The surge in demand for garden rooms over the last eighteen months or so has been both a blessing and a curse for the industry. Many new companies have seen opportunities in the market, and yet some reputable long-established names have ceased trading.
While demand for garden rooms has been at record levels, the impact of Coronavirus and the outfall from Brexit have had a significant effect on the material supply chain, and prices have risen significantly.
Installation costs have also risen, with increased demand for skilled teams resulting in higher pay rates.
This scenario could be a perfect storm for garden room companies that are not well managed / controlled / structured and don't have significant reserves. You need to be mindful of this when exploring your options and choosing a garden room company to work with.
A little background
Lack of production due to Coronavirus and delays in the supply chain due to border delays, has meant that all stock in the system has been used up, causing prices to rise exponentially with demand vastly outpacing supply.
Prices have also rocketed due to shipping price surge and lack of raw material and finished goods due to restricted production capacity with Corona isolations. There seems to be an inability to refill the supply chain at the moment and in the near future - and all in the backdrop of a booming post-Corona world.
Garden Spaces have systems in place to navigate these choppy waters
Garden Spaces are one of the longest established names in the garden room industry. Here at The Garden Room Guide, we have been featuring their work since 2009. You can explore the archive of articles we have written here. You will quickly see that Garden Spaces can design a wide range of garden rooms, from home offices to well-specified gyms, self-contained living annexes and school buildings.
We have been chatting with Roger Hedges, director at Garden Spaces UK Ltd, about how they are navigating this unprecedented market.
Roger Hedges:
"These are indeed choppy waters, but we run a tight ship with lower overheads than any of our competitors - if it doesn't add value, then it doesn't exist at Garden Spaces/Spaces Group. We do not have to pay for an expensive showroom network or warehousing, but rather we use our existing client base and carefully chosen quality suppliers who deliver direct to site just in time - every time (normally).
We have developed an industry-leading sophisticated computer business management system (BMS) over the last 2 to 3 years, that enables us to control many integral business parameters, including material prices, easily and rationally. I have also monitored the markets carefully, and I have foreseen most of what is happening in the market, and we have thus taken the necessary but painful steps to counteract the fluctuation in a timely manner. I have seen this several times before in my previous commercial lives before entering the Garden building business, and this experience has stood us in good stead.
The reality of all this, has meant that we have lost some business, and consequently our lead-times are coming back down to a more reasonable level. This is a blessing and a curse, as earlier this year, we had lead-times of close to 6 months, and now we are back to just less than 3 months. Consequently, although the first half of this year has been our busiest ever, it has been far from our most profitable with fixed contracts on longer lead-times and crazy material price increase driven by Covid."
Buy with confidence from Garden Spaces
Observing the garden room industry as we do, we are aware that a lot of new garden room companies have entered the market from a different sector, sometimes with a totally diverse background to design and construction. They have seen opportunity in the booming market and created some 3D renderings of garden rooms without actually having built one!
While every company needs to start somewhere, they often don't have large cash reserves behind them or the connections in the supply chain to ensure materials are available at the right time or the buying power to secure the best prices.
Industry experience and relationships, well-managed systems and forecasting coupled with maintaining sufficient funds in the business are required to navigate uncertain trading conditions.
Again, we have been chatting to Roger Hedges, and reassured by the measures Garden Spaces UK Ltd have in place:
"We offer deposit cover with every building with cover provided by HIP (Home Improvement Protection), and we have more than sufficient funds to cover all our creditors thrice over and still be sitting pretty with substantial funds gathered over many years, sufficient to weather any storm.
We have generated long standing positive collaborative business relationships with our main suppliers, and we always have 2 suppliers for all key components to support both healthy competition but also a more robust supply chain. At times like these we can call in hard earned favours, and make sure we get prioritised due to our ever growing order book, and our exemplary payment record.
We also have a long-established history of delivery of quality buildings, and this will continue for many years to come. We are pretty sure we are the safest pair of hands in the business!"
Key takeaways
Not all garden room company bosses are as open as Roger Hedges, acknowledging that current trading conditions are a mixed blessing. This results in them not having such well-thought-out systems in place or building up their cash reserves.
So it is important that you, the buyer take an objective look at the company you are choosing to work with.
You might want to:
- Work with a company that offers a deposit protection scheme. Deposit payments can be as much as 50% of the project cost, so it is wise to protect it. It is a good idea to check that the whole amount is covered as we have heard from some companies that there is a cap on the amount their insurer covers, which can be problematic if your project has a big price tag.
- Pay on a Credit Card, so you have protection from Section 75. The Money Saving Expert has an excellent guide on how this cover works. This cover seems to apply to purchases between £100 and £30,000. Not all garden room companies take Credit Card payments because of the transaction fee; if they do, they typically ask you to pay the transaction fee. It might be worth it for the cover you get, but that is for you to decide.
- Run a Credit Check to see what their rating is and advised credit limit. You can do this with services like Company Check. We have paid £20 plus VAT to check on a company. With the amount you will be spending on a garden room, this is a small cost.
To learn more about Garden Spaces work, visit their website. You can also chat with the team on 0845 387 9 387 or email them at info@gardenspaces.co.uk
