THE EFFECT OF A NO DEAL BREXIT ON THE CONSTRUCTION INDUSTRY
Explore the impact of a no-deal Bexit on construction materials and costs, and the importance of planning ahead in this uncertain landscape.
All economic planning in the construction industry should be on Brexit right now. Yet, with the global pandemic taking up most of our attention, it's hard to keep up with the headlines. The chance of a no-deal Brexit, in light of recent discussions, appears to be a likely conclusion. That brings uncertain times for the building industry, which is why we've pulled together the key Brexit headlines for our industry and what it means for home building come 1st January 2021.
Why is there so much conversation about Brexit and the construction industry?
The lack of information from the Government about a Brexit deal, paired with the upcoming Brexit deadline, makes industry experts suggest that those building their own homes or renovating could face a steep rise in the price of their construction materials.
The consequences of a no-deal Brexit will hit the construction and builders’ merchant industry hard.
The bottom line means if you can, factor this in or buy now. It will ensure you avoid overpaying for building materials if the UK leaves without a deal. Predictions suggest that "In the event of a no-deal Brexit, the cost of building materials imported from the EU could increase from 2% to 8%". That's according to homebuilding.co.uk. Of course, that's easier said than done when the deal is days away, and finances are already squeezed.
The next best step is to project and plan. When considering your 2021 home build and renovation projects, make sure you have a plan A, B and even C - thankfully, the global pandemic has given us plenty of practice with this form of agile planning.
Cost of materials
In the case of a no-deal Brexit, the UK will be subject to World Trade Organisation tariffs. As such, the price increases could be more liable to change. The price of materials will also be affected by changes in regulations, transport and import duties (source https://www.homebuilding.co.uk/news/brexit-construction).
We also know that from 1 January, PIR insulation will cost 6.5% more if no trade deal is reached, plus some manufacturers have announced planned price rises of between 11% and 18% in March 2021. So to be on the safe side, factor this in when planning costs for a job.
Stock Levels
Supply chains will manipulate the volume of materials available at builders merchants. The Builders Merchants Federation understands that we are already feeling the pressure of this as the efficacy of ports and trade lines take time to adapt to the last minute changes.
The immediate impact of a no-deal Brexit would indeed bring chaos at first but, in the long term, British construction companies may take matters into their own hands and manufacture on home turf rather than import.
The materials likely to be affected
The main materials affected are: timber, bricks, roofing supplies, insulation, cement, fencing, paving and plaster.
COVID-19 has wreaked havoc on the supply of these products.
Andy Stevens, builder and consultant with Eclipse Property Consultants and contributor to Homebuilding & Renovating magazine said of the impact: "With plastering left undone, plumbers, electricians and carpenters couldn't carry out second fix work, kitchens and bathrooms couldn't be fitted, and decorators couldn't finish the job".
One of the key material concerns is gypsum-based products: mainly plasterboard and timber. The lack of timber supplies has led to an increase in demand, leading to higher prices, which are likely to increase further with the leading exporters being China and Germany.
Bathroom products, as well as roofing materials, are going to be harder to buy too, as main imports come from Europe. The UK holds very little stock, buying to order rather than in bulk, and this includes cladding and roof tiles.
Plan ahead
Whilst it is true that the situation feels dire right now, with good planning, and considering the following steps, you can ensure that whatever happens, you set yourself up for the best possible situation to ride out 2021 and a potential no-deal Brexit:
- Organise yourself with a comprehensive plan and communicate with your suppliers whether your construction plan is months or even a year away.
- You need to strike the best deal for you. Build relationships with your local builders' merchants to secure supplies and prices early.
- Order the materials for your project early and store them if you can. Yes, it's an upfront cost, but it will save money later.
- Consider using reclaimed materials. Do your research, but high quality reclaimed materials will save you both money and arguably will help the environment.
We cannot stress enough that planning as far in advance as possible will serve you well on your construction projects.
Don't let Brexit suck all the joy out of your projects. We can’t change the outcome, but we can make the most of our expertise as home builders and renovators.
Key content comes from the article ‘Brexit Construction Fears as Builders Warn Building Materials Could Surge in Price Amid No-Deal Brexit' from
https://www.homebuilding.co.uk/news/brexit-construction
All economic planning in the construction industry should be on Brexit right now. Yet, with the global pandemic taking up most of our attention, it's hard to keep up with the headlines. The chance of a no-deal Brexit, in light of recent discussions, appears to be a likely conclusion. That brings uncertain times for the building industry, which is why we've pulled together the key Brexit headlines for our industry and what it means for home building come 1st January 2021.
Why is there so much conversation about Brexit and the construction industry?
The lack of information from the Government about a Brexit deal, paired with the upcoming Brexit deadline, makes industry experts suggest that those building their own homes or renovating could face a steep rise in the price of their construction materials.
The consequences of a no-deal Brexit will hit the construction and builders’ merchant industry hard.
The bottom line means if you can, factor this in or buy now. It will ensure you avoid overpaying for building materials if the UK leaves without a deal. Predictions suggest that "In the event of a no-deal Brexit, the cost of building materials imported from the EU could increase from 2% to 8%". That's according to homebuilding.co.uk. Of course, that's easier said than done when the deal is days away, and finances are already squeezed.
The next best step is to project and plan. When considering your 2021 home build and renovation projects, make sure you have a plan A, B and even C - thankfully, the global pandemic has given us plenty of practice with this form of agile planning.
Cost of materials
In the case of a no-deal Brexit, the UK will be subject to World Trade Organisation tariffs. As such, the price increases could be more liable to change. The price of materials will also be affected by changes in regulations, transport and import duties (source https://www.homebuilding.co.uk/news/brexit-construction).
We also know that from 1 January, PIR insulation will cost 6.5% more if no trade deal is reached, plus some manufacturers have announced planned price rises of between 11% and 18% in March 2021. So to be on the safe side, factor this in when planning costs for a job.
Stock Levels
Supply chains will manipulate the volume of materials available at builders merchants. The Builders Merchants Federation understands that we are already feeling the pressure of this as the efficacy of ports and trade lines take time to adapt to the last minute changes.
The immediate impact of a no-deal Brexit would indeed bring chaos at first but, in the long term, British construction companies may take matters into their own hands and manufacture on home turf rather than import.
The materials likely to be affected
The main materials affected are: timber, bricks, roofing supplies, insulation, cement, fencing, paving and plaster.
COVID-19 has wreaked havoc on the supply of these products.
Andy Stevens, builder and consultant with Eclipse Property Consulants and contributor to Homebuilding & Renovating magazine said of the impact: "With plastering left undone, plumbers, electricians and carpenters couldn't carry out second fix work, kitchens and bathrooms couldn't be fitted, and decorators couldn't finish the job".
One of the key material concerns is gypsum-based products: mainly plasterboard and timber. The lack of timber supplies has led to an increase in demand, leading to higher prices, which are likely to increase further with the leading exporters being China and Germany.
Bathroom products, as well as roofing materials, are going to be harder to buy too, as main imports come from Europe. The UK holds very little stock, buying to order rather than in bulk, and this includes cladding and roof tiles.
Plan ahead
Whilst it is true that the situation feels dire right now, with good planning, and considering the following steps, you can ensure that whatever happens, you set yourself up for the best possible situation to ride out 2021 and a potential no-deal Brexit:
- Organise yourself with a comprehensive plan and communicate with your suppliers whether your construction plan is months or even a year away.
- You need to strike the best deal for you. Build relationships with your local builders' merchants to secure supplies and prices early.
- Order the materials for your project early and store them if you can. Yes, it's an upfront cost, but it will save money later.
- Consider using reclaimed materials. Do your research, but high quality reclaimed materials will save you both money and arguably will help the environment.
We cannot stress enough that planning as far in advance as possible will serve you well on your construction projects.
Don't let Brexit suck all the joy out of your projects. We can’t change the outcome, but we can make the most of our expertise as home builders and renovators.
Key content comes from the article ‘Brexit Construction Fears as Builders Warn Building Materials Could Surge in Price Amid No-Deal Brexit' from
https://www.homebuilding.co.uk/news/brexit-construction
