing the results of an installer survey during<br />
the recent Glazing Summit Conference, Andrew<br />
said: “As an industry we’ve been focused on<br />
managing supply-chain issues and employment<br />
headaches caused by the pandemic and Brexit,<br />
and managing customer expectations in extremely<br />
difficult circumstances.<br />
“But it may be time to go back to the fundamentals<br />
of business and cashflow management as we<br />
approach Christmas and New Year.”<br />
“The data shows consolidation with the number of<br />
installers and PVC-U fabricators declining. This can<br />
be good news, with less competition companies<br />
are winning more business but there are some<br />
underlying issues that could create some real<br />
problems over the next few months.”<br />
Presenting at the Glazing Summit, Andrew outlined<br />
how installers had large order books and many<br />
were fitting jobs now that were sold four or five<br />
months ago (or longer).<br />
He said: “There are two problems here. Firstly,<br />
many of the jobs being fitted now or over the<br />
next couple of months were sold before suppliers<br />
implemented a string of price increases. It means<br />
jobs could be fitted at drastically reduced margins<br />
or even at a loss in some cases.”<br />
“Secondly, many installers have amassed huge<br />
order books where homeowners have paid large<br />
deposits months ago, providing a significant and<br />
artificial cashflow bonanza which in some cases<br />
has been used to prop-up the business, mitigate<br />
margin erosion or fund larger stock levels and<br />
work-in-progress.”<br />
Suggesting that now is the time to re-visit<br />
cashflow forecasts and budgets and take prudent<br />
business steps, Andrew said: “The industry has<br />
never faced a situation like this, and we all know<br />
how quickly cashflow can swing, especially after<br />
a few weeks of Christmas/New Year slow-down<br />
or bad winter weather. Installers don’t have<br />
the option of factoring or invoice discounting<br />
so planning ahead now could avoid a potential<br />
disaster, especially as suppliers are less likely to<br />
be flexible.”<br />
Elsewhere at the Glazing Summit, installers<br />
debated the soaring cost of materials, and<br />
whether the drastic price rises they’ve received<br />
are really justified, given the poor quality and<br />
service many report they continue to experience.<br />
A panel of experts also discussed the growing<br />
number of mergers and acquisitions in<br />
fenestration, predicting further consolidation as<br />
a result of Brexit, changes to consumer demand,<br />
and the continuing fallout of Covid-19.<br />
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