Market data

22 Market data

Martyn Reed, Managing Director

Here at Elmhurst we collect and analyse data from many sources in the belief that it helps us make better business decisions. Turning this data into a digestible form takes time and requires a detailed understanding of context.

In each edition of Energy Matters we will provide you with a snapshot of this data, with a brief commentary, which we hope you find of interest, and maybe help you prepare for the future.

COVID-19 has obviously had a major impact on the construction, housing and energy assessment markets which is reflected in each of the charts. Some of the data related to new build homes within the devolved authorities has not been updated since December 2020 and estimates have been used.

Existing Dwellings

Volume of EPC lodgements and residential house sales on a rolling 12 month basis (by quarter).

n Volume of EPC lodgements on a 12 month rolling basis n Volume of Residential housesales on a 12 month rolling basis

Commentary

For the last five years house sales have been relatively consistent at around 1.19 million per year. Due to COVID the market fell away in March, but recovered by July and has continued to grow dramatically ever since. Volumes in the 12 months to June 2021 are 10% higher than the previous peak in March 2016, which was just prior to when stamp duty for buy-to-let purchases was increased.

The volume of EPCs peaked in the 12 months to May 2014, driven in a large part by ECO. This fell back sharply to a low of 1.2 Million in March 2018. Two years of recovery peaked again in February 2020 with year on year growth of 11%, largely due to minimum energy efficiency standards in the private rental sector. In March and April 2020 the volume dropped drastically, then tracked the residential sales until May 2021, when demand appears again to be softening which might be due to the end of the Stamp Duty discount in England.

Outlook

With the stamp duty discount coming to an end maybe the demand for EPCs will soften from a near time record. Fortunately as lockdown restrictions are eased other reasons to do an EPC, such as those for social housing, are likely to boost demand. Government initiatives, such as MEES, should also keep demand high.

New Build / On Construction

Volume of residential house starts and completions on a rolling 12 month basis (by quarter).

n Volume of residential house starts on a rolling 12 month basis n Volume of residential house completion on a rolling 12 month basis

n Volume of on-construction (new build residential) EPCs in the

UK issued on a rolling 12 month basis n Volume of Commercial property EPCs in the UK on a rolling 12 month basis n Non residential (commercial) property sales in the UK on a 12 month rolling basis

Data for Scotland and Wales is estimated since December 2020.

Volume of on-construction (new build residential) EPCs in the UK issued on a rolling 12 month basis.

Commentary

Starting before COVID-19, house starts have fallen back dramatically from their 204,000 peak in December 2018 to a six year low of 153,000 in September 2020. Fortunately since then starts have enjoyed a six months of strong growth and now stand at 170,047. House completions peaked at 214,000 in December 2019 but were then significantly impacted by Covid19. Recovery was slow for the remainder of 2020 but surged ahead in the first quarter of 2021. Volume of EPCs in the last twelve months fell to 246,000 from its peak of 300,000, flattened and then grew rapidly, tracking house completions, to reach 292,149 - just 5% down from pre Covid levels. Outlook

For several months it was concerning that house starts are so far behind completions with the obvious conclusion that this would impact EPCs in the coming months. Fortunately this situation is now correcting itself and starts have grown by 11% since September 2020, however this is still nearly half of the government’s 300,000 per annum target. As the demand for homes continues to be strong, and housebuilders start working on new sites, it is likely to remain a busy time for on-construction assessors. Non-Domestic/Commercial buildings

Non-residential (commercial) property sales in the UK on a 12 month rolling basis. Volume of Commercial property EPCs in the UK on a rolling 12 month basis.

Commentary

Regular readers will remember that last quarter’s magazine showed a very sorry set of graphs. Since February 2021 commercial sales have risen by nearly 20%, although still 25% down from March 2013 and 11% down from before the pandemic. The impact on EPCs has been similarly dramatic with the volume of EPCs recovering significantly in recent months but still 4% down on pre-COVID and 29% down on the heady days of December 2017. Outlook

We are all hopeful that the recent resurgence is the start of a trend but with continued uncertainty in the business community, hybrid working and problems in retail and hospitality caused by COVID, it is difficult to imagine that there will be any major improvements in the short term. However as an EPC is required whenever there is change of owner or tenant this may be some small piece of good news for energy assessors.

For further information about the services that Elmhurst Energy provides please visit: www.elmhurstenergy.co.uk