According to new research by the Federation of Master Builders, more and more tradespeople are having to pass on the extra costs associated with price hikes on skips and diesel.
The study found that nearly two-thirds of builders have had to pass on the added cost of skips to their customers. This is after price rises which three-quarters of builders have reported to have seen over the past 12 months. In fact, in the past year, the average cost of a skip (8 yards) has gone up by £24. But, what does this mean for the project costs? Well, when looking at your average extension, this would result in an extra cost of £360.
Consequently, it was found that two-thirds have had to pass these costs on to their customers as three-quarters of builders have found these additional costs to be squeezing their margins.
It’s not just the skips either. The hike in diesel prices has also had a negative impact on the UK’s tradespeople as well. In fact, since the hikes, almost 50% of small and medium businesses have faced lower margins on their projects. To combat this, 17% have stated they’ve had to charge customers extra to cover this. A further 10% have had to cut down on how much they’re using their vehicle too. And, more than 1 in 10 have had to turn down projects that they would have usually done.
Why? Because they were too far away.
But what is being said about these hikes?
Well, the Federation of Master Builders Chief Executive, Brian Berry, described: “The increase in the price of skips and diesel is bad news for builders and homeowners alike.”
“Nearly two-thirds of builders have had to pass skip price increases on to clients and a fifth have had to pass on diesel price rises.”
“This has made home improvement projects more expensive for homeowners.”
“What’s more, the impact of the rising price of skips could have an impact on our communities through a rise in fly-tipping.”
“No matter how much the price of skips might increase, there is never any excuse for fly-tipping and any individuals found doing so should be severely reprimanded.”
“In 2016 and 2017, more than one million incidences of fly-tipping were dealt with by councils in England and the last thing anyone wants is for this number to increase.”
“The increase in the price of skips and diesel have come at a bad time for the UK’s builders.”
“The cost of doing business is rising more generally for construction firms.”
“Wages and salaries are all rocketing because of the ever-worsening skills shortages in construction.”
“What’s more, material prices have been rising because of the depreciation of sterling following the EU referendum.”
“Looking ahead, material prices are expected to cause an even bigger headache going forward, with recent research from the FMB showing that almost 90 per cent of builders believe that material prices will rise in the next six months.”
“We are advising builders to price jobs and draft contracts with this plethora of price rises in mind to avoid a further squeeze on already razor thin margins.”
So what do you think of this? Have you been impacted by these price hikes? Let us know in the comments below!