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Timber frame increases market share as sales rise by £400 million

Timber frame sales have risen by £400 million in recent years, according to a new report from MTW Research.

It indicates that timber frame is the fastest paced sector of the UK housebuilding market and is gaining further share in 2018.

Based on 80% of the timber frame market, the research found that construction of timber buildings is set to top 60,000 units in 2018 with orders exceeding £700 million in value, whilst Brexit continues to alter the structure of the market.

The 230-page report depicts a tale of two markets, with timber housebuilding going from strength to strength, while commercial timber construction experiences more challenging trading conditions, though forecasts are positive for most key end use sectors.

MTW’s director Mark Waddy said: “The Government’s home building fund is set to generate 150,000 new homes from SME housebuilders, with timber frame playing a very significant part in this growth. This initiative, coupled with a rapid rise in overall housebuilding has dampened housebuilders’ purchasing power, underpinning the timber frame market’s profitability to some extent.”

The research points to timber frame reaching a critical mass in the next few years, with the technology increasingly being regarded as ‘mass-market’, rather than ‘the other option’. The market has experienced profit growth in 2018 with timber frame homes accounting for almost one third of the home building market in the next few years according to MTW’s forecasts, despite some uncertainties in the housing market recently.

Whilst the timber frame market strengthens, the report also identifies a number of threats including exposure to the risk of a slowdown in housebuilding growth impacting on profitability for the timber fame market. This is likely to result in a growing number of mergers and acquisitions in the next few years according to MTW. Vertical integration with housebuilders and distributors coupled with acquisitive share growth by timber frame suppliers may become increasingly important in 2018 and 2019.

The report also reviews the public sector housebuilding market, where timber frame usually accounts for a larger share of housebuilding. According to MTW, the lack of sustained investment in new-build social housing has dampened timber frame growth more recently but represents a substantial future growth opportunity for timber frame suppliers when, or if, the Government seek to address this decline.

The report reviews market share by open panel timber frame, closed panel, SIPs, post and beam and volumetric, finding that whilst each sector has distinct characteristics, growth continues to outpace inflation for most products despite Brexit.

However, raw material pricing pressure for some timber frame sectors are likely to impact the market in 2018 as inflation rises and the impact of Brexit continues to reverberate across the industry.

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