There has been a steady rise in the cost of building a house since the start of 2014, in the year up to 2017 the prices increased by 4.6%. This is due to the increasing demand on resources available to the private market.
62% of contributors reported that they had seen an increase in costs within the last quarter, with 31% of people noting a rise in labour costs, and 35% reporting a increase in the cost of materials (figures from RICS report).
There has been an increase in the cost of many types of materials including timber joints, roof trusses and MDF, bricks, blocks, imported materials and rigid insulation. The labour costs of roof tilers, scaffolders, bricklayers, dry liners, plumbers and electricians have all also increased within the past few years.
Brick and Tile Stocks
There are current concerns that the stocks of bricks and roof tiles are at their lowest in three years. House builders are reporting that brick stocks did recover slightly at the beginning of the year, but they are still at their lowest level since 2015. This relates to only a two month supply at the current construction demand. In comparison concrete roof tiles are at their lowest levels since 2013, which relate to less that a two week supply.
The capacity for increased production is in place, but it takes a relatively long time for this to filter into the production of stocks. The production rate of bricks has risen steadily since mid 2017, but the demand has also increased in that period. At present the levels of deliveries exceeds the production rates across the UK.
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Read our blog on What Impact Brexit has on Construction?