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New build – the end of volume sales?

New build – the end of volume sales?

This article was written by aluplast

The UK has a problem. Years of under-supply mean that house price affordability is an acute issue. That the median house price in England and Wales topped roughly nine times median earnings in 2015, sums up the scale of the challenge succinctly.

And while the past three decades are littered with the pledges of successive governments to hit a target to build 250,000 new homes each year – the level that would be expected to keep price rises in check – so successive governments have consistently failed to do so.

“The last time we actually built 250,000 new homes in a single year was 1979-80”, says Ian Cocken, Sales and Marketing Director, aluplast. “The current housing crisis certainly wasn’t made over night but it is heading towards a tipping point.”

With a generation locked out of the housing market and with one eye to its future chances in the polls, the Government presented its long-awaited housing white paper last month. Pledging to boost housing supply, it contains a raft of measures to get Britain building – and that has ramifications for our own industry.

“The government has adopted a carrot and stick approach”, says Cocken “perhaps more accurately incentives for small builders and ‘sticks’ for councils and large housebuilders”.

This includes measures to force councils to allow more construction. Higher charges levied on developers should provide extra funding to councils’ planning departments, making them more efficient. In addition, the method by which councils calculate how many extra houses they need looks set for reform.

There are also measures to encourage planning authorities to have a little more backbone in the face of NIMBYish [Not in my back yard] residents opposed to the building of new homes. This includes the launch of a standardized framework for calculating what needs to be built. Councils that miss their targets may have to surrender control over planning to central government.

The Government also sets out proposals to release the stranglehold of a few big developers on the house building sector and address practices, which it sees as undermining its targets. This includes the charge that large developers are guilty of ‘land-banking’- buying up sites but leaving them undeveloped to wait for market forces to increase their value – something denied by big housebuilders!

Cue the introduction of new legislation which empowers councils to compulsorily purchase sites – a ‘use it or lose it’ rule.

The white paper also sets out other proposals to address what it sees as the monopoly of big developers. This includes measures to encourage the release of smaller sites with limited appeal for larger house builders and the launch of the new £3billion Home Builders Fund aimed at smaller builders.

“We’re not looking at the end of large volume sales into the house building sector but we are looking at a significant shift in emphasis”, says Cocken.

He continues: “We’re going to see more but smaller developments. These smaller developments, have traditionally more closely reflected retail trends, including the specification of foils and the demand for premium materials including aluminium.

“While the focus of the Government is on house price affordability, housebuilders still have to turn a profit and foils or aluminium finishes, deliver kerb appeal.”

This is consistent with wider industry forecasts. Figures released by Palmer Market Research, suggest that a flattening of the market in 2015 saw total volume fall by 0.7%. This was, however, offset by a shift towards higher-end products and higher value installations, which delivered a 2% increase in installed value to £4.20 billion.

This includes aluminium which grew in value terms by 8% in 2015 to £370million. “Aluminium is forecast to see continuing growth through to 2020, largely driven by end user demand. We expect the proposals outlined in the housing white paper and the focus it brings to those smaller plots, to increase and accelerate demand for both aluminium and foils”, says Cocken.
aluplast’s new system offering, the Ideal 4000, which will be launched at the FIT Show this May, supports access to this burgeoning market. The leading-edge 70mm PVC-U casement system is defined by a contemporary ‘SquareLine’ profile, plus the a highly innovative ‘clip-and-fix’ aluskin aluminium finishing option.

Cocken argues in achieving a WER A+ window in either its PVC-U, or PVC-U and aluskin, specifications, Ideal 4000 also delivers significant advantages over traditional aluminium systems. “Regardless of whether you’re a big or small housebuilder, energy efficiency remains key and it’s the Achilles heel of every traditional aluminium system out there. Ideal 4000 aluskin, delivers the same aesthetic as aluminium but at lower cost and critically, delivers a far higher level of thermal performance.

“The opportunity to pitch Ideal 4000 at three distinct price points: either a contemporary squareline casement; in its foiled options; or at a premium commercial offering as aluskin - is a real
USP for fabricators.

“That this can be done with very low stock holding, using standard fabrication and without significant investment in new machinery, supports manufacturers in winning business across the new build sector regardless of price point or material specification”, he says.

Tested to Part Q, PAS24:2012 and Secured by Design Specifications, Ideal 4000 is available in 27 foiled finishes in addition to aluskin. These are available on lead times of just a few days on stock colours and an industry leading 15 days on special orders, with no minimum order, no-surcharge and no set-up costs.

“This is a cutting-edge system in the truest sense, with potential to shape the systems market”, continues Cocken. “The ceiling in the new build sector is set on aluminium only by affordability and thermal performance – and often both in combination.

“Ideal 4000 aluskin delivers a high level of thermal efficiency at far lower cost than traditional aluminium systems and we’re seeing it win our customers business.

“It also allows fabricators to meet demand for either volume or foiled products with minimum stock holding. Its potential is huge in what is a growing new build market.”

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