28 Nov The Struggles Facing UK Housing Developers
The construction industry in the United Kingdom is currently facing a number of struggles. These include rising material costs due to the COVID lockdowns, a shortage of skilled labour due to the lack of young people wanting to join the industry, and now rising interest rates as the BoE tries to control inflation. These factors are all taking their toll on housing developers, and we also have the looming expectation of a recession and a housing market correction. Most SME developers are deciding to sit on the fence until more certainty comes back to the market.
Rising Material Costs
One of the biggest issues facing UK construction developers at the moment is rising material costs. This is due to the COVID lockdowns, which have resulted in a shortage of supplies. This has been compounded by the fact that many construction projects have been put on hold, which has led to an increase in demand for materials. As a result, prices have been rising steadily and are now at an all-time high. This is having a major impact on developers, who are struggling to complete projects on time and within budget.
Shortage of Skilled Labour
Another big issue facing UK construction developers is a shortage of skilled labour. This is due to the lack of young people wanting to join the industry. The reasons for this are varied but include the perceived risks associated with working in construction, as well as the low wages and long hours. This shortage of skilled labour is having a major impact on developers, who are struggling to find workers to complete projects on time and within budget.
Rising Interest Rates
The third big issue facing UK construction developers is rising interest rates. The Bank of England has raised interest rates in an attempt to control inflation, which is putting pressure on developers who have borrowings. This is making it more difficult for developers to obtain funding for new projects, as well as making it more expensive to service existing debt. As a result, many developers are being forced to put projects on hold or cancel them altogether.
Conclusion
The UK construction industry is currently facing a number of challenges. These include rising material costs, a shortage of skilled labour, and now rising interest rates. These factors are all having an impact on housing developers, and we also have the looming expectation of a recession and a housing market correction. Most SME developers are deciding to sit on the fence until more certainty comes back into the market.