70% of UK builders have seen an increase in material prices due to the depreciation of the pound following the vote to leave the European Union, research from the Federation of Master Builders (FMB) has revealed.
Research from the FMB’s State of Trade Survey suggested that the price of materials could increase by 10-15% by the end of 2017.
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.
“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.”
McMonagle said home owners could start to see the cost of their building projects increase.
She added: “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.”
Some builders are attempting to mitigate the effects of rising prices by introducing larger contingency funds when pricing for a job, or by stipulating in the contract that the overall contract price will change in the case of material price hikes, the FMB said.
Image: A quarter of all materials used by the UK construction industry are imported, the FMB said (Bellway Homes)
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