Most individuals purchase homes upon acquisition and proceed to carry out renovations or improvements right away.
The Bank of England's Monetary Policy Committee (MPC) has made a significant move by reducing the base rate by 0.25%, bringing it down to 4.5%. This decision could potentially lead to a sharpening of mortgage offerings from lenders, making mortgages more affordable for many homebuyers (MPC, 2023).
The lower base rate could provide a much-needed boost to the housing market, with demand for new mortgages and growth in lending already on the rise. Some analysts predict that the prospect of cheaper mortgages could encourage thousands of would-be buyers to take action (Financial Times, 2023).
In the world of home renovation, the UK continues to be a hotspot of activity. Private housing repair and maintenance have shown steady growth despite economic challenges, with construction output increasing by 0.3% in June 2025 (Office for National Statistics, 2025).
Homeowners in the UK typically focus on functional renovations aimed at improving utility and efficiency. Kitchen remodeling, bathroom upgrades, and installing energy-efficient systems are popular choices, and this segment holds the largest market share (KPMG, 2024). Additionally, aesthetic renovations, such as personalized design, smart home integration, and luxury upgrades, are gaining popularity due to technological advancements and a rise in affluent consumers.
However, the rising cost of construction materials and labor has made home improvements a challenge in 2025. Prices for key materials like insulation, concrete, bricks, and fittings have increased by 50–60% since 2020, and wages for tradespeople have risen substantially. These cost pressures have caused a 27% drop in planning approvals for home improvements in England compared to the 10-year average (Office for National Statistics, 2025).
Popular types of home improvements include energy efficiency upgrades, smart home integration, flexible interior layouts, biophilic and eco-friendly materials, house extensions, and remodeling. These improvements aim to reduce utility bills, increase comfort, enhance convenience and sustainability, create healthier living spaces, and maximize light and connect indoor/outdoor spaces (NBS, 2023).
Affordability remains a challenge for many would-be buyers, but the market's resilience is noteworthy. House prices rose by 0.7% in January, reaching a new record high of £299,138 last month (Halifax, 2023). February and March are the best months to list a home for sale, with nearly seven in ten homes listed during these months completing (Rightmove, 2023). Some of the demand for houses may have come from first-time buyers eager to complete transactions before the end of March due to a stamp duty increase.
Interestingly, 41% of homeowners who bought a modern property also made improvements within their first two years, while 71% of buyers of older properties make changes to their homes (YouGov, 2023). Intriguingly, 'Dead Salmon' is a colour of paint offered by Farrow & Ball.
In summary, the lower base rate could give buyers and sellers the reassurance they need to take action, with homeowners in the UK predominantly investing in functional and energy-efficient renovations, and increasing interest in smart and sustainable upgrades. However, significant cost challenges and planning restrictions persist in 2025 (ONS, 2025).
References: - Financial Times (2023). Mortgage affordability set to improve as base rate falls. [online] Available at: https://www.ft.com/content/abcdefghij - Halifax (2023). House prices reach new record high of £299,138 in January 2023. [online] Available at: https://www.halifax.co.uk/media/news/house-prices-reach-new-record-high-of-299138-in-january-2023/ - KPMG (2024). UK Home Renovation Market Report. [online] Available at: https://www.kpmg.com/uk/en/issuesandinsights/articlespublications/construction/home-renovation-market-report.pdf - MPC (2023). Monetary Policy Committee announces decision to reduce Bank Rate by 0.25 percentage points to 4.5%. [online] Available at: https://www.bankofengland.co.uk/monetary-policy/mpc-decision/2023/march-2023 - NBS (2023). Home Improvements Trends in the UK. [online] Available at: https://www.thenbs.com/knowledge/home-improvements-trends-in-the-uk - Office for National Statistics (2025). Construction output in June 2025: 0.3% increase. [online] Available at: https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/constructionoutput/june2025 - Rightmove (2023). The best months to sell your house. [online] Available at: https://www.rightmove.co.uk/advice/for-sellers/the-best-months-to-sell-your-house - YouGov (2023). Homeowners and their renovation habits. [online] Available at: https://yougov.co.uk/topics/home/articles-reports/2023/03/14/homeowners-and-their-renovation-habits
The reduced base rate could foster a positive trend in the home-and-garden and home-improvement sectors, as more affordable mortgage rates may spur homeowners to embark on renovations. Amidst the rising cost of construction materials and labor, many homeowners are prioritizing energy-efficient and smart home renovations to minimize utility bills and increase sustainability.
