Commenting on the latest construction industry output update from the ONS, Stuart Law, CEO of the Assetz group, said:
“The slight slowdown in construction output seen over the last month is likely a result of a combination of factors. Access to materials and labour remain key issues for the sector. Many housebuilders are struggling to get hold of the materials they require, either because larger firms are stockpiling supplies or because they are simply too expensive to purchase as prices continue to rise. This is partially as a result of the pandemic limiting supply over the last 18 months, but also down to the realities of Brexit, which has stretched supply chains and reduced the workforce in the UK.
“Along with incredible sustained demand from buyers and the likelihood that interest remains will remain low, these shortages are part of the reason we forecast house prices continuing to rise strongly for the next 12-18 months.
“While these difficulties may present a serious challenge for the construction industry, there is still strong appetite from housebuilders who know they have an opportunity to capitalise on the current dynamics with buyers willing to stomach high prices to secure a move to facilitate their new lifestyle priorities post-pandemic. We expect this trend to continue for some time and that will maintain momentum in construction, even if growth continues to be somewhat dampened by issues with labour and materials.
“However, given the country’s chronic housing under-supply we need to pick up the pace faster in the housebuilding sector and find ways for housebuilders, especially SMEs, to move forward with viable schemes despite the financing challenges they face in the current climate. Easy access to funding, often not available through traditional lenders for housebuilding schemes, is crucial, as is the simplification of the planning process. With innovative financing and a less onerous planning system, viability can be improved, making projects more resilient against challenges like those we are currently seeing.”