UK homeowners face higher renovation costs as builders grapple with rising material costs and a shortage of staples such as concrete and wood, faucets and roof tiles in a booming property market.
“It’s a bit like going to Sainsbury and having no bread, milk or eggs,” said Paul Bence, general manager of construction company Bence, of the runaway supply demand that is clearing the shelves. “Cement is our bread and butter and we would normally have a good supply of 10 days. We wouldn’t run a just-in-time model … but that’s exactly where we are right now. “
The overheating market for building materials has sparked widespread price increases of more than 10%, Bence said. He said the sharp rise means that builders who rate jobs months in advance have found themselves in the difficult position of having to go back to customers and say, “I have to raise the price of your job.”
The most recent snapshot of activity in the country’s construction sector, released on Friday, showed that April was another strong month for trading after companies reported the strongest pickup in activity since 2014 in March. However, the IHS Markit / Cips UK survey was in decline. Input cost inflation had risen to its highest level since the survey began in 1997 for the seventh consecutive month. The companies showed particularly strong increases in steel and wood costs.
Only a quarter of the materials used in the construction industry are imported, but the price increases in some areas are significant.
Wood prices have increased more than 80% in the past six months, while copper and steel prices have increased 40%, according to Noble Francis, economic director of the Construction Products Association.
The cost of paints and varnishes has increased by almost a third, while polymers such as polyethylene and polypropylene have increased by 60%.
Project costs would not increase by the same amount due to the high proportion of UK manufactured goods and the fact that home improvement is more labor intensive than in other construction sectors. “So it’s labor costs rather than product costs.” said Francis.
The supply problem is particularly acute for roofers as the lead time for concrete tiles has tripled to three months. As the prices of wood slats, steel beams, and plastic insulation went up, material costs rose by about 50%, said James Talman, executive director of the National Federation of Roofing Contractors (NFRC).
The pressure that roofers are exposed to is unprecedented in “living memory”, according to the NFRC. In a letter to members, they were told to “talk to your customers about price increases” and help them explain the complex nature of the supply problem to customers.
The production of building materials was severely affected by the original lockdown when many factories and wood mills closed. Since reopening, businesses have struggled to catch up as pandemic restrictions slowed production and global demand rose as economies reopened.
The problems arise at a time when the number of newly built houses is at its highest level in ten years and the banned British are transporting away money saved during the holidays and commuting to their homes. This year there has been no decrease, as the first three months of 2021, according to the Association of Builders, saw inquiries from local construction companies increase the fastest in a decade, with the demand for so-called “repairs” being strongest. Maintenance and Improvement “market.
There is also a labor shortage which means homeowners are waiting months longer than usual for bathrooms and kitchens to be installed due to insufficient fitters. Builders are also struggling to recruit bricklayers, carpenters, and even general laborers.
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John Newcomb, the executive director of the Builders Merchants Federation (BMF), said some contractors saw sales growth of up to 40% over the past year. “You can’t point your finger at anyone because so many different materials are currently having availability problems. People who have been in this industry for over 30 years say they have never seen anything like it. “
The pressure didn’t mean houses or schools “weren’t built,” Newcomb said, because small contractors are on the front lines of the crisis. “We fight hand-to-mouth to make sure the materials get through. It’s just that people have to wait longer and of course commodity prices go up so they have to pay more.
“The jobbing builder traditionally went to a dealer and said I want three of them and six of them. Those days are over, ”said Newcomb.
The same was true for do-it-yourselfers who wanted to buy paving stones or fence panels. “The most important thing is not to expect that you can show up at the door and just take these materials away, because that won’t happen.”