AUTUMN/WINTER PREPARATION
DIY WORK ACCOUNTS FOR OVER A QUARTER OF ALL RETROFIT INSULATION INSTALLATION BY M²
Insulation is one of the key jobs home owners will be tackling in preparation for the colder weather and there remains a huge capacity for retrofitted insulation despite a drop in market share, according to research from AMA
T
he building insulation products market has been relatively stable in recent years with a small fall in value
during 2015 countered by a modest rise in 2016. The drop in 2015 was largely due to a reduction in government-subsidised retrofitted installation activity with the cancellation of the Green Deal and reduced funding for the Energy Company Obligation (ECO). The market recovered somewhat in 2016 as non-domestic construction output and housebuilding levels continued to rise along with a buoyant market for home extensions. However, this growth is not predicted to continue with the building insulation products market forecast to remain relatively static over the next few years. Government regulations, specifically those with an environmental focus, have had a clear impact upon the building insulation market’s product mix by value. The Building Regulations Part L 2013 were updated with an aim of further reducing carbon emissions on top of the 2010 standard for both new domestic and non-domestic buildings. This has contributed to environmentally friendly PUR/PIR products now having the largest share within the building insulation products market, accounting for some 40% of market value. The market has seen a reduction in demand for mineral wool products under these new regulations as well as the influence of the Green Deal and ECO. However, they still account for almost 30% of market value as they remain highly popular within the domestic and DIY markets because of their low price and ease of installation.
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Limited funds for subsidised retrofit
One impact of the government’s decisions to scrap the Green Deal and the reduced funding for the ECO has been a change in end user market segmentation.
These policy changes have significantly limited funds available for subsidised retrofitting activity and resulted in the ECO scheme generating only a fraction of the levels of domestic installation activity compared to previous government initiatives such the Carbon Emission Reduction Target (CERT) and Community Energy Saving Programme (CESP). The result has been a fall in demand within the domestic retrofit market; it is no longer the most important sector within the building insulation products market at around 32% market share by area installed. The non-domestic market now commands the largest share by area installed at around 36%. The estimated share of 32% for new housebuilding is higher than in recent years due to rising numbers of housing starts and completions. The reduction in domestic
retrofitting’s market share is not due to a lack of market potential. There remains a massive capacity for retrofitted insulation to Britain’s existing housing stock, with an estimated 7.8 million uninsulated dwellings with solid walls, 5.8 million with lofts that are easy to fill and 4.1 million with uninsulated cavity walls. This reduction in the domestic
retrofitting sector has had a knock- on effect throughout the market. There has been a uniform and extreme reduction in output and demand across the retrofitting market since 2012, the last year of CERT. Loft insulation, for example,
has dropped from 98 million m² installed in 2012 to only around nine million m² in 2016.
This has had an impact on many companies across the building insulation products market, with some showing significant turnover falls of 20% or more. Additionally, some of the largest installers in recent years have found trading difficult and the Mark Group went into liquidation in the summer of 2015 resulting the loss of around 900 jobs.
Loft insulation The reduction in government subsidised retrofitting has led to the DIY market commanding a more significant portion of the insulation retrofitting market.
While the size of this market as a whole has dropped significantly, it has remained relatively constant since 2013. Furthermore, the majority of the DIY retrofit market is concentrated in loft insulation
as it is both relatively easy and inexpensive work to carry out when compared to other retrofitting work. The result of this is that the five million m² of loft insulation installed by DIYers and local tradesmen now represents more than half of all retrofit loft insulation installed and over a quarter of the entire retrofit insulation market.
Overall, the building insulation
products market is forecast to see growth from 2019/20 onward. The market size is unlikely to fall further going forward with current levels of ECO funding set to continue and the strong DIY retrofit insulation market likely to remain constant. Other building insulation sectors, predominantly non- domestic and new house building, look set to drive some growth. The Building Insulation Market Report – UK 2017-2021 Analysis’ report, published by AMA Research, can be ordered online at
www.amaresearch.
co.uk or by calling 01242 235724.
8 SEPTEMBER 2017 DIY WEEK 19
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