House Building Costs and Labour Survey
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.
๐๐ฎ๐ฏ๐ผ๐๐ฟ ๐๐ต๐ผ๐ฟ๐๐ฎ๐ด๐ฒ๐ ๐ฝ๐ฒ๐ฟ๐๐ถ๐๐
โข 32% of respondents say that the availability of skilled labour has decreased in the past six months
โข 86% of firms find recruiting skilled workers difficult
โข 81% expect labour costs to rise over the next 12 months
๐ ๐ฎ๐๐ฒ๐ฟ๐ถ๐ฎ๐น ๐ฐ๐ผ๐๐๐ ๐ธ๐ฒ๐ฒ๐ฝ ๐ฐ๐น๐ถ๐บ๐ฏ๐ถ๐ป๐ด
โข 95% of businesses report rising material prices
โข A further 84% expect costs to increase further this year
๐ช๐ผ๐ฟ๐ธ๐น๐ผ๐ฎ๐ฑ ๐ฎ๐ป๐ฑ ๐๐ฒ๐ป๐ฑ๐ฒ๐ฟ๐ถ๐ป๐ด ๐ฎ๐ฐ๐๐ถ๐๐ถ๐๐ ๐ผ๐ป ๐๐ต๐ฒ ๐ฟ๐ถ๐๐ฒ
โข 65% believe workload levels will rise over the next six months
โข 51% are seeing more tendering opportunities
๐ช๐ต๐ฎ๐ ๐ฑ๐ผ๐ฒ๐ ๐๐ต๐ฒ ๐ณ๐๐๐๐ฟ๐ฒ ๐ต๐ผ๐น๐ฑ?
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.
๐ช๐ต๐ฎ๐ ๐๐ต๐ผ๐๐น๐ฑ ๐ฐ๐ผ๐ป๐๐ฟ๐ฎ๐ฐ๐๐ผ๐ฟ๐ ๐ฑ๐ผ?
โข Review fixed price periods on current contracts and discuss cost increases with developers.
โข Discuss labour and resource challenges with housebuilders and review build programmes collaboratively.
โข Place greater emphasis on reliability and quality at tender stage, over simply reducing margins.
๐ช๐ต๐ฎ๐ ๐๐ต๐ผ๐๐น๐ฑ ๐ต๐ผ๐๐๐ฒ๐ฏ๐๐ถ๐น๐ฑ๐ฒ๐ฟ๐ ๐ฑ๐ผ?
โข Recognise the rising cost trends in the market and engage in open discussion with the supply chain.
โข Ensure the cost increase burden is shared fairly.
โข Review fixed partnerships contracts to identify exposure and put mitigation plans in place.
โข Pay the supply chain fairly and on time.
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, wonโt be seen for another six to nine months.
Brookbanks Services
How can Brookbanks help?
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
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Ismail Ali
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