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The inaugural Housebuilding Costs and Labour Survey for Q1 2025 has found that output in the UK housebuilding industry is set to increase in the coming 12 months โ€“ but a lack of skilled labour is resulting in recruitment difficulties amidst rising costs.

๐—Ÿ๐—ฎ๐—ฏ๐—ผ๐˜‚๐—ฟ ๐˜€๐—ต๐—ผ๐—ฟ๐˜๐—ฎ๐—ด๐—ฒ๐˜€ ๐—ฝ๐—ฒ๐—ฟ๐˜€๐—ถ๐˜€๐˜
โ€ข 32% of respondents say that the availability of skilled labour has decreased in the past six months
โ€ข 86% of firms find recruiting skilled workers difficult
โ€ข 81% expect labour costs to rise over the next 12 months

๐— ๐—ฎ๐˜๐—ฒ๐—ฟ๐—ถ๐—ฎ๐—น ๐—ฐ๐—ผ๐˜€๐˜๐˜€ ๐—ธ๐—ฒ๐—ฒ๐—ฝ ๐—ฐ๐—น๐—ถ๐—บ๐—ฏ๐—ถ๐—ป๐—ด
โ€ข 95% of businesses report rising material prices
โ€ข A further 84% expect costs to increase further this year

๐—ช๐—ผ๐—ฟ๐—ธ๐—น๐—ผ๐—ฎ๐—ฑ ๐—ฎ๐—ป๐—ฑ ๐˜๐—ฒ๐—ป๐—ฑ๐—ฒ๐—ฟ๐—ถ๐—ป๐—ด ๐—ฎ๐—ฐ๐˜๐—ถ๐˜ƒ๐—ถ๐˜๐˜† ๐—ผ๐—ป ๐˜๐—ต๐—ฒ ๐—ฟ๐—ถ๐˜€๐—ฒ
โ€ข 65% believe workload levels will rise over the next six months
โ€ข 51% are seeing more tendering opportunities

๐—ช๐—ต๐—ฎ๐˜ ๐—ฑ๐—ผ๐—ฒ๐˜€ ๐˜๐—ต๐—ฒ ๐—ณ๐˜‚๐˜๐˜‚๐—ฟ๐—ฒ ๐—ต๐—ผ๐—น๐—ฑ?
Material and labour costs will continue to rise but the level of skilled labour available remains limited, squeezing productivity as well as the margins of contractors already under pressure.

๐—ช๐—ต๐—ฎ๐˜ ๐˜€๐—ต๐—ผ๐˜‚๐—น๐—ฑ ๐—ฐ๐—ผ๐—ป๐˜๐—ฟ๐—ฎ๐—ฐ๐˜๐—ผ๐—ฟ๐˜€ ๐—ฑ๐—ผ?
โ€ข Review fixed price periods on current contracts and discuss cost increases with developers.
โ€ข Discuss labour and resource challenges with housebuilders and review build programmes collaboratively.
โ€ข Place greater emphasis on reliability and quality at tender stage, over simply reducing margins.

๐—ช๐—ต๐—ฎ๐˜ ๐˜€๐—ต๐—ผ๐˜‚๐—น๐—ฑ ๐—ต๐—ผ๐˜‚๐˜€๐—ฒ๐—ฏ๐˜‚๐—ถ๐—น๐—ฑ๐—ฒ๐—ฟ๐˜€ ๐—ฑ๐—ผ?
โ€ข Recognise the rising cost trends in the market and engage in open discussion with the supply chain.
โ€ข Ensure the cost increase burden is shared fairly.
โ€ข Review fixed partnerships contracts to identify exposure and put mitigation plans in place.
โ€ข Pay the supply chain fairly and on time.

Ben Wakeling

We are pushed to work at margins very close to the cost price, which is very tough for small businesses like ours. It appears that developers have certain budgets which are almost impossible for us to meet”

“Prices are being squeezed at a time when labour prices and business rates are going in the opposite direction. It would unfortunately be no surprise to see more firms closing over the next six to twelve months.”

“General feeling is that price is more important than quality at tender stage”

“The Government is saying build, but most open market developers are slowing down.”

“Output is slow โ€“ tenders received are on the up, but the outcome of these, if secured, wonโ€™t be seen for another six to nine months.

Brookbanks Services

How can Brookbanks help?

Budget and Cash Flow Planning

Contract Administration

Project and Programme Management

Unlocking Land

How can we help you and your business?

  • Structuring, maintaining and managing accurate budget and precise cash flow forecasts
  • Managing contractual obligations effectively to prevent disputes and ensure smooth progress
  • Coordinating project elements to ensure timely and cost-effective completion
  • Strategic review and delivery of assessments, appraisals to ensure efficient implementation

Get in touch to discuss further, or find out how we can help you and your business: ben.wakeling@brookbanks.com

Cost & Commercial Group

Infrastructure/Abnormal/Site-Wide Cost Planning. We have vast experience in structuring, maintaining and managing budgets of hundreds of million pounds, en...
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Group Director of Cost and Commercial

Anthony Brown

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Commercial Director

Ben Wakeling

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Senior Cost Consultant

George Wood

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Project Cost Consultant

Ismail Ali

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Senior Cost Consultant

Jaskaran Singh

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Graduate Cost Consultant

Shiv Raja

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