The rising cost of building materials is an issue for the construction industry and homeowners alike

Soaring cost of building materials a major concern for homeowners and contractors

Self-builders, building contractors and developers, along with homeowners who need work on their properties have been hard hit by the rising cost of materials. The issue began in the pandemic as Covid wreaked havoc on production and transportation and just as a tentative recovery was underway, the impact of the Russian invasion of Ukraine and spiralling energy prices have sparked another setback.

Kristoffer Hudson of Turner and Townsend, Leeds, which specialises in cost estimating and cost control for developers, says that the Building Cost Information Service, which is part of the Royal Institution of Chartered Surveyors, estimates that the combined costs to build accelerated by 10.4 per cent year-on-year in the last quarter of 2021. However, he adds that this overall figure masks some huge increases in the price of materials, including sawn wood, which has risen by 88.5 per cent year-on-year.

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Particle board and structural steel rose by 73 per cent and 69.1 per cent respectively. The price of plastic doors and windows increased by 21 per cent and paint and concrete blocks by 18.2 per cent, while bricks, tiles and flagstones were up by 7.8 per cent and wooden doors and windows by 6.3 per cent.

The cost of building materials is rising

“The recent events in Ukraine have amplified pre-existing issues,” says Kristoffer. “Elevated energy prices are of critical concern, adding to the current weight of inflationary pressure on house building costs and the rising price of construction materials and component prices in the UK.”

He stresses that UK energy price pressures were already increasing following a worldwide squeeze on supplies before the Russian invasion of Ukraine added to the issue. There is also concern for the short to medium-term impact the Ukraine conflict could have on an already strained UK supply chain and existing material shortages. While only 1.2 per cent of all imported construction materials in the UK come from the warring countries, the UK still has some reliance on a number of them.

According to the Department for Business, Energy and Industrial Strategy Russia and Ukraine supplied the UK with 13.5 per cent of all concrete reinforcement bars needed, 9.3 per cent of asphalt products, 6.5 per cent of laminated wood, six percent of all flat glass and 5.1 percent of all sawn wood below 6mm in thickness.

Kristoffer Hudson says: “Many manufacturers and builders could pass on increased costs onto customers as margins are squeezed, leading to more expensive houses and costlier renovations and extensions. The net effect of recent market pressures is rising prices, which could also lead to the postponement and cancellation of projects based on affordability constraints.”

Andrew Wooler of award-winning, family run building contractor and developer RN Wooler, based in Keighley, says labour costs have also risen. “When Covid receded there was pent-up demand for labour and prices for it rose “Now the war in Ukraine is affecting energy costs and the production of cement, concrete, steel and glass are energy dependant. Fuel costs and the war have also had an impact on the price of wood as some of it comes from Scandinavia, Canada and Russia.”

Andrew estimates that plywood has risen by 15 per cent, soft wood by 10 per cent and insulation by 20 per cent over the past year and says that the increased price of building is a major concern for contractors who agreed construction costs with developers before inflation took hold.

Brian Berry, chief executive of the Federation of Master Builders, says: “Builders are suffering from heightened material costs. “On-going supply chain disruption, alongside growing global demand, has created volatility in the price and availability of building materials. The FMB’s most recent membership survey revealed that 95 per cent of local builders had reported material price increases during the final quarter of 2021, with 74 per cent having to increase the cost for their work.

“The Russian invasion of Ukraine will only exacerbate these difficulties in the months ahead, with supplies of raw materials vital to construction like copper, oil, and aluminium set be disrupted.

“At a time when living costs are surging, the situation puts builders in the unenviable position of having to raise costs for a customer base that is having to tighten its belt. One way the Government could help would be to delay the planned end of the Red Diesel Rebate, something that was missing in the Chancellor’s Spring Statement.”

The Royal Institute of British Architects says that Brexit is also creating issues including a lack of HGV drivers and a scarcity of construction workers, along with delayed shipments of materials from overseas.