25 Sep Rising Material Costs; What You Need to Know
Raising material costs.
If you are remodelling your home or considering doing some construction shortly, you will want to be aware of the current state of the materials market. Unfortunately, prices for many building materials have steadily risen over the past years and show no signs of stopping anytime soon. This blog post will take a closer look at why prices are rising and what you can do to stay ahead of the curve.
Materials supply chain
The rising cost of materials is a cause for concern for many builders and construction companies. While timber prices have been steadily increasing for years, recently, the price has stabilised. The main reason is the declining availability of wood and other materials during the Covid19 lockdowns. As demand for materials has grown worldwide, with America and China buying most of the supplies, we are struggling to buy enough. The weak pound has also made it difficult for builders to purchase materials at competitive prices. In addition to the cost of materials, builders also face increased labour costs. The shortage of skilled labour has made it difficult to find workers, and those who are available often charge higher prices. As a result, the cost of building your extension or the new home has increased significantly. Despite these challenges, we remain optimistic that the market will eventually adjust and that they will be able to find ways to keep costs down. In the meantime, they are urging customers to be patient and understand that construction costs are rising due to factors beyond our control.
Other factors at play.
Despite having NET ZERO emissions targets in place for 2050 and new building regulations Part L and Part O coming soon, the government has done very little to enact policies that would help reduce emissions on a national scale. This is mainly due to a lack of incentives for the general population to invest in energy efficiency. For example, regarding the cost of heat pumps – becoming increasingly necessary to reduce emissions and energy usage- there is currently no relief in terms of Value-Added Tax (VAT) for those wanting to purchase and install them. The Federation of Master Builders (FMB) have been lobbying the government to reduce VAT for renovations and home improvements for some time. This would insulate old properties and help reduce heating costs and emissions while keeping homes cool in the summer. However, so far, these efforts have been unsuccessful. It is clear that more needs to be done to encourage people to invest in energy efficiency measures, or else the emissions targets set for 2050 will not be met.
We have tried many tricks in our books to reduce the impact, but unfortunately, the annual minimum raise on the quotes produced is now up by 13% with much shorter price guarantees. This trend is expected to rise year on year 12-13 % for larger projects, meaning smaller domestic ones will grow to about 15% yearly. The reasons are market conditions, government policies, import tariffs and other global factors. As a result, we have had to increase our prices to cover costs.
In conclusion, the rising cost of materials and labour is a cause for concern for builders and customers. However, some steps can be taken to mitigate the impact of these increasing costs. The government needs to do more to encourage people to invest in energy efficiency measures, and builders need to continue to lobby for relief from VAT to help reduce the impact on households.