Home renovation activity reached a four-year high in 2021 in the UK and early indications related to planned spending for 2022 showed continued activity, according to the annual Houzz and Home Study. And, there is more good news for design and renovation pros. Homeowner demand for hiring professionals to freshen and preserve their beloved homes - whether old or new - has risen also.
“Homeowners were clearly committed to investing in their homes despite heightened product and material costs driven by supply chain disruptions in 2021, and explored diverse funding sources,” said Marine Sargsyan, Houzz staff economist. “This was especially pronounced among recent homebuyers, who relied heavily on cash from previous home sales to fund their projects and spent significantly more than the national median.
Current economic conditions, such as rising interest rates and inflation may put downward pressure on homeowners’ demand for professional services in 2022. That said, homeowners managing the demands of aging housing stock and housing market shortages may continue to fuel renovation activity as they consider projects that require their immediate attention.” she says.
Read on to see some of the most prominent trends we discovered in our annual survey.
Both Spending & Renovation Activity are Up
A majority of homeowners - 53 percent - renovated their homes in 2021 compared to 49 percent in 2020, according to the survey of more than 3,200 UK respondents. And the median spending by homeowners increased 20 percent at £18,000 from £15,000 in 2020. While some of this reflected a jump in the cost of services, products and materials, the spending increase was higher than the rate of inflation.
When asked earlier in 2022, that spending was expected to be even higher throughout 2022. Nearly half of the surveyed homeowners planned to renovate (49 percent) and 55 percent planned to decorate this year. Homeowners’ planned spending sits at a record high, increasing to £10,000 for 2022 versus £7,000 for 2019, a 43 percent jump. Those with higher-budget renovations that fall in the top 10 percent of spending planned to invest at least £100,000 in projects in 2022 compared with £75,000 in 2021. Whether given the current economic conditions, homeowners reconsider projects that can potentially be deferred remains to be seen.
Credit Card Use Rises
Cash savings remained the largest source of renovation funding for homeowners at 86 percent, but using credit cards to finance projects increased six percentage points from 2020 to 18 percent in 2021. As expected, recent home buyers who purchased within a year, and short-term homeowners living in their homes for less than five years, were more likely to rely on cash from previous home sales (52 and 32 percent, respectively). Long term homeowners who have owned their homes for six years or more, were more likely to use cash from refinancing (eight percent). Cash savings and credit cards hold their ground as the leading forms of payment regardless of homeownership tenure.
New Homeowners Spend More
Recent homebuyers, who accounted for 14 percent of renovating homeowners in 2021, spent nearly double the national median (£30,000), surpassing short-term and long-term homeowners (£25,000 and £13,000, respectively). Short-term homebuyers with higher budget projects - the top 10 percent of spenders - invested £170,000 compared to £130,000 by recent homeowners and £100,000 invested by long-term homeowners. This is likely attributed to the larger scope projects they undertake, averaging three to four rooms, as well as home systems, such as electrical and plumbing.
Leaving it to The Pros
Homeowners increasingly turned to professionals for their design and renovation needs in 2021. Overall, 92 percent of them hired professionals in 2021, a four-point increase from the year prior. Not surprising, since recent home buyers tackle bigger projects than their peers, virtually all of them - 99 percent sought the help of pros compared with 96 percent of short-term home owners and 89 percent of those who have owned homes the longest.
The demand for design related services also jumped significantly, almost doubling in 2021 from the year before from 18 percent to 30 percent.
Homeowners relied most heavily on the expertise of speciality service providers such as electricians (58 percent) and plumbers (53 percent). And, in construction, builders (34 percent) and architects (23 percent) were the most hired professionals.
Boot Rooms Get Their Moment
Investments in interior rooms remained the priority for three of four renovating homeowners in 2021. And while kitchens received the most renovation love in 2021 and commanded the highest spend at £12,000, mud room redos also gained significant popularity. Refreshes of the spot where families leave their wellies and coats behind rose 26 percent in 2021 from 2020, outdoing the increased renovation popularity of dining rooms (25 percent), utility rooms (20 percent) and home offices (18 percent).
Homeowners Turn to Tech to Feel Secure
All of 2021 saw an increase in home security upgrades among renovating homeowners. Indeed, outdoor lighting (37 percent), alarms or detectors (29 percent) and outdoor security cameras (21 percent) were among the most frequently purchased technology upgrades. Home security system upgrades were most common among recent homebuyers with a 25 percent increase, followed by short-term homeowners at 22 percent and long-term homeowners at 16 percent.
How We Did It
Our annual Houzz & Home Study is the largest survey of residential renovation, building and decorating activity published. It covers a wide range of renovation projects in 2021, from interior renovations and additions to home systems, exterior upgrades and outdoor projects. Data gathered includes historical and planned spends, professional involvement, motivations and challenges behind building, renovation and decorating projects, as well as planned activities for 2022. The survey was sent to registered users of Houzz and fielded March through April 2022. The 2022 study includes more than 3,200 respondents in the UK alone, providing insights into the home improvement activity of the millions of users of the Houzz site and mobile apps.
Check out the full report here, and in the comments below let us know which rooms you predict will be the most popular renovation targets next year.
