There are a number of issues that the construction industry has had to deal with that began in 2021 and are continuing into this year. There are two main problems affecting it – the increased cost of building materials and the shortage of skilled workers. This is not only causing a slow-down of new builds, but also affecting homeowners wanting to undertake renovations or extensions, as well as self build projects. The actual figures are astonishing, with the cost of building materials (concrete, timber and steel) having risen 23% last year. The rate of inflation for construction materials has risen by 10-15% over the past three months, putting it at a 40-year high.
There is a desperate need for more affordable housing in London especially, and the current situation is really slowing down the building of these new homes. There is so much pressure on councils and housing associations that the mayor Sadiq Khan has asked the government to increase their grant funding for affordable housing.
What Has Caused the Price Increase of Building Materials?
Brexit is partly to blame, as construction firms are complaining that since this happened, the cost of transportation has increased along with importation fees.
The main problem, though, seems to be the energy price hike. Energy bills have risen by a massive 54% this month. Materials such as cement, glass and steel are very energy-intensive to produce, making them now very expensive to buy and also causing a shortage of building materials in the industry.
The cost of everything is going up – inflation is rising at its fastest rate for 30 years as the cost of energy, fuel and food increase. This is creating problems for contractors, as building material suppliers are only willing to offer a quote for raw materials for 24 hours for fear of a price increase. And the contractors are unwilling to enter into fixed-price or long-term contracts in case they eventually charge their customers too little which would erode their profit margins.
The war in Ukraine is also having a significant impact. Due to sanctions on Russia, the supply chain has been disrupted, leading to price hikes in building materials. Other sources for raw materials need to be found urgently.
The shortage of coatings and paint has also been exacerbated recently by the new lockdowns in China. This will affect the availability of some products for the next few months.
How You Can Adapt
If you are planning a home improvement project, you will need to plan in advance as much as possible in case of shortages and more price increases.
People undertaking a self-build project will need to work very closely with their supply chain and communicate their requirements early with all the relevant suppliers and builders merchants.
Be wary of compromising on quality by choosing your builders just because they have offered you the cheapest quote.
You can also visit the Enviromate website, which is a source for finding cheap and even free leftover building materials.