As we reflect on 2023 and welcome in a new year, where do we see 2024 taking the housebuilding sector? Read on as Scott, Wolters, Building Products Sales Director at EGGER UK, manufacturer of timber structural flooring boards, gives his thoughts on the year ahead…
Looking back at 2023, in many ways it was a year of two halves: practically buoyant for the first six months, with housebuilders delivering reasonable volumes. In comparison, the second half certainly felt the ‘squeeze’, with rising interest rates and inflation having an impact. We’ve seen both national and regional housebuilders scaling back, with output slowing and share prices falling.
Alongside this, we have seen the housing market going through a significant period of turbulence – a tunnel that we aren’t yet out the other side of.
It’s no secret that the economy has been, and will remain, a considerable cause of concern, with rising inflation leading to volatile material and labour costs. The cost-of-living crisis has been affecting everyone, while a combination of high interest and unpredictable mortgage rates have resulted in consumer confidence being at its lowest level for some time. People are nervous, understandably so, with first-time buyers perhaps the worst affected. With numerous influencing and interconnected factors, it has created a very real impact, making the market fall a little flat.
Looking at housebuilders themselves and they are having to navigate a changing landscape, with 2023 featuring a large swing in terms of market confidence and economic stability. This comes on the back of the post-pandemic efforts to re-start the economy, from stamp duty freezes and help-to-buy schemes to low interest rates. Now this has all come to an end, many have either already moved house or completed their home renovations and extensions – people’s focus on where to invest or spend their money is changing.
So, what could 2024 have in store? It’s predicted that the first quarter (and potentially the second quarter too) are going to be challenging months for housebuilders, and the wider construction industry. However, it’s not all doom and gloom, and there is a clear light at the end of the tunnel. We all know that economic dips like this come around in cycles and it is essential that we as an industry (housebuilders and suppliers) ride out the current wave without making any short-term decisions that could affect long-term gains or goals.
While the economy is of course a considerable concern for housebuilders, it is vital that this doesn’t distract or make us lose sight of one of the long-term objectives along the way: sustainability. The start of a new year brings us one step closer to Net Zero deadlines, with the decisions and changes we make now, both on an industry level and as individuals, having a significant impact further down the line.
The housebuilding sector has made some big moves in terms of reducing carbon emissions so far, something that we should all be very proud of. It’s important that we continue these efforts: working together, engaging industry leaders on the importance of building green and ensuring that this message is present throughout the supply chain.
Ensuring that only responsibly sourced building products and materials are specified and installed on housebuilding sites is another way we can continue to ensure that sustainability remains front and centre. Here, timber can be an invaluable resource: an inherently renewable and sustainable material that stores carbon throughout its lifetime and can be easily recycled and reused.
At EGGER, we are wholly committed to responsible manufacturing. As the largest user of recycled wood in the wood panel industry, we work hard to ensure our structural flooring boards are made of high-quality recycled timber material, as well as sawmill by-products that would otherwise be burnt or sent to landfill. When we do purchase raw material, it is sourced locally and responsibly, from PEFC or FSC® accredited forests.
Ultimately, as we enter into 2024, it is important that we as an industry don’t let short-term decisions – essentially putting a plaster on this short-term economic pain – have an impact on our long-term goals, which are so critical for us all.