Category Archives: UK

Designing Homes for Multigenerational Living

Multigenerational living trend

Nearly 7% of UK households are multigenerational, the equivalent of 1.8 million households, and yet in the UK this concept is not well-understood and there has been little development of new home designs to suit the needs of families that would like to live in a multigenerational household.

Households are defined as multigenerational where there are three or more generations of the same family living together, or two generations of the same family living together, consisting of parents and one or more adult children (over the age of 25), or two generations of the same family living together consisting of one or more adult children (typically middle aged) and their elderly parent(s)

New research by The NHBC Foundation identifies a growing trend towards multigenerational living.  Their report, Multigenerational Living, An Opportunity for House Builders?,  analyses the scale and types of multigenerational households currently found in the UK and explores the experiences of British families living in this way.

Multigenerational living was also discussed with a range of house builders to understand their perspective on this market, in terms of their perception of both opportunity and risk.

The research provides evidence that challenges some myths about multigenerational living in the UK and suggests that it is not just ethnic minority families who choose to live in multigenerational households,  it is not just a response to care needs or housing affordability problems and it is not just about living in properties with annexes.

Key Findings

  • The number of multigenerational households in the UK has been increasing, driven by greater numbers of adult children (aged 25 or over) living in the parental home.
  • Four out of five multigenerational households in the UK are White British, although some ethnic groups (predominantly Asian families) are more likely than White British people to live in multigenerational households.
  • Multigenerational households tend not to be large and typically much smaller than often portrayed. Approximately one-quarter of households with grandparent(s) present contain three people, just over 20% contain four people and a similar proportion contain five people. Two-adult-generation households are generally smaller and are most likely to comprise just three people.  Average-sized homes with little or no modification may therefore provide satisfactory accommodation for many multigenerational households
  • Multigenerational households are most likely to live in three- or four-bedroom homes that they own, and the households, in general, are not living in poverty.
  • Multigenerational households predominantly live in ‘standard’ properties, and not all have annexes or extensions to accommodate household members separately

Requirements for Multigenerational Living

The research showed that, in terms of the design and use of space in the home, privacy is important but so is the ability to flexibly use any ‘additional’ space.  The best model included some shared spaces, open-plan dining and
an element of private space. For example, there needs to be space for interaction, such as family meals, but some privacy, such as separate rooms to entertain guests or watch television.

A limited number of bathrooms can cause tensions if everyone needs to be ready at the same time of day, so en-suites or multiple bathrooms were welcomed.

The flexibility to adapt properties over time to suit different family arrangements was welcomed. Such future-proofing might, for example, enable easy adaptation of a downstairs room (with access to a WC) into a bedroom.

Adaping New-Build House Designs for Multigenerational Households

A design review by The NHBC Foundation identified various existing common new-build house designs that are suitable for multigenerational households, or which could easily be adapted to be so.

  1. Suitable without change
    These are typically designs in which one or two bedrooms and a bathroom form a relatively separate suite of rooms on its own floor (typically the top floor of a three-storey house). These house types offer the possibility of immediate use of this suite of rooms, either by an elderly relative or by adult children, without any alteration or conversion of the existing plan.
  2. Adjustment of existing plan layout
    The second type of newbuild design identified by the review comprises houses in which the original plan offers a particularly large double bedroom, usually with an ensuite bathroom, often located above a double garage or a ground floor wing. In these cases the layout can often be changed to provide a self-contained space with a living room, double bedroom and ensuite bathroom, plus the option of a kitchenette.
  3. Opportunity to extend
    These are houses which offer the opportunity to provide a separate self-contained extension to the original house. Such homes might be marketed either with planning consent and designed to comply with Building Regulations, leaving the purchaser to engage a contactor to carry out the work, or as an ‘off plan’ option in which the house builder would complete the extension as part of the main work.
  4. Ground-floor alteration
    Where the existing ground-floor plan has a large bedroom or family room, this may be suitable for conversion into a self-contained living area with its own entrance.

NHBC Foundation Multigenerational Living

The full report from The NHBC Foundation can be downloaded here >>

Source:  The NHBC Foundation “Multigenerational Living, An Opportunity for UK house builders” Report

 

The Changing Shape of the UK Population

Lower birth rates and higher life expectancy is transforming the shape of the UK population, with the proportion of those of a working age shrinking whilst those of a pensionable age is increasing. 

Here we highlight how the UK population has changed, what has caused it to change and how it is projected to change in the future.

The largest ever UK population

In 2016 the population of the UK reached it’s largest ever, at 65.6 million.  This is a rise of 538,000 on 2015 and equivalent to a city the size of Bradford.  In fact the rate of the population growth has increased so significantly over the past 11 years that it has grown by over five million, when previously it took 35 years from 1970 to 2005 to make the same leap.

The UK population is projected to continue growing, reaching over 74 million by 2039

UK Population Size and Estimate

The chart shows the relatively high population growth during the ‘baby boom’ of the 1960’s, followed by slower growth in the 1970’s.  The population began to grow again in the late 1980’s when the 1960s ‘baby boomers’ were having children, echoing earlier growth.

More recent uplifts in population growth have generally coincided with an increase in the number of countries holding EU membership.

Natural Changes to the UK Population

Natural change is the difference between births and deaths. Over the past 60 years the number of births in the UK has been greater than the number of deaths, accounting for 35.8% of the population growth.

After the baby boom in the 1960s and the “echo” of baby boomers having children, births in the UK began to stabilise and have generally been between 700,000 and 800,000 since the mid 1970s.   The most recent peak was in 2012 when births reached 813,000, the highest since 1990.

UK Population Natural Change

The long-term trend in the number of deaths is more stable than the number of births, peaking in 1976 at 681,000 (the only year since 1955  when deaths outnumbered births) before steadily declining until 2011.

This decline is because people are living longer. More recently deaths began to slightly rise again, until 2016 when deaths decreased to 597,000.

The affect of net migration

The main driver of the growing UK population, particularly since the 1990s, is net migration, which accounts for 62.4% of the population growth.

Defined as the number of immigrants (people moving to the UK for more than 12 months) minus the number of emigrants (people leaving the UK for more than 12 months), the direct effect of net migration has increased the population by more than 251,000 people on average per year from 2004 to 2016.

This equates to an average of 52,000 more people per year than natural change for the same period .

In addition to this direct effect of migration on the size of the population, current and past international migration also has indirect effects on the size of the population as it changes the numbers of births and deaths in the UK.

UK Net Migration

Immigration has been higher than emigration since the early 1990s.  Rises in immigration have tended to coincide with the expansion of the EU, allowing more people to freely migrate to the UK.

In 2015, levels of immigration (631,000) were more than double those of emigration (298,000).  The highest immigration levels to date were seen in 2014 with 632,000 people coming to the UK.

Immigration has fallen with provisional data for the year ending 2016 (which included 6 months of data following the EU referendum) showing immigration dropped to 588,000, while emigration increased to 339,000.

Migrants tend to be aged 20 to 36 years, an age when people are likely to be working.

The UK population is getting older

As the population is growing, improvements in healthcare and lifestyles mean the population is getting older, with 18% aged 65 and over and 2.4% aged 85 and over.

The old age dependency ratio (OADR) has been increasing since 1996 and is projected to keep rising. This ratio is the number of people over 65 years old for every 1,000 people aged between 16 and 64 years old, and is a useful measure to understand how the balance in the population will change, particularly when planning for the needs of the different age groups.   In mid-2016 the UK’s OADR was 285.

The table below from the Office of National Statistics shows how the population is changing for different age groups; children (aged 0 to 15 years), people who are most likely to be working (aged 16 to 64 years) and people most likely to be retired (aged 65 and over).

 0 to 15 years (%) 16 to 64 years (%) Aged 65 and over (%) UK population
1976 24.5 61.2 14.2            56,216,121
1986 20.5 64.1 15.4            56,683,835
1996 20.7 63.5 15.9            58,164,374
2006 19.2 64.9 15.9            60,827,067
2016 18.9 63.1 18.0            65,648,054
2026 18.8 60.7 20.5            69,843,515
2036 18.0 58.2 23.9            73,360,907
2046 17.7 57.7 24.7            76,342,235

 

Life expectancy over the last few decades has been steadily increasing. Females born in 2015 can expect to live 82.8 years from birth, 4 years more than females born in 1991.  Males have seen a greater increase in life expectancy of 5.7 years, from 73.4 years for males born in 1991 to 79.1 years for males born in 2015.

The increase in life expectancy in the UK is projected to continue, with life expectancy at birth for females projected to be 85.1 years by 2026 and 86.6 years by 2036. Males are also projected to live longer, increasing to 82.1 years by 2026 and 83.7 years by 2036.

The structure of the UK population in 2016

There are a larger number of 69 year olds due to the spike in births after the end of World War 2, but the rapid increases in numbers of those aged 65 and over seen between 2009 and 2015 may be temporarily slowing as relatively smaller cohorts reach age 65

There are a larger number of people in their mid-40s to mid-50s due the effects of the 1960s baby boom and the children of the baby boomers can be seen in the higher number of people in their 20s.

The low fertility in the 1970s and early 2000s can be seen in lower populations of people in their late 30s and early teens

The group aged 20 to 37 years in 2016 has increased in size when compared with 2006, when they were aged 10 to 27 years; this change is thought to have been generated by the increased population through international immigration

The population by age was broadly similar for males and females in both 2006 and 2016. However at older ages women outnumber men and this is particularly evident in those aged 80 and over.

 

Source:  Office of National Statistics

Continued growth reported for the Kitchen Furniture Market

Kitchen furniture market

The latest market report by AMA Research highlights a 5% increase in the Domestic Kitchen Furniture Market for both 2015 and 2016, with steady growth predicted through to 2021.

AMA’s  ‘Domestic Kitchen Furniture Market Report – UK 2017-2021 analysis covers kitchen furniture, worktops and sinks, with furniture estimated to account for almost 80% of the market in value terms.  80% of furniture is now accounted for by replacements, a share which has steadily increased in the past, but has remained stable in recent years

Rigid (pre-assembled) kitchens are now the norm, according to AMA, and are increasing in market share.

Open plan living and the blurring distinction between kitchen and dining room are major factors affecting the market, with the move away from a functional form meaning accessory suppliers have had to develop added value, innovative storage solutions.

Curved cabinetry, soft-closing drawers, handleless doors, open display shelving, sophisticated lighting and additional electrical appliances are all highlighted as increasingly popular trends

High-gloss finishes, stainless steel, frosted glass, wood and metallic finishes continue to be popular, with combinations of materials frequently used to add interest. However, there are signs that softer finishes are growing in popularity.

An increasing number of manufacturers are also offering units, which suit the needs of elderly or infirm customers. This trend is likely to continue as the proportion of the UK population in older age groups increases.

Technological advancements in the tap sector, such as pull-out spray taps and water filtration systems, have also added value to the market, along with growth in the popularity of waste disposal units.

Forecasts for the next two-to-three years have been downgraded as a result of the Brexit vote, which is likely to lead to slower growth in the UK economy, price increases for imported raw materials and less confidence among consumers.

The domestic kitchen furniture market is forecast to show more moderate annual growth in the next few years of around 3%, before returning to stronger growth in 2020 and 2021,” said Fiona Watts of AMA Research. “In the short-term margins are likely to be squeezed further, particularly by the increasing cost of imported raw materials, such as chipboard, as well as metal components, such as aluminium and steel, while energy costs have also started to rise again, although they have been subject to some volatility in recent years.”

AMA note that the higher levels of new-build properties in both the private and public housing sectors will support growth in the kitchen market. However, the high proportion of flats and smaller houses may impact the average value of kitchen furniture installed in this sector.

The sale of kitchens with installation included is likely to increase, with multiples such as Ikea, B&Q, and Wickes, promoting this service strongly.

Source:  KBB Review and AMA Research

 

Trend Report: The Empowered Consumer

trend-monitor-empowered-consumer-2017-report

Consumers are changing, dismissing the old-style retailer values and demanding a new relationship with brands which goes beyond the traditional supply and demand model.

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Rapid advancements in technology and connectivity mean that today’s consumers can get what they want, when they want, where they want it. In turn, the consumers new-found control offers important opportunities for businesses. Technological developments have broken down many barriers, giving brands the opportunity to get closer to their customers and gain an improved understanding of their behaviours.

Trends never occur in isolation and this report joins the dots between the individual consumer trends and brings to you the ‘Empowered Consumer’; a new confident shopper who has increasingly sophisticated expectations.

We examine 5 key trends that make up the Empowered Consumer, assessing why each trend matters to brands and how they can benefit from it.

#1 Peer to Peer Influences
#2 Chameleon Consumers
#3 The Bargain Hunting Game
#4 Consumer and Co-creator
#5 Getting Personal

 

The 2018 edition of this report will be published in August 2018

If you are one of our Insight Partners, this report will automatically be added to your account

The Pet Pound

When planning a new kitchen, 12% of homeowners take their dog into consideration.  This is probably our favourite fact coming out of our recent research into kitchen purchase behaviour.

The humanising of pets, and in particular dogs, is a fast growing trend in the UK and research by Mintel has revealed some interesting statistics which show that humanising pets is a key theme running through the pet care industry, with consumers making adjustments to their daily lives to accommodate pets as part of their families. For example

  • 21% of pet owners either have used or would be interested in trying restaurants with special pet menus.
  • On average, British pet owners spend £34 on pet food and treats monthly. Thus expenditure on pet food could run at £405 a year.
  • The demand for travelling with pets is high; almost four in 10 pet owners feel guilty leaving their pet behind when they go on holiday.
  • A third of owners buy their pets a Christmas present.
  • Over a quarter of pet owners admit they like to pamper their pets and women in particular find it hard to pass by a new toy or a treat even if they did not plan on buying it (46%)
  • Half of people who own dogs or cats are interested in monitoring their pets while they are out with half of pet owners aged 16-34 interested in pet TV to amuse pets.
  • 7% of pet owners have bought clothing for their pets in the past 12 months.
  • Companionship (57%) is the biggest reason for getting a pet, and this rises further to 69% amongst people living on their own.

Source: Mintel

According to the Telegraph, Britains now spend approximately £450m each year taking their pets on holiday. A third of owners now holiday with their pet and spend an additional £126 on average to keep their pet by their side when they travel. This trend has led to the proliferation of pet-friendly hotels and holiday cottages, and companies such as budget airline, Ryanair, to announce that they are looking into allowing pets to travel in the passenger cabin.

Euromonitor claims the opportunities to capitalise on the humanisation of pets are vast and has identified three different types of cash-splashing pet owners:-

  • Mainsteam humanisers who account for about two thirds of pet owners, opt for reliable premium brands “that convey an indulgent feel”.
  • Anti-humanisers, who choose smaller, ethical brands over large corporations and are most likely to put their pets on wild, raw or organic diet, account for 20-30 percent of pet owners
  • Extreme humanisers, who make up roughly 5pc of pet owners, tend to be high-spending urban-dwellers who value status, fashion and exclusivity and see their pet as a personal accessory or a substitute for a child. This group are most likely to buy their pets designer outfits, crystal encrusted drinking bowls, exercise activities and extreme grooming treatments

With the dog population in the UK reaching 8.5  million and 24% of households owning at least one dog (Source PFMA), articles are being featured in many of the top interior design magazines such as Elle Decoration  showing readers how to do ‘pet-friendly and stylish at home’.

Changes in social behaviours are just some of the reasons behind this key trend. People are living in increasingly ‘dehumanized’ societies, there are more single person households than ever before, and owning a pet is a way of staving off the loneliness this creates.  Also, couples are delaying marriage and their first child,  and often chose pets to display their love and affection.

The USA has historically been the model which has led the trends in the UK pet care market and whilst the more conservative UK market may currently be outraged at the extent to which the US humanises their pets, it is a strong indication where the future lies for pets in the UK and the UK consumer will continue to spend more and more money on their pets.

 

Bathroom Purchase Behaviour, Consumer Insight Report No.1

Bathroom consumer insight

This market research study investigates how UK consumers approach the decision to purchase a complete new bathroom and the influences and barriers to sales.

Bathroom Consumer insight

Based on responses from 200 UK homeowners who had recently purchased a complete new bathroom, the study explores the following:-

  • where consumers do their research,
  • the way they plan and design the space available,
  • how they choose the individual bathroom products,
  • why they decide to purchase from a particular outlet
  • investigations into budget spend and brand awareness

“As brand awareness is low for bathroom products, consumers take extra time to search for information and evaluate the alternatives, comparing different features and benefits of bathroom products before making a decision to purchase. Understanding this stage is essential for any successful marketing strategy”

– Jane Blakeborough, Research Director

The report was written by J M Blake Associates which is now part of TREND-MONITOR

 

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KEY RESEARCH FINDINGS

  • The influence of the internet is important during the research stage with over half of the respondents starting their online research using a search engine such as google. Other online resources such as retailer and manufacturer websites are also high on the list of useful sources of research information. This influence diminishes, however, as the consumers move through the decision-making process and ultimately only 8% of the respondents eventually purchased from an online-only retailer.
  • There is a lack of interest in the design aspect of a bathroom refit and although 35% of respondents used a professional design/planning service, almost as many respondents (31%) preferred to plan their bathroom themselves. A further 20% of respondents kept the same layout as before.
  • The influence of friends, family and colleagues is evident, with consumers seeking advice and recommendations from their peer groups prior to purchase.
  • The dominance of the DIY outlets is obvious with 64% of respondents visiting a DIY outlet for research purposes and naming them as the most useful source of research information.  33% of respondents then went on to purchase the majority of their bathroom products from a DIY outlet.
  • The influence of plumbers and installers is consistent throughout the decision-making process, although not necessarily as a primary influence.
  • The independent and multiple plumbers merchants appear to have the least influence on consumers purchase behaviour, possibly reflecting the trade-bias of their business.
  • The bath tends to be the first product a consumer will chose when refitting their bathroom. Although the shower is used far more frequently than the bath, the space a bath requires and the dominance it has in the room makes it the most important item for many consumers.
  • Bathroom products tend to be chosen to match a house style and, when considering which bathroom product to purchase, our respondents primary influence is the style of their house above all other purchase influences.
  • Consumers prefer to buy all their bathroom products in one place and ability to do this has the greatest influence on their choice of purchase outlet.

 

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RIBA House of the Year 2016

RIBA House of the Year

The winner of the 2016 RIBA House of the Year award is Murphy House in Edinburgh, designed by Richard Murphy Architects

Murphy House

This is Richard Murphy’s own house in Edinburgh, which he describes as ‘a quarter Soane, a quarter Scarpa, a quarter eco-house and a quarter Wallace and Gromit‘ .  Revealed in the final episode of a special series of Grand Designs, presenter Kevin McCloud and the judging panel were impressed with the intricate mechanisms of the house which stood ‘like a futuristic bookend‘ surrounded by 18th-century houses.

murphy-house3

Build on a plot of only 36ft by 20ft, the 1,800sq ft house is on eight levels and is a triumph of space over size, packed with gadgets including automatic shutters, a bedroom with a hidden bath, walls that fold out and a bookcase with secret window panel.

Murphy House

Taking direct references from the neighbouring Georgian terraces, and with a clever change of scale, it is both deferential and powerfully striking in the street.  It is also a house that responds to the Scottish climate, opening up to the summer sun and then shutting itself down to create a snug retreat during winter, all the time with a wit and style that Murphy has honed over the years

The RIBA House of the Year is awarded to the best new house designed by an architect in the UK. The award, sponsored by Hiscox Home Insurance and Paint & Paper Library, replaces the previous title ‘RIBA Manser Medal’ which was created in 2001 to celebrate excellence in housing design.

Source: RIBA

 

Houzz UK Landscaping & Garden Trends Survey 2016

The UK’s love affair with their gardens continues, according to new research by online home renovation and design platform, Houzz.

Houzz revealed that 9 in 10 homeowners go big on their landscaping projects and are making substantial updates or complete overhauls, with over half (59%) prioritising outdoor living as the key influence in their overall outdoor project design

The 2016 UK Houzz Landscaping Trends Survey includes insights from nearly 1,000 UK homeowners using Houzz who are in the midst of, planning or who have recently completed an outdoor project.  The annual study found that the majority are updating structural elements (90%), outdoor systems and equipment (82%), and beds and borders (80%).  Due to the significance of these projects, over a third of outdoor upgraders are enlisting the help of a landscape contractor or gardener and/or landscape architect/designer for their projects (34%)

Garden makeovers are having a significant impact on British outdoor living, with 81% reporting that they spend more time outside as a result of the upgrades.  Homeowners are also relaxing (78%), eating (70%) and entertaining (67%) more in their new outdoor spaces.  Gardening is no longer the top use of outdoor space, however Brits now prefer to relax in their outdoor spaces (70%) ahead of tending to their gardens (65%) and enjoying family time (36%).

While having a garden that is easy to maintain is the top key functional consideration amongst UK upgraders (67%), outdoor living is the biggest design priority (59%), followed by having a stylish and beautiful space (51%).  As such, homeowners are buying comfort-enhancing outdoor products such as outdoor furniture (58%), BBQ’s (40%), fire pits (28%), patio heaters (13%) and pizza ovens (8%).  Of those who incorporate lighting, 80% say they do so to illuminate features and create a better ambience, whereas 71% say they want to create a more enjoyable and relaxing space.

“More than half of outdoor renovators spend five or more hours a week in their gardens, motivating them to invest in major features that transform the outdoors into additional living spaces” said Nino Sitchinava, principal economist at Houzz.  “Flowering plants, LED or solar lighting and hard landscaping in place of lawns are some of the popular choices that all help to support outdoor living”

Additional findings include:

New Home, New Garden – A recent home purchase is the top trigger of outdoor projects (41%), whilst many are responding to a deteriorated space (25%).  Others wait until the right moment, by either having the finances (24%) or the time on their hands (25%), before embarking on a desired project.

Projects Span all Budgets – When it comes to minor projects, the majority of homeowners budget or spend less than £2,500 (93%).  More substantial projects require higher budgets and 39% plan to spend or have spent above £2,500.

Paw Perfect ­- Outdoor updates which take pets into consideration are important, with 32% making pet-related upgrades.  Creating space for animals to run and play (27%) and planting toxin-free plants are most popular (21%).

Child Friendly – about two out of five outdoor renovators are making child-related updates (41%).  Practicalities such as space to run and play (44%), edible plants (25%) and fencing around the garden (24%) are prioritised.

Spring into Action – March and April are the most popular months for UK homeowners to embark on an outdoor project (22% and 16% respectively).  Planning begins 4 months or more ahead for the majority of outdoor renovators (67%)

A Plethora of Plants – UK homeowners are prioritising flowering plants during their upgrades, with flowering (71%), low maintenance (59%) and plants that attract wildlife, such as bees and butterflies (58%) being the top plant characteristics.

Lawn of the Dead – Homeowners with an existing lawn are making big changes to their green spaces, with 22% reducing their lawn size and 12% removing it altogether in favour of garden beds (54%), hard landscaping (48%) and outdoor structures (43%).

The full report can be downloaded at
http://info.houzz.com/rs/804-JLJ-529/images/UK-LandscapingStudy2016.pdf

The study was conducted online via the Houzz platform in March 2016.  n=923

Source:  Houzz UK

 

 

Spotted at 100% Design 2016

100% Design

TREND-MONITOR went trend-spotting at 100% Design in Olympia London which was held between 20 – 23 September 2016 to assess the latest trends coming out of the design industry.

As the largest and longest running design trade show, 100% Design is a key event for industry professionals in the UK and takes place each year in Olympia London.   First staged in 1995, the show is the commercial cornerstone of the London Design Festival, with over 27,000 visitors to the show  across the 4 days in September.  A diverse audience of architects, designers, specifiers, retailers and developers visit the show, as well as multi-national companies looking to source directly for their latest projects.

Here’s what we spotted ….

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Post Brexit Luxury Boom

Post-Brexit luxury boom

Luxury shoppers look to Britain for bargains as the value of the pound falls, but will the trend last?

The United Kingdom’s decision to leave the European Union after the 23 June referendum has had profound implications for many industries.  The reverberations of Brexit saw the pound drop to its lowest value in 31 years, while reports of banks and multinational corporations moving some of their operations overseas poured in as concerns about the UK’s future in Europe’s single market were realised.

But could there be a silver lining in the British Pound’s plummet?  JWT Intelligence think so.   Their opinion is that the UK’s luxury good’s market could see a spike as bargain-hunting luxury shoppers, particularly those from China, aim to capitalise on the fluctuating pound and the resulting falling price of designer goods purchased in the UK.

Online travel operator Ctrip noticed a 200% jump in clicks on its booking app for tours to the UK, while The Shanghai Spring Tour announced that almost all of their tour packages to Britain this summer have sold out. As the Guardian reported, many Chinese consumers have indulged in post-Brexit shopping sprees as Burberry coats and Louis Vuitton bags were amongst items to slump in price.

George Wallace, chief executive at London retail consultancy MHE Retail acknowledges that the pound is “low enough to move the needle a bit on the attractiveness of the U.K. to tourists in the short term.” Wallace anticipates a rise in visitors from China and the rest of Asia, along with the US and the Eurozone. “I think that…certainly for London, which is where most of the visitors come, and for luxury goods, there’s going to be a bit of a spike in business,” he adds.

Visit Britain, the country’s national tourism agency, adds that Chinese tourists are one of the highest spending groups that visit the UK, spending an average of £2,174 per visit in 2015.

Visit Britain also notes that British Airways saw a one third increase in US customers searching for flights to the UK on their website, in the days following the referendum. The chief executive of the European Tourism Association Tom Jenkins also agrees that tourists who were already thinking about a trip to the UK are more likely to visit while the pound is weak. “It will mean that [tourists] are likely to spend more money in the UK,” he says.

Wallace forecasts that luxury goods won’t be a bargain for long, however, as luxury brands are likely to increase their prices in reaction to the falling pound.

[Luxury goods brands] are not going to be happy to take an exchange loss in their British business,” says Wallace. “And what you’ll almost certainly see, if the pound stays low—which I think it will—is they’re going to gradually build in higher prices to compensate.”

Wallace predicts that luxury brands are likely to start building a price rise when the next new merchandise comes in, in around a year’s time. Wallace also predicts a further increase in the price of luxury goods in Britain, as the government looks for ways to increase revenues in the weakened economy. He suggests that raising VAT on luxury goods would be a politically popular way of doing that.

“If generally the economy is weaker, the government will take less in income tax, less in corporation tax. And they may have to cut corporation tax to try and keep business here,” explains Wallace. “So it’s very possible we could see an increase in VAT [for luxury goods].”

Source:  JWT Intelligence