Worsening material and labor shortages combined with planning delays will hamper efforts to increase housing construction in Britain over the next 12 months, according to an industry report.
Planning remains a major obstacle to increasing the supply of new homes over the next year, according to a survey by industry body Home Builders Federation, construction finance provider Close Brothers Property Finance and the builders dealer Travis Perkins.
Delays in obtaining building permits were cited as a problem by 94% of small and medium-sized developers.
Boris Johnson’s government has pledged to increase home construction to 300,000 new homes per year by the mid-2020s to tackle Britain’s chronic housing shortage. The 243,000 homes built last year were the highest number in 30 years, but the report questions whether the target will be met.
Seventy-eight percent of home builders said the sourcing and cost of materials such as bricks, lumber and cement was a huge problem, up from just 20% around the same time last year.
“In March we were paying £ 9 per sheet for 9mm oriented strand board [a type of engineered wood], and until recently we were paying £ 32 per sheet. Each product has increased, ” said one company that participated in the survey. Another said that in order to obtain rare materials, they must be purchased in bulk in advance, using cash that could be used elsewhere in the business.
Labor shortages and rising wages were cited by 59% of builders as a major problem, up from 19% last year.
The coronavirus pandemic has triggered a global supply chain crisis that has resulted in the lockdown of ships in ports and shortages of goods ranging from cars to bricks.
The UK construction industry has struggled with skill shortages for years due to an aging workforce, but the double shocks of Brexit and Covid have exacerbated these problems.
Many companies pointed out the shortage of Eastern European workers at the bottom of the trades ladder. Labor shortages have caused wages to rise dramatically, which small businesses are less able to absorb than large builders.
An estimated 800,000 people are employed in the UK residential construction industry, directly or indirectly, in the planning, design and construction of new properties.
The report contained good news: an increase in the number of apprentices employed by home builders.
Almost 60% said they employed apprentices in their business, up from just a third last year. Northern companies led the way, with 88% hiring apprentices, compared to 59% in the Midlands and 52% in the south of England.
Stewart Baseley, Executive Chairman of the Home Builders Federation said: “PME [small and medium enterprises] literally have to suspend operations while local authorities delay the start of construction because their planning departments lack the capacity to deal effectively with requests. Combined with concerns about materials and personnel, planning delays threaten the demise of even more SME builders.
Many of those interviewed felt that the planning process was at a particular disadvantage to small businesses, in part because large builders have the financial clout to absorb the costs of long and complex planning processes, and because advice makes the process easier. planning for large home builders because larger projects make it easier to achieve local housing goals.
Frank Pennal, Managing Director of Close Brothers Property Finance, said: “The combined challenge of labor and material shortages, rising costs and planning delays pose a serious risk to the delivery of new homes to. across the UK.
“Developing homes takes months and years and while some of these issues are short-term, they risk leaving a lasting legacy on the provision of new homes. “