The view from the chair on Brexit
With the London Homebuilding & Renovating Show taking place this month, the chair of NaCSBA and show spokesperson Michael Holmes comments on how Brexit is likely to impact the self-build sector
What should self-builders who are mid-project do following the EU referendum result?
Those who see their home as somewhere to live – a long-term proj- ect and not a short-term investment – are carrying on as usual, and that would be my advice if you are considering a custom build, self- build or home improvement project. If you are looking to speculate and make a short-term gain, then
you might pause to see how Brexit goes and look for more visibility on the direction of the economy and the housing market. Depending on how things pan out, house prices might stay flat or fall slightly, and interest rates may have to increase to fight inflation. For those planning a project for a long-term home, I think short-term fluctuations in house prices are a secondary consideration, so having the right house should come first and foremost over any short-term gain.
What is the immediate impact of Brexit on the housebuilding sector?
This remains to be seen, but as long as there is a period of uncer- tainty, people are likely to put off making big decisions like house purchases or taking on a major self-build project or an extension. I suspect those with a project already underway, or very close to start-
ing, will carry on with their plans regardless. The impact is not likely to be felt for a year or two, but until there is some clarity and visibility in terms of the direction in which the economy is going to go and the impact that Brexit will have on the wider economy – and there- fore the housing market – I think there will be a pause while people put off major decisions.
What do you think will be the long-term impact of Brexit on construction?
The impact will be immediate because a huge amount of British con- struction materials are imported from Europe, and purchased in Euros. The pound has already devalued post-Brexit, so materials are therefore going to cost more. If you then add in shipping costs, mate- rial prices will inevitably increase which will drive up construction costs. Labour costs will probably see a pause if people put projects on hold and there is less demand for construction work. In the longer term, if there are strict rules on immigration which
don’t allow skilled construction workers to come into this country, there will be less people available to build. This means that labour prices will increase until training programmes and apprenticeships are stepped up and we are able to train enough British workers to undertake the construction work that we need to deliver homes across the housebuilding sector.
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