Water Heating Market Report – UK 2023-2027 – New from AMA

Major changes are about to impact the UKs water heating industry, with a significant reduction in carbon emissions required to meet government Net Zero targets. The 5^th edition of the UK Water Heating Market Report 2023-27 represents an informed and up-to-date review of this evolving market and covers hot water storage systems, instantaneous water heaters and boiling water heaters & taps.

The UK water heating market has seen steady growth with many added value opportunities and new developments. These include the growth of mains pressurised unvented cylinders, the development of pre-plumbed solutions and cylinders specifically designed to work with renewable technologies. Demand for boiling hot water taps has also seen good growth and they are now regarded as a ‘must have’ appliance in many UK kitchens.

The UK water heating market rebounded in 2021, with a sharp increase in heating and hot water sales. This recovery was despite the ongoing supply chain issues post-Brexit, with a shortage of imported products and materials, increases in prices and longer lead times.

In 2022, demand for water heating products saw moderate growth of around 3%, indicating the impact of the cost-of-living crisis and high energy prices on market demand and level of construction activity. This was combined with continuing supply chain issues with rising material, component, and labour costs.

With the challenges currently facing the UK economy, we anticipate that the UK water heating market is likely to remain relatively flat in 2023, with a more positive outlook from 2024.

The implementation of the Future Homes and Buildings Standard in 2025 will specifically support growth of advanced water heating solutions in new build homes and commercial buildings. These include compact unvented cylinders designed to work with renewables such as heat pumps and solar. These technologies require a hot water store.

In terms of distribution, most water heating products are sold via the trade distributors (plumbers’ merchants, electrical wholesalers). The number of products sold via the internet has also increased in recent years. Other channels of distribution include direct sales from the manufacturer to the contractor, housebuilder, or OEM, also specialist heating companies and the home improvement multiples,

The prospects for the UK water heating market in Q4-2023 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 up to 4% in value terms between 2024 and 2027, with a more settled economic outlook and the increasing demand for intelligent, responsive and energy efficient water heating solutions.

Key Issues Covered in the Report

• An assessment of the effect of the cost-of-living crisis and challenges currently facing the UK economy. The impact on the UK water heating industry, including implications for manufacturers and distributors.
• Review and market development by water heating product sub-sector – hot water storage systems, instantaneous water heaters and boiling water heaters & taps.
• Assessment of key end-use applications – residential RMI, new housebuilding, water heating facilities in commercial and industrial buildings – with a focus on the specific sectors that offer the greatest potential for growth.
• Overview of the leading UK water heating manufacturers including company profiles and detailed financial summaries. Supply chain review including market map, main distributors, and key channels.
• UK water heating market prospects and influences 2023 to 2027 including recent products innovations and technological developments.

Areas of Particular Interest

• Changing legislation regarding the efficiency and environmental impact of water heating – including 2025 Future Homes and Buildings Standard, SAP11, and Interim Part L 2022.
• Increasing focus on renewable technologies, particularly heat pumps and solar energy, and the impact this has on residential and commercial water heating systems.
• Widespread use of mains pressurised systems, with growing demand for high flow rates, performance showering, multi-bathroom properties etc.
• The evolution of boiling water taps and impact this will have on the UK water heating industry overall.
• Product innovation and technological developments including renewable cylinders, compact solutions, self-sustaining systems etc.
• The growth of smart AI water heating controls in homes and commercial applications. The increased requirement for interoperability and remote control of intelligent systems.

Market Summary

• Market size by value 2018 to 2023, rates of change.
• Market overview by product sub sector. Imports and exports data.
• Market splits including mix by product type, type of fuel used.

Market Influences & Drivers

• Main influences that drive the water heating industry including detailed PESTLE analysis.
• Analysis including impact of war in Ukraine, changes in government policy and energy efficiency standards.
• Economic forecasts and impact on confidence levels.
• Lifestyle factors, variations in population demographics.
• Product innovations and the development of connected smart AI technologies.
• Growth of renewables, energy efficient solutions, eco conscious methods of production, etc.

End-use Sectors

• Summary of sectors driving demand for water heating products, market split by sector.
• Residential new build prospects and influences including housebuilding activity, mix by type of dwelling, self-build market activity.
• Residential RMI prospects and influences including growth in home renovation, ‘improve not move’ trend and mortgage affordability.
• Non-residential construction prospects and influences, new work activity and RMI output. Market split by sector.

Product Subsectors

• Hot water storage systems – market size by value 2018 to 2023 and rates of change. Household penetration and ownership by type of cylinder, analysis by sub-sector; >15 litres and <15 litres, unvented and vented, direct and indirect, renewable cylinders, thermal storage, pre-plumbed systems. End users, key suppliers, leading company market shares and profiles.
• Instantaneous water heaters – market size by value 2018 to 2023 and rates of change. Market splits – gas-fired and electric, multi-point and single-point. End users, key suppliers, leading company market shares, and profiles.
• Boiling water heaters and taps – market size by value 2018 to 2023 and rates of change. Market split – heaters and taps. End users, key suppliers, leading company market shares and profiles.

Distribution

• Review of distribution – map, key channels, developments. Company overview and financials of key trade distributors – merchants, electrical wholesalers, online specialists, etc.

Market Forecasts and Product Innovations

• Ten-year UK water heating market view 2018 – 2022, plus forecasts to 2027, rates of change.
• Ten-year market view by product sub sector to 2027 and rates of change. Summary of market prospects and influences.
• Product innovations and notable new product designs, also smart tariff management and use of DSR etc.

The Water Heating Market Report – UK 2023-2027 is available now and can be ordered here.

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