Seven out of 10 builders have seen an increase in material prices due to the falling value of the pound and this in turn is hitting the pockets of homeowners, new research has revealed.
In the latest Federation of Master Builders (FMB) State of Trade Survey, 232 SME construction firms were questioned, with 70% reporting materials price hikes. The FMB states the rising prices are inevitable due to the depreciation of sterling because around a quarter of materials used by the UK construction industry are imported.
Sarah McMonagle, director of external affairs at the FMB, said: “Thousands of smaller building firms are grappling with the rising cost of materials caused by the depreciation of sterling since the EU referendum.
“More than 70% of smaller building firms have experienced increased costs as a result of the weakened currency, with additional increases of 10 to 15% expected as the new year unfolds.
“Anecdotally, construction SMEs are already reporting an increase of 22% in Spanish slate and 20% increase in timber.
“A quarter of all materials used by the UK construction industry are imported – this is significant and underlines the vulnerability of the industry to sudden fluctuations in the strength of our currency. The combined pressure of higher material prices and the rising cost of skilled labour represents a serious challenge to builders.”
Consumer choice may also be reduced as homeowners face having to compromise on aspects of projects because materials have become too expensive, with builders having to quickly re-evaluate the price of jobs, she added.
She concluded: “What this means is that homeowners could start to see the cost of their building projects increase.
“There is also an added headache for the builder, as material price rises can come at short notice and if they are mid-project, the original costing is no longer accurate. This makes pricing jobs problematic and leads to construction SMEs having to cover themselves against sudden price swings.”