To wonder if my plumbing bill was a rip-off caused by a Private Equity "scam"

[RetiredMan]

In the past year or two, I needed the inlet valve for my cold water tank replacing. The two different plumbers I used pre-covid would have charged about £60 to do this, but they had both retired. Long story short, after speaking to three plumbing firms to get quote, I ended up paying £250 to get the job done.

I couldn't understand the price increase. This was the simplest job a plumber can do. It takes about half-an-hour, and based on what one of them said they charged for their time on their web-site, under £100 would have been nearer the mark. When I queried this with one firm, they said it was a fixed price for the task regardless of time.

Several months later I needed a toilet cistern inlet valve replaced. This is exactly the same job, fitting the same kind of valve to a plastic water tank, only the water tank is smaller. One of those same firms charged me £90 to do this, which was more like what I expected.

Recently on Youtube, I saw a video which explained that in the USA, private equity firms are buying up all businesses of the same type in local areas, then getting them to raise prices in concert. The businesses all looked like the long-established independent traders they had been while building up their local reputations, but behind the scenes, their prices were now being controlled by private equity firms.

I asked Google's AI if this kind of private equity activity was happening in the UK, and it said it was, but with care homes and childcare, not tradesman as such.

What do you think? Was I "scammed" by private equity? ("Scam" in quotes because it may not be illegal, though it probably should be.) If so, should the government do something to restore competition?

I think you're reading too much into it. Different places will charge different prices for different jobs, and as ever some places will be dearer than others.

Maybe you should have tried speaking to more than 3 plumbers if you weren't happy with the original price

I dont see the connection?

The UK is not the US. Why on earth do you watch US based YTs and say it’s happening in the UK too without any proof. Plumbing costs are high, it’s normal.

A simple job that you think would take half an hour usually isn't as quick as you think. Include travel time to and from the job. Also tradesman don't necessarily like 'quick easy jobs' as they can make it inconvenient for filling out the rest of that working day.

Small jobs like this aren't desirable and alot of tradesman don't think it's worthwhile so sometimes inflate the price to put off the client (if the client accepts the price then the inflated price is worth their while doing the job). Having said that the price could well be the going rate (tradesmen time isn't cheap).

You previously had the job done by plumbers for £60 who have since retired. I think that's a clue. Plumbers close to retirement happy to do a quick job for a little beer money. All you can do is 'collect more data points'. Ask more plumbers and with more quotes gathered you'll have a better idea what's a reasonable rate for the job.

Those prices were estimates from memory. I've now looked up exact prices from my financial records.

2015 I paid £60 for cold water tank valve replacement.
2018 I paid £82 for toilet cistern valve replacement
2023 I paid £288 for cold water tank valve replacement
2024 I paid £118 for toilet cistern valve replacement

So the question is, why is the £288 price such an anomaly?

Why do you think veterinary prices have risen so much? They are all being bought out by these investment firms.

Everything is an investment now and businesses are getting stripped for profits. It's horrible.

Sorry, the 2015 price above should have been £72, not £60. I left out the VAT.

Maybe with other businesses but not tradesmen- they are generally very happy to be operating as sole traders.

What this means is that they can price what they like- i.e. what the job is worth to them. DDad is a trademan and if he considers a job to be a pain or not big enough to be worth his while, he might bump the price to put the customer off and encourage them to go with someone else e.g. someone asking him to change a plug 90 mins away from home. He would rather focus on complex, longer jobs with less travel time as it’s more profitable so he bumps the price on the change a plug in the hope that the customer goes elsewhere. When they inevitably pick him, because he’s the only electrician that responded to 20 calls, he gets the bumped fee to make it worth the extra travel time.

If you're regularly needing that sort of thing doing I'd just watch a. YouTube video and do it yourself. I don't think we have needed one or other doing in over 20 years of home ownership, let alone twice in under 10 years.

Honestly, PE firms have no interest in small local plumbers. If you're interested, you'd be able to trace back ownership through companies house etc.

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We own a drainage firm, and this kind of job ins a pita. It ties up an engineer that we charge out at £95 +VAT per hour in hours, plus a drainage van, tools, etc etc. People don't want to pay commensurately for this kind of work because they see it as not taking long or requiring much skill etc, but the cost of the staff etc is the same regardless. So they quibble and complain, which leaves a bad taste in the mouth

Not sure if you know much about private equity / investment... but having sat both sides of it (I owned a business that received investment, and I have sat on the board of a company giving out investment) I would say that probably about the last business any VC / PE company would be interested in would be local trades...

They look for businesses which are scalable / can be made more efficient / more profitable - as they look to at least double their investment in 3-5 years.

Every investment carries an overhead in terms of time and energy / due diligence etc. by the investing company - so they prefer to invest less often but larger - it is tricky to get investments now below £2m - £5m

The idea that any would invest in small sole-traders whose paperwork is probably not up to scratch, and whose turnover is <£100k a year is to be honest so far from the truth that it is not likely to be happening...

I suspect that other reasons have driven the price increases - amongst other things, simply the fact that the market will pay the higher prices...

This what AI said. I didn't read it carefully enough, it did say it could be happing with trades.

Yes, reports suggest similar phenomena are occurring in the UK, where private equity firms are acquiring trades and services businesses, leading to increased market consolidation, potential price hikes, and negative impacts on service quality for consumers, according to articles and analyses from Trustnet and the Institute for New Economic Thinking. This is often seen in the care sector and among home services providers, with concerns raised by regulators and critics about the long-term implications of unchecked private equity consolidation on consumer prices and service standards, according to sources including the House of Lords Library and Brave New Europe.

Extra info, I am in London, and these are all local plumbers, who are not travelling out of their way to do the work. I also disagree with the "job too small" theory some people have. This is bread-and-butter work for plumbers, If they could do nothing but this type of job, I reckon they would. They could do several each day for circa £100 each time.

In any case, the question is what's with the £288 price? Maybe we'll get some plumbers, or their spouses, to comment on the thread.

Because they didn't want the job and £288 was the price that made it worth their while, most likely.

Little half hour jobs are a pain, because it means you can't then take on bigger, better paying jobs on the same day.

I think a few have indicated that it is quite common to charge more for a job that you don't particularly want (for the reasons I indicated). If someone is willing to pay enough to make it worth our whole then sobeit.

There's no single answer. Plumbing 'firms' may have higher overheads as they have admin staff and such like, it depends on the business structure. You'll probably find at the time you wanted the tank valve replacing (why did it only last 8 years or do you have multiple properties) they didn't have any 'filler' jobs for that half day so charged you for it rather than doing the job that took the full half day. The other problem is that if other firms/plumbers raise their prices, others have to follow suit so they don't lose work as a result of being the cheapest. Yes, that is a thing - give someone 3 quotes and they'll go for the middle one more times than not. I don't think that "private equity" has quite the traction in the UK tradesman market... yet. Maybe they really didn't want your business so hiked the price to make it worth the hassle (this is also know as the 'twat-tax').

A. You're not a plumber, so you don't really know whether they would want to do this job all day or not. It's been explained several times up thread why they don't like this sort of work
B. Do these jobs really come up all the time? And if they did, you have to factor in the time it takes to get to all these jobs, fuel for the van, sitting in traffic jams, parking fees etc. A whole day in the same place laying pipes sounds much more attractive.

I'm a spark, not a plumber, but what you say is true, a few of the medium sized firms round here have been taken over by bigger companies, one of which, Homeserv trades here and in the USA - I as a sole trader have been approached by one with an offer to join then and cease trading (not going to happen).

However the high quote phenomenon you describe can often happen with a job we don't want - often a small job that will inconvenience of be tricky to fit round bigger jobs. Some people chuck in a high quote in the hope it puts the customer off, but if they accept it gets done and the company wins, its not a scam, its up to individual traders what they quote and consumers if they accept.

You got 3 prices. That is a tiny sample.

Well did you use a private equity backed firm to do the plumbing task? Because if you didn’t, the answer is definitely no.

The trades are the hardest place for PE to drive prices up because of the low barriers to entry, but some people will pay more to have the comfort of a brand behind their tradie as there’s less chance of a cowboy (eg people to go more expensive Kwik Fit or Halfords instead of Bob the Mechanic - although I haven’t checked if either of these are PE backed, and I think Halfords is listed, but the point stands).

If you used Pimlico plumbers you might have paid more as they’re PE backed, but they have way bigger overheads than a one man band.

If the price of your cistern have gone up at the same rate as minimum wage since 2018 (which has increased by 55% in that time), you should actually have paid £127, so you in fact got a bargain and your plumber is now probably getting paid closer to minimum wage than they did the last time they came out.

Didn't really want the job, but would fit it in or sub it on to another trader and take a cut.

I would normally charge £50 to change a light fitting, but had someone request a quote whilst I was tied up on a re-wire, I quoted £150 in the hope she would go somewhere else, she didn't so I did the job over the weekend and got £150.

You sound somewhat obsessed with what is in the grand scheme of things a relatively small amount of money.

Trades can charge large amounts depending on how much they need the work, so you got three quotes which is the wise thing to do. If all three are quoting the same then that is pretty much the price you are going to have to pay, irrespective of whether the plumbing industry has been take over by green lizards or not.

If you want to minimise costs further it's always best to save up jobs and get several done at once. SIngle quick jobs tend to be more expensive relatively as you have to pay for the plumbers time to get to and from the job - it's much more efficient for them to do multiple jobs in the same place than one single one.

But that assumes they regularly get enough offers for this kind of work to be assured of filling a whole day with them, which they probably don't, because a lot of people do these simple jobs themselves. DH does this sort of thing at our house, and my dad and his dad both do it at theirs. If I hadn't married someone who already had those skills, I'd have got my dad over to teach me how to do it once I bought my own place.
For every job the plumber does, they need to drive over, even if it's just 20 minutes, then discuss the job before starting. Then after, they have to talk the customer through what they did, and do the paperwork. Doing all that multiple times a day, versus taking on one big job and doing it all just once makes makes this small work pretty unappealing for them.