3rd December 2019

Brexit and supply uncertainties

Neil Thomas, Director of Housing, reflects on some of the opinions aired at the recent H+H sponsored Housing Market Intelligence conference.

Whenever, or possibly that should read if ever, Brexit is resolved there is a strong possibility that house prices will take a hit following a fall in transactions as both buyers and sellers hold-fire. What could make the situation worse for housebuilders is that there are likely to be additional price pressures on imported materials.

According to the Construction Products Association, 92% of softwood timber is imported from the EU. The association says timber prices rose 18% in the year following the referendum due to depreciation in the value of sterling and that they are over 30% higher now than they were before the EU Referendum.

It's not only the likely increased cost of imported materials that will impact housebuilders, there are concerns too about the availability of imported materials post Brexit. 

Softwood timber is fundamental to the construction of timber framed homes, for example. 

While its increased cost can be mitigated by housebuilders, either absorbing the extra cost themselves or by passing it on to buyers, the consequences of timber availability - or lack of availability - could potentially be much more serious concern for any housing scheme.

What's more, it’s difficult to see the situation changing in the near future. It seems likely that whatever the outcome of the general election and Brexit deal or no-deal on 31 January 2020, until all trade deals are in place there will be a continuation of uncertainty regarding overseas trading for some time to come.

According to professor Noble Francis, Economics Director at the Construction Products Association, writing in the recent H+H sponsored Housing Market Intelligence report: “Most construction materials and products used in UK construction (76%) are made in the UK”. 

That total, of course, includes H+H's aircrete products, including its Thin-Joint range which is used in the Ra Build package. Ra Build is a durable and cost-effective alternative to timber-frame construction, offering many of the benefits of offsite procurement with the reassurance and proven performance of masonry and the reassurance that it is manufactured in the UK.

H+H also has a policy to responsibly source materials used in the manufacture of its aircrete products. In fact it was recently awarded an “Excellent” rating for responsible sourcing of construction products as defined in BES 6001 Framework Standard. So, while the uncertainty and economic impact of Brexit remain, specifiers can be certain of the quality and availability of H+H's UK-manufactured aircrete products.

 

Ref: http://www.constructionleadershipcouncil.co.uk/wp-content/uploads/2019/01/CPA-Brexit-Jan-19.pdf