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GGP December 2015

COMMENT Mind the gap: opportunities in new build The gap continues to grow between supply and demand of new build homes. GGP finds out what new build may offer window and door companies in 2016. The full scale of the housing crisis became clear recently with the release of new figures from the National Housing Federation. These showed that, in order to meet demand in England alone, 974,000 new homes should have been built between 2011 and 2014. The actual count for the period based on figures from 326 councils was 457,490 – less than half of what was actually needed. The NHF’s announcement was followed hot on its heels by a government proclamation, outlining its ambitions to build a million new homes by 2020. Laws of supply and demand and government policy should, according to analysts, come together to make new build a growth area in 2016. “The reality is that we haven’t been building enough new homes for decades,” said Jody Vincent, national sales manager at Emplas. “The gap continues to grow and that should be generating opportunities as long as housebuilders retain confidence in economic growth.” Developers have been accused of dragging their feet in 2015, developing only a limited number of sites and releasing only a limited number of properties to inflate the sale price of those homes they do deliver to market. Analysts also suggest that uncertainty around the outcome of the general election also contributed to the lack lustre performance of the new build sector in the first half of the year. But although, nationally, growth in housebuilding has failed to meet expectations – and more importantly demand – the number of new starts has, nonetheless, seen a modest increase. The latest figures from the Office of National Statistics shows that the introduction of the National Planning Policy Framework in 2012 has been effective in alleviating a log jam in planning law. They reveal that, in 2014, 240,000 planning applications were approved, compared to 158,000 in 2011. This included a significant growth in approvals for smaller developments of 10 units or less. “This is something that is frequently overlooked,” said Jody. “New build starts have collectively disappointed but the number of smaller developments breaking ground has increased significantly. This represents an area of opportunity for fabricators but also installers to supply into local and regional housebuilders. The growing importance of small builders was recognised by government in The Housing Growth Partnership and a £50m pledge this summer. With the £50m finance package announced by the Lloyds Banking Group last year, the Housing Growth Partnership creates a £100m war chest, aimed at boosting growth in the sector. Closer to home, the latest Palmer Report suggests that, in the face of “the number of new build installations rocketed by 23% last year as housing starts moved to their highest level since 2007.” slower than expected growth in the home improvement sector, fabricators and installers could do well to look to house builders as a source of new business. According to Palmer, the number of new build installations rocketed by 23% last year as housing starts moved to their highest level since 2007. While the report warns that uncertainty about interest rates and planning reforms have potential to take the edge off growth, it predicts continuing increases through to 2019. This compares to far more conservative growth forecasts for the home improvement sector of 5% growth by 2019. Emplas has created a dedicated business-to-business lead generation campaign, developed to support its customers in targeting exactly this demographic. This includes database creation, cleansing and support to deliver targeted campaigns to small builders. Jody continued: “Smaller developers and builders can be quite a hard group to identify and target but the returns can be significant. We’ll work with our customers to develop a database, check each entry and then create a campaign. “We also do a lot of the legwork including ring-rounds and followups and then pass the leads across for our customers to take forward. We have done it for established trade supplier customers but also supported retail focused customers in expanding their offer into trade supply.” Jody also points out that the advantage of new build is that it gives installers the opportunity to sell-in a complete product offer. He continued: “You get the chance to sell-in everything from top to bottom. With smaller developments the specification is often also much higher, you see far more requests for foiled finishes and the opportunities to sell at a premium are still very much there. “New build won’t be right for everyone, you need to go into it with your eyes open and critically, the right product offer but it does represent a growth market and one which delivers higher volume and for that reason alone, it’s worth exploration.” 81 www.ggpmag.com December 2015


GGP December 2015
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