Nearly every Kbb business we have spoken with recently have all said the same thing, in that the Kbb Industry Confidence level is at an all time low and needs a life line boost in confidence levels
Kbb and Housing Sectors Flat
Conveyancing solicitors, mortgage brokers, lenders and estate agents across the UK have all been reporting historic lows in activity which has steadily gotten worse month on month, since September 2022.
This historic lull has also been felt by the building trade and home improvement sector who have seem the covid surge in activity banished to the distant memory as homeowners, facing an unprecedented cost of living crisis, are forced to wait and see what happens to their jobs, their incomes and crucially their disposable incomes, in the midst of stubbornly high inflation and 14 consecutive months of interest rate rises.
UK Fitted Kitchens Market Report - Out of Date?
The JKMR UK Fitted Kitchens Market report is an annual report that highlights the key talking points for the UK kitchen industry and is often a good barometer as to the wider Kbb industry confidence levels.
However, recent press reports quoting the latest JKMR 2023 Overview Report on the UK Fitted Kitchens Market stated, ‘The Fitted kitchen market hits all-time high in value’ seemed somewhat out of date and not reflective of the events affecting Kbb industry confidence levels since the Lizz Truss' mini budget in September 2022.
For more on this Kbb News items see - Is the JKMR 2023 Fitted Kitchens Report reliable?
Kbb Confidence as seen by a German Kitchen Retailer
Shane Swift from there North West has been designing and retailing Schuller branded German kitchens for more than a decade and he has the following to say.
"I have been in the kitchen industry for over 20 years with over a decade as an independent retailer specialising in German kitchens and whilst the credit crunch was tough, the cost of living crisis has certainly felt much much worse, especially when it was preceded by a boost during covid."
Shane added, "In the independent Kbb retailer sector we have a good level of report with our industry peers and we share the same account managers when it comes to our appliance brands, worktops and the like. As such, we do talk a lot amongst ourselves and I personally know of several long standing retailers that have been forced to close their doors for good this year. It certainly feels much much worse then 2008-2010."
Kbb Confidence as seen by a Mortgage Broker
Big ticket home improvement projects are funded by a variety of methods, with home equity release mortgages being frequently used to fund projects over £25,000, where unsecured credit such as loans and credit cards have a ceiling.
Tony Higham is a Manchester based mortgage broker and aside from his regular mortgage business Tony has also set up an online bad credit mortgage broker service, specially aimed at people who want to conduct the mortgage application process fully online.
Tony said that "Whilst the mini budget and its fallout impacted interest rates significantly, there has been a substantial and cumulative knock on effect which has been growing steadily worse with each one of the last 14 monthly rate rises."
He added "Whilst I can still get clients rates for adverse credit mortgages to within 1% & 1.25% of the high street rates, the reality is that there are so few transactions coming into the market that the only mortgages being completed of late, are rate switchers. The market for equity release for home improvements is all be evaporated and its not just here in Manchester, but being felt across the entire UK."
The Housing Market according to Halifax Mortgages
Kim Kinnaird, Director, Halifax Mortgages, said “Market activity levels slowed during August, and while there is always a seasonality effect at this time of year, it also isn’t surprising given the pace of mortgage rate increases over June and July. While these did ease last month, rates remain much higher compared to recent years. This may well have prompted prospective buyers to defer transactions in the hope of some stability, and greater clarity on the future direction of rates in the coming months. The market will continue to rebalance until it finds an equilibrium where buyers are comfortable with mortgage costs in a higher range than seen over the previous 15 years."
Kitchens Kitchens Jeff Russell on Kbb Confidence
With over 20 years in the industry and 12 years writing Kbb news posts and speaking to a broad cross section of the industry regularly throughout the years, I have to say that the last 10 months [since the Truss mini-budget] have been some of the most challenging I can ever remember.
One can only hope that green shoots of confidence recovery are forthcoming shortly, perhaps if the Bank of England hold off rising the rates for the 15th consecutive month, given that inflation is heading back down and not a million miles from the end of 2023 target?
The way I see it is that once inflation has settled and the Bank of England slows or halts its one and only inflation battling weapon in interest rates, businesses and homeowners alike will have greater confidence in the year ahead of 2024 and those green shoots of business and consumer confidence should start to sprout once more and tempt those 'waiting and seeing' into pulling the trigger on those projects they have delayed during 2023.