Having been confined to our homes for the better part of a year, it’s understandable why many of us are now keen to make the most of our spaces. From DIY projects to extensions, in the last year, Britain has been undergoing a building boom. However, as you may have spotted in the news, increased demand, the ongoing pandemic, and political issues have meant project costs are skyrocketing - with many people left shocked by the price tags.
As the UK’s leading architectural practice, it’s our mission to empower every homeowner to make the best decisions for their spaces, which is why we want to address what’s going on in the sector right now and what it could mean for your project.
It’s our estimate that the cost of completing a home improvement project has increased by 10-15% compared to this time last year.
To understand why these increases have occurred and to work out the next steps for your project, here’s a breakdown of the situation from our experts…
The cost of materials has significantly increased
The Office for National Statistics has projected a rise of 7-8% in material prices, with increases for certain materials, such as timber and copper, expected to more than double during the course of the year.
Some materials have also experienced such high demand recently that their manufacturing is behind. Last year, it was plaster and concrete most recently.
These price increases are being seen across the globe and are down to a number of factors.
- Construction demands remained consistent even during the COVID-crisis, resulting in high demand for materials
- Shipping is experiencing severe capacity issues, delays, and a sharp increase in costs
- Sawmills and other suppliers were forced to stop production during national lockdowns
- Both China and the car industry have scaled up their steel demands faster than anticipated
- Brexit and new trade restrictions have pushed up the cost of materials the UK imports from Europe, especially timber
This combination of factors has meant that we’re not only seeing a sharp rise in costs for materials, we’re also dealing with a shortage, with many industries (especially the home improvement sector) making big demands on already stretched suppliers.
Will costs be high forever?
While costs have increased, they will have to pull back in the future. Many companies will be using the market confusion to inflate prices but this is only sustainable in the short term. Eventually, we believe the market will be adjusted to lower these costs as many industries rely on raw materials being affordable.
Labour shortages in the UK
For UK contractors, shortages in the workforce are their biggest concern as it could impact prices by as much as 25% by the end of the summer.
Many contractors rely on European labour and the pandemic, coupled with Brexit, has led to understaffing for many companies.
As with materials, there are several issues compounding to make issues worse for homeowners.
- At the start of the pandemic, many migrant workers left the UK to be in their home countries and have yet to return
- Brexit and the end of freedom of movement has meant many won’t be returning
- The national lockdowns created a backlog of projects for contractors to complete at a time when demand is high
- The material shortages are causing project delays, exacerbating the capacity issues
Unlike the issues with materials, the problems with labour are harder to correct and may affect the UK for a considerable amount of time, unless proper government intervention is carried out.
What does this mean for my project?
Unfortunately, whether your project is big or small, these issues are likely to have an impact on both your timings and budget. Homeowners should be prepared to face delays in construction, as well as a significant increase in costs.
Many people map out their budgets during the architectural design stage and there can be a gap of several months between this and when it comes to getting a quote from builders. Therefore, it’s worth preparing yourself for these figures to be out of date.
If you're one of the many homeowners looking to improve their home in the near future, here are the options you might want to consider…
Delay your project
If you’re struggling to find a contractor or you don’t want to pay the inflated fees, you can always put your project on pause until these issues start to resolve.
The good news is that planning permission is valid for up to 3 years, so there’s no rush to get onsite, once your plans are in hand. However, you should bear in mind that because of the scale of these problems, it’s unlikely things will improve before 2022 and even then there is no guarantee that prices will dramatically reduce.
Commit sooner, rather than later
If you know waiting a year or two isn’t for you, then we strongly recommend you find a builder now, rather than put it off for a couple more months. Despite the challenges, many UK homeowners are still determined to see their projects through and this means available contractors are being snapped up quickly.
What’s more, you’ll find a good builder will be anticipating the current issues into their quotes and will be transparent about what contingency plans you’ll need to make in order to keep your project on track, no matter what happens in the sector.
At Resi, our Connect service introduces our customers to vetted contractors in their area. Jake, our Head of Connect, says: “While things feel a bit up in the air at the moment, we still have a number of high-quality professionals with space in their calendars. However, their diaries are filling up quick and waiting times have increased. If a homeowner is keen to keep things moving, I would say they need to start approaching builders as soon as they’re ready.”
Reassess your finance options
There are a number of different finance routes out there, so if you find yourself short on funds a specialist broker could help find you the right alternative.
With low interest rates and house prices continually rising, there’s plenty working in your favour in this regard, especially if you choose to utilise the equity you may already have stored in your home. In some cases, this financing route can be more cost-effective than relying on a pot of savings.
Our Resi Finance team are always on hand to provide free advice to any homeowner looking to explore different financing options. Not only do they have access to over 90 lenders, but they also work closely with our architectural experts, allowing them to stay abreast of issues that may affect your project.
To find out how much you could borrow, try our Resi Finance calculator.
Speak to an expert
All this bad news can feel rather scary, so if you would like to speak to an expert about any issues your project might be facing, Resi is here to help.
We provide free consultations to homeowners across the UK. Our dedicated team of experts can help you assess your options and provide clarity on the issues raised here.
Book a free consultation with Resi.
