Ongoing supply chain issues and a shortage of skilled labour are slowing down housing construction in London, The London Free Press reports. Despite record levels of demand for new homes, the number of ‘starts’, when the builders break ground, has fallen significantly, even though a rising number of permits are being issued.
Although the rest of the country is experiencing similar problems, in London, where demand for new homes has risen sharply since the pandemic, the issue is particularly acute. There has been a 17% rise in new starts in October, compared to the same time last year.
Despite this, between January and October 2021, almost 50,053 new homes were started, which is 83% more than the same time last year and a record for London. This reflects the hectic housing market, which is barely slowing despite the end of the stamp duty holiday, which some commentators predicted would cause a cliff edge in demand.
Jared Zaifman CEO of London Home Builders’ Association (LHBA), told the publication: “(October) is the first month this year where things have slowed down a little bit. Home builders are just trying to meet the incredible amount of demand that’s in the community right now.”
He added: “Our costs to live are going up quite tremendously, (but) London, in comparison to other cities, especially in the GTHA (greater Toronto Hamilton area), is still seen as a more affordable place to live.”
Zaifman blamed the current supply chain issues and labour shortages for the delay in new starts. This is Money recently reported that major housebuilders Persimmon and Vistry have warned that costs are rising due to the ongoing delays and shortages.
Despite being proactive in securing land and permits, both companies warned that they were being affected by longer lead times and a lack of skilled workers. A combination of the ripple effect from the pandemic shutdown, the lorry driver crisis, high demand on freight transport, and Brexit, are causing a perfect storm of difficulties.
Meanwhile, Construction News reports that eight in 10 small to medium builders have had to delay work because they are struggling to access the materials they need. The latest state of trade survey by the Federation of Master Builders (FMB) revealed that 82% of builders were being affected by lack of access to basic materials.
The survey revealed that staples of the trade such as steel and cement were all becoming harder to get hold of. A further 93% expected costs to rise in the near future, and 8% have had to cancel jobs altogether after being unable to get basic supplies.
Furthermore, six in 10 have had to stop work due to a lack of skilled labour, and a further 12% have cancelled jobs because they could not find enough trained workers to employ. In particular, general labourers, plasterers, and roofers are in demand at the moment, while the shortage of carpenters and bricklayers has eased.
FMB chief executive Brian Berry said he was “struck by the sobering comments that we receive from our members who take part in this survey, about the impacts of these shortages on their businesses, and in some cases, on their mental health.”
Mental health is a growing issue in the construction industry, as a recent survey revealed that construction workers are 3.4 times more likely to commit suicide than workers in other sectors. Builders who are paid per day, or even per square metre of work, are under a lot of pressure to complete jobs quickly.
For those who are self-employed and work outdoors, they can be forced to stop production by adverse weather conditions. This lack of control, combined with time pressures, can build up intolerable stress and lead to anxiety and depression. There have been calls for a better support system for workers.
In some more positive news, the timber shortage that was affecting trade earlier in the year has eased somewhat, although distribution remains a problem, because HGV drivers are still in short supply. Despite firms offering joining up bonuses and more attractive salaries, recruitment levels remain low.
In spite of the multiple problems facing the building sector, Jared Zaifman of LHBA remains optimistic about the future. He commented:
“I think the level of growth that we’re going to be seeing in London and region for the next number of years is going to be staying consistently high. Despite the challenges of keeping up the pace, the industry is still aggressively looking to meet that demand.”
2022 looks set for an interesting year in construction, as high demand competes with the ongoing labour and materials shortages.
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