And what can we do about it?

I don’t know about you, but now, more than ever I can see and feel the pinch caused by the cost-of-living crisis. A splatter of financial and trade catastrophes have formed a perfect storm for many industries, and the UK Interior Design industry is no exception.

It’s not the cheeriest of subjects, but a necessary one to get your head around if you are planning a UK renovation or house move in the near future. At Studio Dean we don’t sugar coat anything (unless it is doughnuts). We pride ourselves on giving clients the absolute straight facts and numbers so they can make informed decisions with their eyes open. This way there are no nasty, budget-busting surprises.

Pour yourself a strong hot chocolate - you’ll need the sugar high - and buckle up as we take a look at the current situation for home improvement in the UK and how we are working around it as best we can.

HOW BAD IS IT?

My friends, it’s bad. It’s not impossible to renovate – don’t bin your mood board and delete Pinterest just yet – we get on to the silver linings later. But the fact is, it’s not great.

Materials are now on average, according to our data, 30 – 40% more expensive than they were in 2019. Sometimes this is even higher; for example a boring but essential bag of plaster was £5-6 and is now £10-12. Furniture costs have also risen - a mid-range 3/4 seater sofa was £1,980 and is now £3,140. This means that anyone who is revisiting a pre-covid renovation project quote is in for a massive shock.

In 2023 a typical full renovation of a four-bedroom house cost around £160,000 on just fixtures, fittings, white goods, materials, furniture etc. not including labour costs. We don’t want to scare people, but we have to be realistic.

The numbers you see thrown out on TV shows aren’t accurate. When the lovely Kirsty reveals it was £30K for the work on Love It Or List It, she is referring to the build cost only - most presenters do the same. A call out here to Tinie on Extraordinary Extensions for keeping it real here, his figures usually tally with reality way more! I love a game of guessing the finished cost as I watch. The £30K sounds OK, you start to think ‘hey we can do that’, until you realise that would leave you with a plastered out box with no floor, lights, paint or furniture - not quite what you wanted. Essentially anything not ‘screwed down’ is ignored in the name of accessible, relatable TV and this can lead to real-life disappointment.

These TV (and magazines do it too) myths mean we often sound like the angels of doom when we reveal budgets to clients, but our costings are always grounded in reality. We also include everything - light bulbs, grout, switches. sockets, cushion inners - all the behind the scenes stuff you need but probably did not add up. Our clients know a realistic estimate for their Northumberland or Scotland interior design project at the first design stage. We will also have specified items we call ‘The Dream’ and also the equivalent ‘Cost Effective’ option too so we can then work with them to look at options, prioritise and make sure they spend on what really matters to them, and save elsewhere. But the crux of it is, it is realistic, you have a real number in front of you up front and not an unrealistic expectation which will lead to disappointment,

We have years and years of data on product pricing and thought it’d be helpful to share some everyday items and their retail cost changes over time:

Cost increase (£)

*THESE COSTS INCLUDE OUR TRADE DISCOUNTS AND HAVE BEEN ADJUSTED AS WE HAVE MOVED FROM SMALLER PROJECTS TO LARGER TO ACCOUNT FOR THE BULK SAVINGS WE NOW MAKE.

WHY HAS THIS HAPPENED?

Although the covid-related supply issues subsided, the increased prices didn’t.
The rising cost of energy in the UK has raised manufacturing and delivery costs.
Brexit has made imports expensive, complicated and sometimes impossible as

manufacturers retract from the UK market - we’ve already lost some gems!

Labour costs have gone up significantly.
The cost-of-living crisis isn’t going anywhere soon.
Interest rates have made borrowing more expensive.

The problem is worldwide, but has hit the UK hardest due to the high energy costs and of course we would not be realistic if we glossed over Brexit which has caused real import issues and higher costs. Some EU companies and brands we used to rely on no longer import to the UK which limits the range we can offer. If they do still export to the UK, they have had to increase prices to cover the cost of importing.

HOW DOES THIS AFFECT INTERIOR DESIGN?

All of these issues are now filtering into interiors through all materials from metal fittings to tiles.

Let’s take wood as an example, the cost of wood is higher because it costs more to import from europe now and with only 12%* sourced outside of europe this impact is far reaching. Even if this is home grown wood, if we then want to turn it from a trunk into a product, the manufacturing and delivery costs are higher due to energy costs.

So either way those costs are higher, and in our industry so much is made of wood - that beautiful sofa upholstered in velvet has a wood frame base, your engineered flooring, those kitchen cabinets you painted in your favourite shade, not to mention all your furniture - side tables, coffee tables, dining sets and even many light fittings these days all contain wood, take, look around your house, it is everywhere!

As yet, there is no way around this, it is simply more expensive to import and manufacture so many things.

We also have the issue of people having to tighten their belts due to the cost of living plus the increased running costs due to energy prices in the UK creating a perfect storm and seeing many companies exit the UK market. Being honest, there weren’t a lot of UK producers to start with, now there’s even fewer. This was not an issue when there was free trade across the EU pre Brexit, but alas today, if they exit the UK there are large cost implications to import them back in. A couple of areas particularly impacted by this are:

The wonderful German kitchen market has been badly hit - oh we do love them for their quality and durability. They create great cabinets, hinges and all the unseen parts of a kitchen, but are struggling due to increased delivery costs.
The stone and tiles you see across many of our projects are usually made in Italy or Spain, we would usually import it and use UK manufacturers to work it to our specifications. Now, we are paying more for the same thing, and also more for the UK manufacturer to make it.

* https://preferredbynature.org/newsroom/what-brexit-means-wood-and-wood-products-trade

WHO IS AFFECTED?

Well in short everyone, but in different ways. Whilst some are seeing these issues stop projects, delay them or shrink them down, others with savings not debt are benefitting from the interest rate increase and growth of investments.

The first group is those who are relying on mortgages and financing to fund their plans. The cost of borrowing has had a huge impact on any home renovation, the cost in today's market vs 18 months ago is exponentially higher. Borrowing has been cheap for a decade and many people are highly mortgaged and the increased cost of the same borrowing is hitting hard. People who were going to borrow to renovate, are now not wanting to pay the interest rates so have simply decided to put their plans on hold or scale back. Not only has renovating become physically more expensive, it now costs more to borrow.

There are however people who have benefited in this market, purchasing under market value and factoring in the renovation costs to the purchase price. Those renovations are running at full speed, and because of the decline of the financed renovations, the huge demand for labour is abating and we are seeing those labour costs normalising.

We also have some people at a stage in life when they have benefited from the housing market in the last 30 years. Their house price has grown, and they’ve had an income surplus so have invested broadly, the returns on those investments have been very positive and now they are benefitting from their cash reserves and from interest rates. For them, although material costs are high and show no sign of returning they do not have the burden of interest rates. They are often moving to a time where they want to look at a ground up build or major renovation before they hit retirement and we’re on board with that journey.

WHAT ARE WE DOING ABOUT IT?

We are working with clients on decision making and budgeting to make their money work as hard as possible. There is a huge amount of both wealth and emotion tied up in property in the UK and we’re working with each client in their situation to make sure their choices suit them financially and from a wellbeing perspective too.

To help with overall costs we now, more than ever, look to combine our purchasing to one supplier, this works well to save on delivery costs and maximises discounts we can achieve. This now involves bulk ordering items for several projects, holding on orders until we can negotiate a discount through volume and building relationships with suppliers through open communications on how we can make things work for our clients and for them too.

We are also working really hard with local suppliers to keep them functioning in the local economy, benefiting the UK system and mitigating import taxes. We have relationships with some amazing people we have worked with for many years in the North East, Newcastle and Scotland and are pooling orders together to mitigate import tax on multiple deliveries. Handily they are doing much the same for us, advising if they have an order to a certain brand upcoming so we can place our orders in time and share the burden of the importing costs across more products so minimising cost per item costs. The great news is that in doing this we’ve actually been able to benefit from bigger discounts which we pass on in full to our clients.

What people read online isn’t realistic anymore as the budgets shown in many articles and even new projects being featured are based on the past three years and don’t show how things have rapidly changed. Just as we are doing in this blog post, we are trying to educate people. We create a cost per square metre for projects to give clients a realistic view of what they are going to spend and have a 100% open book policy on all orders we place for clients. Our no hidden markup promise has been in place for years, it just feels right to us to be honest and recommend what is right not what makes us the most profit, never more than now is this appreciated by clients.

IS THERE A SILVER LINING?

For us, our mission to help our clients buy for the long term and focus on quality over quantity is now resonating with property owners loud and clear.

There has been a marked decrease in the purchase of ‘fast fashion furnishings’, the buy it and throw it away culture just does not sit well with us. For years we have been the ‘boring’ one telling people to work out if they genuinely love it and need it before spending their hard earned money. Do not buy on a whim - walk away, sleep on it and if you still want it then go for it but the flippant purchasing for the dopamine hit of the past decade was something we had worked hard to deter people from, and it is finally stopping.

Through this, people have realised that the cost per use of cheaper, low-quality items doesn’t make financial sense and are purchasing for longevity. They have stopped regularly changing their home decor based on instagram-trends and are thinking twice about their flippant purchases. They are looking to buy from local suppliers, which we wholeheartedly support. We have always advocated this as we are so sick of social media trends making people spend money on things they don’t need.

WHAT DOES THE FUTURE LOOK LIKE?

The future of interiors will look more long-term, less trend focussed - hooray! The churn of renovating for social media likes will slow down, and people will realise how much stuff was surplus to requirement and start renovating for longevity, for themselves and to make their homes work beautifully, every day, for years to come.

WHAT IS OUR ADVICE?

Don’t go into a renovation flippantly. Go into it like you are investing in a beautiful piece of art and spend your money wisely, thinking of the future.
Budget. Use excel. Listen to people who are realistic about costs - even if it is hard to hear!
Plan your renovation, know where you are going in the long term then phase your home improvements and work gradually towards your long term vision.
Spend wisely on things that will be fixed in your home; put up with older furnishings until you have invested in wooden floors/stone tops / tiles etc…..
Make wise compromises.
Stop worrying about what other people have.
Work out what makes you feel rich and spend on that.
Don’t spend on what you can’t afford. Just spend on the things that matter.
Think of the impact.
Do it the right way, even if it is hard.
Drop the brands. don’t spend extra on names - dig deeper to find the true quality of items and ask for expert advice - we have worked on projects where we have reduced the cost of a kitchen from £83,000 to £52,000 just by dropping the brand name, with all the same finishes like for like. (Our blog post on How Interior Designers Make The Right Choices will help get you started.)

Studio Dean asks the questions you don’t want to hear the answers to, but need to know. Our job is to highlight the right decisions by showing comparable options. This is what makes hiring interior designers even more cost-effective now that times are especially difficult.

Stay savvy out there! If you need any interior design help, you know where we are.

Until next time,