What is driving the crazy labour costs??

[TheEconomista]

We've moved to a house that needs a lot of work. We're only looking at the essentials at the moment, but planning an extension in the next few years.

I cannot believe how much the cost of labour for all trades has risen. We've got quotes for decorating (basic), moving radiators (plumbing already in place) and installing a bathroom (small and not changing the layout). In all cases the labour is coming in at somewhere between £450 and £500 per day!! This is at least double what we were paying five years ago. I know cost of living has risen somewhat but this seems completely bonkers to me.

Is everyone else experiencing the same? And what's driving it if so? I can only imagine people are paying it as it seems consistent across trades.

@EvilPea

Scrapyards aren’t allowed to deal in cash anymore. They have to pay in transfers. Honestly, I deal in these trades. Dh is a tradesman, all his friends are. Cash is gone. The last 5 years. It’s gone. The lack of mortgage and renting with it, house prices being what they are you have to be able to prove your income. The only place I know that’s cash is the local builders merchant where you give the security £50.

Whether they're allowed or not, they still do it. Plenty of people work entirely under the radar. Yes, I'm sure lots of scrap yards etc are fully legal, but lots aren't. Tax evasion is illegal but it's still rife. The "black economy" makes up the largest component of the official "tax gap" as per The Treasury/HMRC reports. The trouble is that HMRC don't have the inclination or resources to tackle it since Gordon Brown bodged the merging of the tax depts, closed down tax offices, made experienced staff redundant and transferred everything to a few huge call centres. Just making something illegal does not mean it's stopped, especially when there is little enforcement.

It does get enforced. One was closed down near me a few years back. They are heavily regulated and heavily watched due to the potential for all sorts of criminality.
It’s not the wild west anymore. The regulations that have been brought in work.

Brexit

[quote Badbadbunny]@EvilPea

Scrapyards aren’t allowed to deal in cash anymore. They have to pay in transfers. Honestly, I deal in these trades. Dh is a tradesman, all his friends are. Cash is gone. The last 5 years. It’s gone. The lack of mortgage and renting with it, house prices being what they are you have to be able to prove your income. The only place I know that’s cash is the local builders merchant where you give the security £50.

Whether they're allowed or not, they still do it. Plenty of people work entirely under the radar. Yes, I'm sure lots of scrap yards etc are fully legal, but lots aren't. Tax evasion is illegal but it's still rife. The "black economy" makes up the largest component of the official "tax gap" as per The Treasury/HMRC reports. The trouble is that HMRC don't have the inclination or resources to tackle it since Gordon Brown bodged the merging of the tax depts, closed down tax offices, made experienced staff redundant and transferred everything to a few huge call centres. Just making something illegal does not mean it's stopped, especially when there is little enforcement.[/quote]
With all due respect, it has been the tories who have cut down on actual tax inspectors. Even though every inspector pulls in more than their own employment costs. Any guesses as to why they have done this, whilst increasing the investigations into benefit fraud, even though there is far and away less benefit fraud than tax fraud and it costs more to investigate it than they get back............

Thanks for all the replies. I'm not making a value judgment on what trades are 'worth' in salary terms compared to other types of work, simply seeking to understand what's led to the doubling of labour costs here in recent months, well outstripping cost of living increases.

The fact of the matter is that salaries in other sectors haven't risen/won't rise in line with the increased costs of having work done, so in many cases, it'll simply be unaffordable or put off until something changes. It's not a case of wanting cheap labour - the market rates we paid before were pretty standard/top end according to what people have said here. We simply can't afford what we're being quoted as in most cases it's double a reasonable estimate.

I do wonder if there will be a slump in demand and a return to more manageable labour rates in our area once the pent up demand dies down.

And just to say we know people who have paid their main contractor in mostly cash to the tune of tens of thousands, and many trades we've spoken to still want cash in hand - it absolutely does still happen and isn't particularly under the radar.

I think it’s more COVid than Brexit. Any foreign workers could just register and stay. I’ve Polish friends working in IT in Poland who registered ‘just in case’ they wanted to move to UK.
With COVid the work stopped, and a lot went back home, they will return. Also the ‘clever’ people who paid themselves minimum wage and took the bulk of their salary in dividends (to avoid normal rate tax and NI) didn’t get furlough so had to find other employment. Similar to a recession, a lot of builders leave the industry when they discover they have no financial protection.
Looking at building site rates for bricklayers, it’s @200 per day (south), in my experience, having a tradesman in you house will be up to 50% more than that, with plumbers/sparks double.

@onedayoranother

Wow. I'm renovating my house in London currently and have had separate plumber, carpenter, two decorators, fence guy, tiler, pointer and electrician plus general builder and day rates have varied from £140 to £200. Plumber and carpenter being the most expensive, but the plumber also had an apprentice with him. True many tradesmen have left, but it's been materials that have gone up in my experience, not labour. Your quotes sound insane.

I can't believe you can get a decent electrician for £200 per day. My DP is an electrician and wouldn't accept that. We had a plumber here this week and he wouldn't do less than £250 a day. That has been the case for quite a long time. Which trade is accepting £140 a day?

I don't care how good a tradesman is, there is no way I'd be paying £500 per day! DP is an electrician and quotes at c£300per day. He has never been without work in the 9 years I've known him. He is always turning work down.

I would say though that we have used fairly cheap painters and decorators and they have done an awful job and we've had to re-do it. But I still wouldn't consider £500 a day or anything close to that.

@Starseeking I don't have a premium account so can't sent or receive DMs nor would I ever put someone's details on the internet so I can't share. Good luck with your search

@sunshinesupermum

Wannabeamummysobad Who does your decorating of a 2 bed flat for £5K?? I'm in SW London, also 2 bed flat and it cost be c.£8K in 2019!

It's mostly painting and putting up shelves /mirrors and the answer to that is the person I found. They are local to me (west London) and came with lots of in person references. Now my neighbours have seen how consistent they are (arrive at 8, finish at 4-30 Monday to Friday) they too asked for their details and I obliged.

They are polish and I paid half in bank transfer and will pay the balance in cash if that makes a difference.

We’ve just had quotes for built in wardrobes. One single built in wardrobe in paintable MDF (we would paint). It’s max 1.5m x 2.2m with 2 shelves and a rail. £2500. Local trades person.

Painting the hallway quote - £1800.

It’s so expensive. We did the painting ourselves. The wardrobe can wait.

I’m sure somebody’s pointed this out already bought I got a £22 grand pay rise from last year and I am no better off at the end of the month it’s literally a case of everything has gone up.

@Littlecaf

We’ve just had quotes for built in wardrobes. One single built in wardrobe in paintable MDF (we would paint). It’s max 1.5m x 2.2m with 2 shelves and a rail. £2500. Local trades person.

Painting the hallway quote - £1800.

It’s so expensive. We did the painting ourselves. The wardrobe can wait.

Wow - I'm outer west London and just had my living room painted for £740! That didn't include materials but it was 5 days work - I didn't realise how reasonable it was until I read this thread!

I had to clear my late dads overgrown garden
Before Covid he paid £300
This year they wanted 650 I got them down to £550 😂
They were there about an hour and told me they do two of these a day every day

We recently had some estimates for building work. One company wanted 10k in cash upfront. (We declined - I wouldn't like to carry/keep 10k in cash)

@Mothermorph

We recently had some estimates for building work. One company wanted 10k in cash upfront. (We declined - I wouldn't like to carry/keep 10k in cash)

Definitely wouldn't pay cash upfront. We paid bank transfer as the work progressed and the balancing figure will be paid after all the works have been checked and signed off.

Up front payment gives me rogue trader vibes

I was quoted crazy prices for painting (London). I ended up going with a semi retired decorator who did a 4 out of 10 job (a livable imperfect job, not a disaster). Now, I have decided to bite the bullet and pay today's prices because they are not likely to come down in a generation and will probably rise higher and higher in the next few years. There is no logical reason why they shouldn't.

@Mothermorph you did the right thing
I have a few golden rules for clients
And not paying upfront (bar a few circumstances) is one of them
Paying in cash also rings alarm bells especially in large amounts
I'm also a stickler for contracts as they can help clients and builders when there is conflict. Many builders don't realise that it protects them too once they do they are much happier about them.

I've been floored by the change in works prices (including materials) today.

I had alcove cupboards very similar to the ones in my picture fitted in my old house in August 2020, so during the pandemic. They cost £1,600, all in (no VAT as one man band below threshold).

Today, ringing round 5 carpenters/carpentry companies, sending them pictures and measurements, the first to come back has quoted me £5,200+VAT, so about £6,200 all in. I was planning to spend a maximum of £12k for all works, which includes new upstairs bathroom, downstairs cloakroom and alcove cupboards, however todays experience has given me pause for thought.

Have works prices really quadrupled in 18 months, or was he just trying it on?

@Starseeking well the price of timber alone went up around 100% ( between 80-120% depending on what you are looking at) worldwide last year and has continued rising although I heard from one of the joiners I work with that the timber merchants are expecting a 2-5% drop from that high this spring. The cost of fixings and finishes is still going up.
This is before you even get to labour costs which will be rising to cover the cost of living, insurance rises (construction insurance has been rising sharply over the past few years) and the economics of demand over supply.
So yep they really could have gone up that much.

'We' voted for Brexit. One selling point was that wages would rise. They are.

What is the problem?
Where did 'we' think the wage rises were going to come from.....

Thanks @wonkylegs, that's good to know. In that case I might have to store my books in boxes for a few months as my new bathroom takes priority, and looking at the uplift in works costs that will probably take up my full £12k refurbishment budget (I had thought a new bathroom would cost maximum £6k!).

@Starseeking

I've been floored by the change in works prices (including materials) today.

I had alcove cupboards very similar to the ones in my picture fitted in my old house in August 2020, so during the pandemic. They cost £1,600, all in (no VAT as one man band below threshold).

Today, ringing round 5 carpenters/carpentry companies, sending them pictures and measurements, the first to come back has quoted me £5,200+VAT, so about £6,200 all in. I was planning to spend a maximum of £12k for all works, which includes new upstairs bathroom, downstairs cloakroom and alcove cupboards, however todays experience has given me pause for thought.

Have works prices really quadrupled in 18 months, or was he just trying it on?

Trying it on.

We had alcoves like that built this time last year (so 2021) and they were £1100 each.

If you happen to be SE London, happy to point you to the joiners check-a-trade info.

@HopeLa

'We' voted for Brexit. One selling point was that wages would rise. They are.

What is the problem?
Where did 'we' think the wage rises were going to come from.....

The thing is that people wanting their own wages to rise, but don't want to pay for other peoples' wage rises which is the inevitable and entirely forseeable consequence!