For many sectors, unsurprisingly, there is a positive correlation with the housing market. When sales increase so too does demand for home improvements, home furnishings, new subscriptions and suppliers such as changing utility provider, upgrading home tech, conservatories and even more mundane things like new drain pipes, flagstones and grass seed amongst others. In fact research shows that almost a quarter of homemovers make a significant investment in their new home outside of the purchase price and in general home movers spend more than £12 billion a year, over and above the transactional value of their new homes, equating to three percent of GDP per annum.
It stands to reason, therefore, that the current property boom; Lockdown 3.0 notwithstanding, is good news for the economy. And the news gets better following the most recent budget where the Chancellor announced an extension of the Stamp Duty Holiday. The tax break will now continue until the end of June. After that the nil rate band will be set at £250,000 - double its standard level - until the end of September. This is significant as the Stamp Duty Holiday has been widely credited for the buoyancy of the property market and there were fears that a failure to extend it would see a sharp increase in fall-throughs, which in turn would have a knock-on effect on consumer spending.
Last year was a record year for home sales with the number of transactions unseen for over a decade. Our most recent Property & Homemover’s Report (Q4 2020) shows that over 1.5 million UK households are currently wanting to move, moving soon, moving now, just moved or are settling in to their new home. This is a 20 percent uplift year-on-year.
New instructions have remained stable and sales agreed have increased by 11 percent since 2019. Exchanges are currently marginally down as a result of COVID restrictions and demand for conveyancing outstripping supply, but a rush of completions is expected over the coming months as movers try to meet the stamp duty holiday deadline.
Engaging with valuable customers
The latest report also showed that price changes and withdrawals are also down. Unsurprisingly, detached houses are seeing the most demand, with four and five bedroom houses with outside space recording the most sales. By contrast, one bedroom properties have experienced a decline in sales agreed.
House prices have risen with the average asking price now standing at £375,000. The Midlands have experienced the highest surge in asking prices seeing a 12 percent rise. Conversely, Inner London has recorded the lowest increase at just two percent, reflecting the national desire for more space as a result of lockdowns and the need to work from home. This also reflected by the rental market with the sector softening significantly over the last 12 months with the demand for urban living and short commutes replaced by more flexible locations.
So why do all these figures matter?
Understanding who is moving house and the current trends in terms of location and type of house is important as it means that organizations can better understand and engage with this segment of extremely valuable customers. Currently, our Homemover Wave Tracker shows that the surge in property sales has also resulted in an increase of people that say they ‘want to move’ – up 27 percent since 2019. This category now stands at over 380,181 households. Those in the ‘moving soon’ category have also increased by 32 percent over the same time frame, equating to 341,195 homemovers. There has also been a 47 percent increase in households Moving Now and a 26 percent rise in those households that have just moved. These positive figures illustrate the opportunity that exists for the many sectors that are attractive to homemovers.
The power of data
However, in order to capitalize on this, the key is understanding when best to target these households. Too soon and you risk irrelevance, too late and you potentially lose out to another organization. Each sector has a different lifecycle and customer journey. Take the window industry, given that the typical transaction size for glass products is high it is critical that organizations track this homemover journey from the wanting to move phase through to the final settling in phase. Behaviors within each of these phases is predictable and can be tracked meaning that it is possible to create tailored marketing approaches for each stage of the journey. For instance sending an inspirational direct mail pack to people that are thinking about moving. The pack could be a soft sell explaining the value that can be added to a property through the addition of new windows, doors or a conservatory.
This can be followed up with a more direct sell the moving soon stage; perhaps a brochure showcasing the actual products. Conversely, for utility providers understanding if customers are moving house is important as it means that they can engage with this segment of customers and encourage them to remain loyal. In the utility sector moving house is the main cause of customer churn, so being able to stop even a small percentage from switching makes a difference. On the flip side, there is also of course an acquisition opportunity – we know that a third of movers change utility providers so then there is also the potential to target homemovers that aren’t already existing customers proactively with compelling new customer offers.
What is clear is that making contact at the time when purchasing decisions are being considered and made will ultimately lead to incremental revenue and more customers on the database for future home improvements. The power of data has long been understood. But as we move out of lockdown and many organizations are looking to ramp up their marketing activity in order to recoup lost profits during lockdown, data has never been more important – particularly this type of data which provides organizations with a cohort of customers that actively want to buy.
Colin Bradshaw, Chief Customer Officer, TwentyCi