A survey by industry body the Home Builders Federation, the construction finance provider Close Brothers Property Finance and the builders merchant Travis Perkins, has revealed that materials and labour shortages, as well as planning delays, will hamper efforts to increase housebuilding in the UK over the next year.
The Guardian reports that planning permission delays were cited by 94 per cent of small-to-medium-sized developers, while 78 per cent of housebuilders said that supplies of bricks, cement, and timber were the biggest issue, compared to 20 per cent a year ago.
One firm claimed that they paid £9 per sheet of oriented strand board, a type of engineered wood, but more recently that has soared to £32 a sheet. Another firm said that to be able to secure materials in short supply, they had to place bulk orders, which was a strain on finances that should be used elsewhere in the business.
Worker shortages and rising wages were cited by 59 per cent of builders as a major issue, compared with 19 per cent last year.
There has been a global supply chain crisis, which has exacerbated materials shortages, brought on by the COVID-19 pandemic, leading to congestion at ports and shortages of a wide range of goods, from building materials to cars.
The construction industry has also had to tackle a shortage of skilled workers as a result of EU citizens leaving the UK post-Brexit and an ageing workforce reaching retirement. The labour shortages have resulted in significant wage inflation, something that smaller firms are less able to absorb than larger builders.
However, the report did contain some brighter news, as there has been an increase in the number of apprentices employed by housing developers and housebuilders.
Around 60 per cent of respondents said they employed apprentices within their organisation, up from around a third of respondents at the end of 2020. Regionally, the north of England led the way, with 88 per cent hiring apprentices, with 59 per cent in the Midlands, and 52 per cent in the south of England.
Stewart Baseley, executive chairman of the Home Builders Federation said: “SMEs are literally having to put their businesses on hold whilst local authorities delay the start of construction as their planning departments don’t have adequate capacity to process applications effectively.”
He added that along with materials and labour issues, the delays in planning permission you’d threaten even more SME builders.
Many respondents believe that the planning process disadvantaged smaller firms in particular, as larger firms have the financial foundation to be able to absorb the costs of long and complex planning processes, and because councils make the planning process smoother for large housebuilders, as larger schemes enable local housing targets to be met more easily.
Frank Pennal, the chief executive of Close Brothers Property Finance, said: “The combined challenge of both labour and material shortages, rising costs and planning delays are a serious risk to the delivery of new homes across the UK.
“Developing homes takes months and years and while some of these issues might only be short term, they risk leaving a lasting legacy on the provision of new homes.”
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