Data from the Bank of England showed the biggest net increase in mortgage lending on record during March.
Sky News reported that the surge in mortgage lending had been driven by tax breaks including the stamp duty holiday.
Mortgage borrowing rose by £11.8bn
The Bank of England revealed that mortgage borrowing rose by a net £11.8bn, the strongest increase since records began in 1993.
It said that lenders approved 82,735 mortgages in March, down by about 5,000 from February as activity surged in anticipation of an easing in COVID-19 lockdowns, low interest rates and further opportunities for tax savings which were announced in the Budget. (Back in March, Advantage wrote about the construction sector’s reaction to the Budget).
As we’ve noted before, it has been a busy period for the construction sector and related fields, and we’ve seen strong demand for structural warranties during the first quarter of 2021.
Small building firms saw enquiries increase at the fastest rate in a decade
It’s not just at Advantage that the ‘phone lines have been busy. According to the latest Federation of Master Builders (FMB) survey, small building firms saw customer enquiries increase at the fastest rate in a decade.
The Construction Index reported that in the first quarter of 2021, workloads, enquiries and employment all grew, with enquiries growing at their fastest pace in more than 10 years.
Repair, maintenance and improvement (RMI) saw the strongest performance with 55% of respondents reporting increased workloads.
However, the flip side of this good news is that shortages of construction materials and skilled labour are being exacerbated: 38% of builders are struggling to hire bricklayers, up from 22% in Q4 2020; and 34% are struggling to hire carpenters/joiners, up from 23% in Q4 2020.
With building materials not always readily available, 93% of builders said that material prices were rising.
Shortages and price rises for building materials
FMB chief executive Brian Berry said:
“I am delighted to see the positive reports from builders across the UK that workloads, enquiries and employment are all firmly back in positive territory after a difficult year for business. In the first quarter of the FMB’s 80th year, it is particularly pleasing to see enquiries grow at their fastest rate in more than a decade. However, success is not without its challenges. A whopping 93% of builders reported material price increases in the period January to March, with particular concerns over accessing roof tiles, glazing products, timber and insulation.”
Advantage’s view: With the property and construction sectors continuing to bounce back, it will be a relief to many to be enjoying a period of growth. However, as Brian Berry has highlighted, construction firms continue to face challenges with the supply chain and will need to juggle busy workloads with potential delays in securing some materials. According to PBC Today, when asked to rank their top three concerns for 2021, almost half of roofing and cladding contractors (48%) put material shortages at the top of the list.
In terms of anticipated workloads, the outlook looks more positive, with construction leaders welcoming the prospect of another busy quarter ahead.
Whether you’re a social and affordable housing specialist or a commercial developer or you’re planning to build or convert your dream home, Advantage can provide structural warranties for projects ranging from multi-million pound developments to individual self-builds. If you would like more information, please call: 0845 900 3969, email: email@example.com or pay a visit to our homepage: https://ahci.co.uk/