Brick shortage affecting small developers
The UK is currently experiencing a brick shortage, with many companies being forced to wait over 12 months for bricks. Not only is this slowing down development, it’s also driving up the cost of bricks massively – meaning that small developers are being hit the hardest. The Federation of Master Builders (FMB) conducted research on small-to-medium sized companies and found that bricks were by far the material with the longest wait time and highest price, with roof tiles coming in second (showing a wait time of around six months).
But what has caused this shortage, and what does it mean for the industry long-term?
According to the FMB, the shortage as it is today arose due to an increase in cost of the raw materials required to make bricks. The sterling’s decreasing value also contributed, as did high demand in an ever-expanding market. According to the Brick Development Association, The UK used 2.4 billion bricks in 2017, although only 1.9 billion were manufactured locally – leaving a deficit of approximately 500 million bricks.
The origins of the shortage, though, can actually be traced back to the 2008 recession, when the significant decline of the housing market and the global financial crash meant that brick production decreased enormously. Many brick plants were either permanently closed or slowly phased out. As the housing market began to slowly regenerate, the few manufacturers still standing in the UK were faced with a surge in demand thanks to the introduction of Help to Buy schemes, and struggled to catch up.
Larger companies aren’t as affected by these changes, as they can stockpile materials and mitigate most of the impact. Smaller firms, on the other hand, aren’t able to access materials without the same deep pockets and extensive networks that big developers have.
The research found that brick prices have increased by 9% on average; roof tiles and timber have gone up by 8%, and insulation has soared by 16%. More than 50% of the companies who participated in the survey said that the price increase was crushing their margins – and 56% said that they were left with no choice but for customers to shoulder the cost. Resultantly, development projects are becoming more expensive, with prospective homeowners especially put at risk.
Should the shortage continue, the UK could see an increase in house prices; an exacerbation of the housing crisis and (on a less daunting note) an increase in timber construction. The Chief Executive of FMB, Brian Berry, has strongly advised all merchants to give as much notice as possible about potential price increases or wait times, so that builders and developers can warn clients ahead of time and plan accordingly.
The possible future of this brick crisis could see the collapse of a number of small/medium-sized firms. AHCI can help you to reduce the impact this potential collapse might have on you, and give you a little piece of mind. Visit the contact us page and speak to one of our expert team to discover ways in which we can safeguard your future home, and ensure you don’t get caught up in the crossfire.
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