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The UK water heating market will see a return to growth in 2021 after a 13% decline due to the pandemic, according to a new report from AMA Research.
New housebuilding was the most severely impacted of all the construction sectors by the pandemic during the first lockdown. There was also a decline in every non-residential end-use sector, but particularly in retail.
Between 2016 and 2019, the market for water heating systems had been growing at a steady pace – about 1-3% per annum – before a sharp fall in 2020 caused by the Covid-19 pandemic and its widespread impact on the construction sector.
The report predicts that the long-term future of the water heating industry will be shaped by increasing legislation and the drive towards net zero. For example, the Future Homes Standard, to be introduced by 2025, will require new build homes to have low carbon water heating. It is anticipated that homes built to this standard should have 75% to 80% fewer CO2 emissions than those built to current building regulations.
This is likely to impact on the type of hot water facility specified in new build homes. Heat pumps are anticipated to become the primary heating technology for new homes under the Future Homes Standard. Solar systems are also likely to be more widely specified.
Environmental factors that may drive the UK water heating industry include the development of energy efficient solutions and those that use renewable sources of heat.
Mains pressurised hot water systems will continue to replace traditional low pressure open vented systems in the UK. Installers are becoming more familiar with these systems, leading to them being used in a growing number of residential upgrades, particularly in larger homes with 2+ bathrooms. However, demand for combination boilers with no hot water storage facilities remains significant, particularly in smaller homes and apartments.
According to the report, the prospects for the UK water heating market in Q4-2021 are positive, with a strengthening construction pipeline of new work and RMI activity going forward. The market is expected to achieve annual growth rates of around 3% in value terms between 2022 and 2025, with a more settled economic outlook and the increasing demand for more intelligent, energy efficient solutions.
Abdul Tantouch, research manager at AMA Research, comments: “With the government drive towards net zero carbon emissions, there will be an increasing focus on renewable technologies, particularly heat pumps and solar energy. This development will have considerable impact on the type of residential and commercial water heating systems specified.”
A copy of AMA Research report, Water Heating Market Report – UK 2021-2025, can be purchased here.