I’ve written on this before a few weeks ago. Based on my experience and what my building company is saying, this is all now about labour. Yes, material costs have risen, but the increases still going on are now being outstripped by the increase in labour costs.
There is a lack of low skilled, lower wage but experienced trades. So the sort of folks who would be employed directly by a building company and carry out the grunge work under minimal direction with enough experience to do a decent job without too much supervision. Trades that were flexible in terms of being able to do a bit of basic building, joining, etc.
historically we had a lot of trades working from EU- a mix of those low skilled but experienced, as well as very skilled. Particularly from Eastern Europe It meant there was a surfeit of labour and builders that were competing for jobs to keep prices down.
Now that extra labour can’t work in uk anymore, many of those low skilled but experienced trades, that are still working in uk, are seeing they can earn more, work hours they want by becoming self employed and doing sub contract work. They are setting themselves up as their own company. And they can charge high rates back to main building companies, simply because of the lack of labour.
add to that because they are low skilled and don’t have the experience on the more complex task it can lead to shoddy work that has to be redone. And then that means main contractors have to being in someone else more skilled to do the work agian. All adding to general costs.
In addition you’re also getting low skilled and INexperienced trades doing the same things so they can see there’s a lot of money in it. So, young lads with maybe 2 years experience as a brickie setting themselves up as a subcontract general builder.again, mistakes are made and work redone, but also what was cheaper labour is now more expensive, before you even begin to think about cost of living rises.
Add to that there’s is a heck of a lot of these sub contractors just choosing to drop out of doing a job at last minute cos they fancŷ a few day off , and then the main contractors have to get someone else in at short notice and pay even more through the nose because it is holding the rest of the job up.
My job has been held up 3 times now by sub contractors my builder has worked with for years, just not showing up or worse, disappearing with the builders money. These are people he trusted. It’s a shit show.
mymain builder is paying up to £2000 per week in wage cost to his sub contractors.
So, only thing that will drive prices down is when available labour we have exceeds the demand from the customers. This will , as far as I can think, only be achieved 3 ways:
- interest rate rises cause a massive decrease in demand for building work - could happen in next 2 years, but right now there is a massive backlog of work on most decent builders books- my builder isn’t taking on new jobs before next May right now
- the government invests seriously in apprenticeships and drives education away from the mantra of university for all, and back to appreciating a low skill but experienced work force with pay at a legal minimum living wage and non gig economy- meaning that workers can and want to train and do these jobs without wondering how to pay their bills. But that is 3-5 years away even if there was a will to do this in govenement- which there isn’t. It’s the same will for care workers etc- lower skilled but experienced workers
- they allow free movement for work in from Eu, or other countries as per before brexit, and admit it was completely phoney to claim that British people were unemployed due to all “them foreigners” taking “our” jobs, it was a good lie to weave for a political vanity project, and thousands believed it - if you voted brexit and now complain about the cost of building, what part of your brain did you not engage before you voted 🤦♀️🤷🏼♀️. It was entirely predictable. Covid did add to the issues, but the main issue is the lack of free movement and skill shortages
so, based on my experience, nope I don’t see prices coming down for 3-5 years. But I still wouldn’t go through what I’m going through if I didn’t have to do the work right now.