Apparently, soaring material prices are squeezing the margins of small building firms within the UK. And according to new research, almost a quarter of firms have had to pass on these prices to their customers.
But what is to blame for these soaring material costs?
Well, apparently, it’s Brexit.
Due to the decline in value of Sterling, the Federation of Master Builders (FMB) feel that this has had a direct impact on a range of materials. Not only that, but there has also been an impact on growth within the construction sector too with figures revealing that prices have risen at one of the sharpest rates since 2011! July also revealed the weakest construction performance since August 2016 as well.
According to an FMB report, the price of timber has increased the most. Following this was insulation, bricks, blocks, windows, plasterboard, boilers and radiators.
In response to higher material prices, 85% of builders believe that this could result in customers hiring rogue traders in order to try and save money. 32% have also revealed that their margins have been squeezed in relation to the price hikes too and 22% have had to pass these extra costs onto their customers. One in ten builders have even ended up making losses on their projects due to rising costs.
The Chief Executive of the FMB stated: “material price increases have left builders under severe pressure.”
“This research shows that following the fall in the exchange rate, timber is the material that the majority of builders say has increased most in price but the problem doesn’t end there as everything from insulation to windows to bricks and blocks are soaring in price.”
“Perhaps unwisely, some builders are absorbing these extra costs as opposed to re-quoting for the project.”
“But material price spikes aren’t just a problem for builders.”
“They’re also a problem for the home owner, with almost one-quarter of builders saying that they have had to pass on price increases to their clients.”
“This means that building projects now cost significantly more than they did this time last year.”
“What with stagnant wages and price inflation across the economy, consumers are feeling the pinch and it might be that they decide not to commission that loft conversion or extension after all.”
“Worse still, 85% of builders believe that homeowners will be tempted to hire rogue traders who are quoting a lower price than a professional building firm such as those that belong to the FMB.”
“If that’s the case, material price rises could lead to a flurry of botched jobs and distressed consumers.”
So what do you think of this? Have you been impacted by rising material costs? Let us know in the comments below.