U.K. house builders face shortages and cost hikes as Brexit, virus disrupt trade

U.K. house builders are facing a shortage of construction materials and mounting costs as disruptions caused by the coronavirus and Brexit start weighing on the industry.

Escalating prices for shipping and delays at some British ports are having a major impact amid high demand, according to trade body Builders Merchants Federation, which says its members manufacture 76% of building products in the U.K. The price of timber has soared by an average 20% and there’s evidence of limited availability of roofing materials, it said.

“The longer the issue goes on, then the more the larger house builders will be impacted,” said BMF Chief Executive Officer John Newcomb. Smaller builders have felt the brunt so far, but “we are doing everything we can to try and improve the situation and increase supplies to meet current demand.”

The challenges come at a crucial time for builders as they struggle to meet demand for homes before a tax break for buyers expires at the end of March. While the sector is one of the few allowed to keep operating during the latest national lockdown that began in January, a boom that lifted house prices to a record in 2020 looks set to falter as purchases are increasingly unlikely to complete before the tax holiday’s deadline.

Persimmon Plc, the U.K.’s largest housebuilder, warned earlier this month of uncertainties relating to disruptions from the pandemic and the broader impact of the free trade agreement between the European Union and the U.K., despite the “resilient demand” for new homes.

Freight companies are rejecting one in five contracts to take goods from France to the U.K. as border rules put in place after Brexit add to delays in moving goods across the English Channel, according to data from global logistics platform Transporeon.

“We are facing a perfect storm caused by a number of factors, including a shortage of containers because of unprecedented demand, ships mothballed with their containers and crew, and carriers reluctant to take bookings for the U.K. because of the congestion at U.K. ports,” Mike Tattam, sales and marketing director of family-owned business Lakes Showering, said in a BMF statement Tuesday.