According to 70% of builders material costs are on the rise
By: James Newland
Material prices have increased due to the fall value of the pound as reported by 70% of UK builders.
According to research by the Federation of Master Builders SME’s have reported a 22% increase in Spanish slate and 320% rise in timber costs. The FMB believes that a quarter of all construction materials used in the UK are imported.
Thousands of smaller building firms are struggling with the rising cost of materials caused by the depreciation of sterling since the EU referendum. With the combined pressure of higher material prices and the rising cost of skilled labour represents a serious challenge for not only builders, but also homeowners, as the building projects will increase in price. This will also mean that consumers’ choice may be reduced as some homeowners face having to compromise on aspects of their project due to the fact that certain materials have become too expensive.
Due to material prices rising, this can have a problematic effect on construction SMEs having to cover themselves against sudden price uncertainties. For example, some builders are attempting to introduce larger contingency funds when pricing for a job, this could include implementing a contract which states that the overall contract price could change in the case of material price rises, making client budgeting more of a challenge.
Sources: Development Finance Today