I don’t want to be all doom and gloom, but times are uncertain right now. So, I thought I would discuss the current economic crisis and talk to industry experts about some of the main issues you may encounter this year, in the hopes that it will help you make informed decisions that are right for you and your situation.
Are you worried about renovating in 2023? It’s hardly surprising. While the experts were predicting the perfect storm of rising costs back in August 2022, I don’t think any of us realised the typhoon that would be hitting us this winter. From the whirlwind of chaos that raged after the not-so-mini budget in September to the Bank of England raising interest rates near the end of 2022 and predictions forecasting the UK’s longest recession.
Plus, we’ve been warned of potential energy blackouts that could last days, house prices dropping, and mortgage rates rising to 5%. To top it off, the surges in building costs, shortages in materials, and kitchen appliance delays – originally caused by covid, now exasperated by the war in Ukraine – don’t seem to be going anywhere, either.
(Don’t worry – I will be providing some reassurance shortly!)
So, you would be forgiven for thinking that now isn’t the right time to be undertaking a renovation project this year. Whether that be a new extension or kitchen refurbishment.
In fact, recent figures from property maintenance solution provider Help me Fix state that 52% of 3700 homeowners surveyed had put off their improvement plans as a result of the current cost of living crisis. They say 52% are doing so because they simply don’t have the money, with 48% stating they had the cash but were reluctant to spend it due to the current economic landscape.
Should I move in 2023 instead?
If all of this has made you wonder if moving would be a better alternative to renovating in 2023, you’re not alone. However, there’s a few things to consider first.
As group chairman of Cornerstone Tax, David Hannah, discusses: “If you’re looking at major renovations, it may work out cheaper to move. However, the stress that comes alongside moving to a new house is not an easy thing to deal with, especially in the current property market.
“The rise in building costs has affected how much home improvements will cost, but it has also caused a significant undersupply of houses. So, if you do decide to move, you could enter bidding wars, which could ultimately drive prices higher.
“At the same time, the affordability of mortgages has worsened and will inevitably impact people looking to move. I think that waiting until building costs decrease could be an option – but it’s hard to predict when this might happen, so you could be waiting for much longer than you want.”
Don’t panic – if this isn’t the right time to move, but you desperately need to update your home, it’s still a viable option to renovate, even with the added costs.
As David continues: “It’s a good idea to do home improvements because you’re adding value to your property in the longer term. It shouldn’t be a pure financial decision when deciding between improvements or moving – the next most suitable property may be 30 miles away and you must consider everything that needs to be sorted with a new move – new school, neighbourhood, dentist, doctors.”
Renovating in 2023: be aware of the key facts
While the current economic crisis is certainly concerning, I remain optimistic.
And so does Bill Milller at My Kitchen Specialist, who tells me that “two of the biggest challenges facing us are shortages of building materials and kitchen appliances”. He continues: “However, don’t be put off planning your renovation for 2023, just be aware of a few key facts.
“Stock issues are delaying renovations, whether it’s a shortage of building materials to get the project underway or a delay in appliance deliveries to complete the kitchen. Many projects over the last year have witnessed delays that are out of the builder’s and retailer’s control.
“Be mindful of this and have a plan in place. None of the issues above are new, so builders and kitchen specialists should have solutions and be able to work with you. They may have other manufacturers in their portfolio that have stock of materials or appliances available.
“Be aware that there will be supplier price increases and quotes may be time sensitive. With cost rises happening more often than ever, it’s never been so important to be conscious of this.” Crucially, Bill emphasises the need to engage a recommended, and trusted, builder or designer.”
Speaking to Pia Pelkonen, the creative director of Pia Design, she agrees and suggests the following: “It’s always best to get at least three to four quotations and to ‘sense check’ them and get timeline estimates before making a decision. Read through the detail of the quotations and make sure nothing is missing. When something sound too good to be true, it often is.
“With prices rising due to inflation and cost increases likely to continue, has the contractor provided fixed costs or estimates which may be subject to revision during the project? Make sure you have a written agreement with the chosen contractor – from The Joint Contracts Tribunal (JCT) or similar – to protect you in case the contractor lets you down, makes a mistake, disappears, or goes bankrupt.”
Work with your specialists
If you do decide to move forward with your project, Michael Reading from Housetastic encourages caution. “Renovating in 2023 in the midst of an energy and cost of living crisis can be risky,” he says, “So it’s vital that you take careful and correct steps to stay afloat.
“Ensure during the planning stage that you have factored in every cost from the beginning to completion. This will avoid any nasty surprises when it’s too late to turn back. Also consider your energy costs during this time, as the use of heavy tools and machinery for a prolonged period of time may push your bills past their limits.”
Michael says to expect to pay around 10-15% higher than previous construction costs for both materials and renovation specialists – although some have even suggested the figure is as much as 50-80%.
However, Michael believes that as long as you plan your project down to a T and discuss the timings and costs in depth, renovations are still extremely achievable. “Stay patient, expect delays, put aside a budget for any unexpected extra costs, and be flexible,” he says. Pia says she recommends homeowners to allow up to 20% contingency (both time and budget) – where we used to advise 10%.
“Having a plan and budget provides peace of mind that unexpected surprises can be dealt with, without impact to the project,” she explains. “Work together with your builder or designer to ensure, even with delays, that the project runs as smoothly and efficiently as it can,” continues Michael.
“Choose someone reliable to carry out the job, and don’t cut corners. Cutting corners can result in more unexpected costs and delays further down the line, which can add further stress to an already demanding situation. Remember, specialists have been fighting a losing battle in the current climate to stay afloat in the industry, due to a lack of skilled tradespeople and an extreme shortage of popular materials, such as timber and steel.
“Stay in close contact with your trades, take their suggestions on board, and request that they notify you of additional price increases to help you stay on track.”
Order your appliances as soon as you can
If you’re renovating your kitchen this year, Julia Steadman, commercial director at Brandt Design, recommends ordering appliances as soon as possible to try and combat delays. “We are finding that most manufacturers are currently operating on a minimum 12-week lead time for a large selection of their appliances.
“Please bear with your kitchen designer, as definite delivery dates are not currently available and due to the volatility in the global supply chain network it is extremely difficult to receive accurate future delivery information.
“As this is an industry-wide problem, every UK company is experiencing the same issues. In the meantime, I advise everyone doing a project to be aware of these delays and plan accordingly. While we are not currently experiencing any delays on kitchen furniture you will need to factor in more time for the delivery and installation of your project due to the appliance situation.
:As soon as you have decided on your designs, get these on order even if the finer details of your scheme have not yet been finalised.”
So, it may be worth preparing yourself for a kitchen that will be finished apart from the appliances. Think about how you’re going to cook in particular, as ovens are the area with the most delays.
Many retailers, particularly the best independent ones, may offer temporary alternatives but it might be worth keeping your old ones if they work perfectly well instead of chucking them out with the old kitchen.
Things will improve
Rebecca Nottingham, editor at our sister magazine Kbbreview, the most established business title for the kitchen, bedroom and bathroom retail industry, assures me things are improving. “The sector faced enormous pressure over the last three years, starting with the pandemic, which resulted in an extremely challenging, fragile supply chain,” she says.
“These are easing, and manufacturers and retailers are working together to overcome the odds. Everyone is still under pressure, but good communication between yourself and the retailer and understanding that you may need to be flexible with project lead times will help.”
Other industry insiders remain positive as well – and are encouraging homeowners to see this as a way of investing wisely. Buying products that last, and hard-wearing materials that won’t need to be replaced for decades, can save you money in the long term.
I’ll leave you with reassurance from Iain Swatton, at mortgage tracking and comparison site Dashly, made on a recent Kbbreview Podcast episode. “The UK is resilient, ” he said. “People still aspire to move, and people will still want to invest in their homes. I don’t think it’s all doom and gloom, it’s just we’re in unprecedented times we need to adjust to.”
So, if you’re renovating in 2023, I wish you the best of luck – and I hope this article helped!
Feature image: iStock.com / Imagesrouges