Market Trends of United Kingdom HVAC Industry
The Residential Sector is Expected to Witness Significant Growth
- The construction sector is vital in driving the demand for HVAC systems in the United Kingdom. With the increase in the construction of residential buildings, the demand for HVAC equipment and services is rising consistently in the country. According to JLL UK, in the United Kingdom, housing projects are expected to increase by 20,000 units in 2025 from the preceding year. Subsequently, this growth is set to accelerate, with new construction starts expected to surge to 220,000 by 2028.
- The market is driven by the vast number of immigrants residing in the country demanding new homes. Furthermore, the market is driven by government initiatives to provide affordable housing and fulfill the housing demand in the country. According to the National House Building Council, Southeast and London emerged as the leading regions for NHBC housing registrations in 2023.
- Population growth in the United Kingdom is fueling the demand for residential HVAC services, primarily through the need for new installations. The maintenance approach for residential HVAC systems in the United Kingdom leans heavily toward proactive and preventative measures to avoid potential issues. These measures include upkeep and rectifying various HVAC system components, such as addressing leaks and corrosion and ensuring optimal air distribution.
- The migration of people from rural to urban areas has surged, prompting government and private sectors to boost investments in housing, commercial construction, and infrastructure. This uptick in construction activities boosts the demand for new heating, ventilation, and air-conditioning systems. As per the UK government, housing benefits expenditure is projected to reach around GBP 15.6 billion in 2023/24.
Understand The Key Trends Shaping This Market
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HVAC Equipment is Expected to Hold Significant Market Share
- The UK government has implemented stringent energy efficiency regulations, such as the Energy Performance of Buildings Directive (EPBD) and minimum energy efficiency standards (MEES). These regulations encourage the adoption of HVAC equipment in new and existing buildings.
- In October 2023, the British government took steps to expedite the adoption of heat pumps. The government raised heat pump grants by 50%, from EUR 5,000 (EUR 5,795) to EUR 7,500 (EIR 8,692). Through the Boiler Upgrade Scheme, the government offers grants to incentivize the transition from traditional fossil fuel heating to eco-friendly options. Eligible replacements encompass air-source heat pumps, ground-source heat pumps, and, in specific cases, biomass boilers.
- By 2028, the UK government expects to have 600,000 heat pump installations annually. Furthermore, the United Kingdom is undergoing a green revolution in its heating and cooling industry owing to a notable upswing in the adoption of heat pumps, driving the demand for HVAC equipment. The UK government asserts that a significant portion of the commercial and residential sectors in the UK are viable for heat pump installations. The government analysis suggests that approximately 90% of homes in Britain possess the necessary insulation and electrical infrastructure to support a heat pump.
- Government subsidies in the United Kingdom significantly drive demand for HVAC equipment. For instance, in May 2024, the UK government introduced a subsidy program to accelerate the uptake of heat pumps in residential settings. This initiative, which quickly gained traction, offers a substantial EUR 7,500 incentive to homeowners in England and Wales. The grant aims to help the transition from traditional fossil fuel heating systems to more sustainable heat pumps.
