Self-builders, building contractors and developers, as well as owners who need work on their properties, have been hit hard by the rising cost of materials. The problem started during the pandemic as Covid wreaked havoc on production and transportation and just as a recovery attempt was underway the impact of the Russian invasion of Ukraine and soaring prices energy caused another setback.
Kristoffer Hudson of Turner and Townsend, Leeds, who specializes in estimating and controlling costs for developers, says the Building Cost Information Service, part of the Royal Institution of Chartered Surveyors, estimates that the combined costs of construction rose 10.4 percent. cent year-on-year in the last quarter of 2021. However, he adds that this overall figure masks huge increases in the price of materials, including sawn timber, which rose 88.5% year-on-year.
Particle board and structural steel increased by 73% and 69.1% respectively. The price of plastic doors and windows increased by 21% and that of paint and concrete blocks by 18.2%, while that of bricks, tiles and slabs increased by 7.8% and that of doors and 6.3% wooden windows.
“Recent events in Ukraine have amplified pre-existing issues,” says Kristoffer. “High energy prices are a major concern, adding to the current weight of inflationary pressure on housing construction costs and rising building material and component prices in the UK.”
He points out that pressures on energy prices in the UK were already building following a global squeeze on supplies before the Russian invasion of Ukraine made the problem worse. There are also concerns about the short to medium term impact the Ukraine conflict could have on an already strained UK supply chain and existing material shortages. While only 1.2% of all building materials imported into the UK come from countries at war, the UK still depends on a number of them.
According to the Department for Business, Energy and Industrial Strategy, Russia and Ukraine supplied the UK with 13.5% of all concrete rebar needed, 9.3% of building materials. asphalt, 6.5% of laminated wood, 6% of all flat glass and 5.1% of all sawn wood less than 6 mm thick.
Kristoffer Hudson says, “Many manufacturers and builders could pass on rising costs to customers as margins are squeezed, resulting in more expensive homes and more expensive renovations and extensions. The net effect of recent market pressures is higher prices, which could also result in the postponement and cancellation of projects due to affordability constraints.
Andrew Wooler, of Keighley-based building contractor and award-winning family developer RN Wooler, says labor costs have also risen. “When Covid receded, there was pent-up demand for labor and its prices rose” Now the war in Ukraine is affecting energy costs and the production of cement, concrete, steel and glass depends Energy. Fuel costs and the war have also impacted the price of wood as some comes from Scandinavia, Canada and Russia.
Andrew estimates that plywood has increased by 15%, softwood by 10% and insulation by 20% in the past year and says that the rising price of construction is a major concern for contractors who agreed construction costs with developers before inflation set in. hold.
Brian Berry, Managing Director of the Federation of Master Builders, says: “Builders are suffering from rising material costs. “Continued supply chain disruption, alongside growing global demand, has created volatility in the price and availability of building materials. BKW’s latest member survey found that 95% of local builders reported material price increases in the last quarter of 2021, with 74% having to increase the cost of their work.
“The Russian invasion of Ukraine will only exacerbate these difficulties in the coming months, as supplies of vital construction raw materials such as copper, oil and aluminum are expected to be disrupted.
“At a time when the cost of living is soaring, the situation puts manufacturers in the unenviable position of having to increase costs for customers who must tighten their belts. One way the Government could help would be to delay the planned end of the red diesel rebate, something that was missing from the Chancellor’s spring statement.
The Royal Institute of British Architects says Brexit is also creating problems, including a lack of HGV drivers and a shortage of construction workers, as well as delayed shipments of materials from overseas.