One of the major things that will impact loft conversions all over the United Kingdom will be the completion of Brexit. Brexit itself will not do anything directly to slow down loft conversions over the country, but the negative economic impact that Brexit will have on the United Kingdom will. This is not a definite and there are many things that we cannot simply theorize about it, but the economic downswing and potential recession that leaving the European Union will cause is what I am basing this on. There are obvious a multitude of factors that are both variables and definite, and for all we know there might actually be a rise, but let me explain why if anything I think that many loft conversion companies will either be forced to merger, or close altogether.
With every recession, both housing prices and values will swing up and down. Depending on which markets crash and how unaffordable some things become, this is inevitable. With the free trade treaties going out of the window, things are going to become more expensive anyway.
Normal things such as daily living products like food and milk will raise prices slowly, and bigger things that are required for loft conversions such as wood and metal and other raw materials will increase quickly. This alone means that loft conversion companies will be forced to either trade at a lower profit rate than they currently are, or they will be forced raise prices for loft conversions altogether meaning that the average price of a loft conversion will go up. This alone will mark a huge impact on the loft conversion industry as I cannot imagine many people will want to convert their loft as much as they will do now.
The second most obvious reason for the loft conversion industry to crash is that the average customer will not be making as much net profit a year, having less money to be able to actually afford to have their loft converted. With an increase in prices, it will start to become unaffordable compared to those who can afford it currently.
This will mean the industry as a whole in every area of the United Kingdom will be effected, and many loft conversion companies will either begin to be priced out completely, or offer lower rates making their net profit margins drop drastically. Effectively, over time both companies and customers will become priced out of the loft conversion industry, making the industry as a whole shrink.
Good news for the loft conversion industry?
The one saving grace for loft converters though, are home owners who are looking to ramp up their property values and sell. Some will definitely benefit from the market crashes that we can expect to face, and because of this they will want to add living space within their homes. This living space will rise their property values and it will result in being able to sell their homes for added profit for their next property. A few of these customers can keep many loft conversion companies alive for a while, and that is what most should hope for.
I hope you enjoyed today’s guest blog post, and we have a few more interesting theories as to how we thing the loft industry is doing and where it is going! And if you haven’t gotten the chance, check out our recent posts too!