N E W S / W H AT ' S N E W
Material price hikes hit timber and glazing Inflation is taking its toll on self-builders in NI and ROI. A THIRD OF SMALL UK building firms say that soaring material prices are squeezing their margins, according to a survey by the Federation of Master Builders (FMB), with almost a quarter passing these increases on to consumers. In NI the greatest material increase was recorded in relation to the cost of timber, while in ROI news reports indicate it is the price of insulation products that has led the charge in rising costs. However, according to the ROI Central Statistics Office’s wholesale price index for building and construction materials, there was an increase between August 2016 and August 2017 of 21.7 per cent for glass and of 14.7 per cent for sand and gravel. Plaster and structural steel also recorded significant increases, in the order of 8.5 per cent and 7 per cent respectively. Since the depreciation of sterling following the EU referendum in June 2016, construction SMEs in the UK have in fact reported a range of material price increases to the FMB.
Small building firms were asked which materials had increased the most and the results were as follows: 1) Timber 2) Insulation 3) Bricks 4) Blocks 5) Windows 6) Plasterboard / slate (joint sixth) 7) Boilers and radiators 8) Porcelain products The impact of these material price increases have been wide-ranging
and include: l 85 per cent of builders think material price rises could drive consumers to hire rogue traders in an effort to save money on their building projects; l One third of construction SMEs (32 per cent) have had their margins squeezed; l Almost one quarter (22 per cent) have been forced to pass material price increases onto their clients, making projects more expensive for consumers; l More than one-in-ten builders
report making losses on their building projects due to material price increases. Brian Berry, Chief Executive of the FMB, said: “We’re calling on home owners to hold their nerve – they’re better off commissioning a more modest project from a professional builder than a high spec project from a cowboy. Don’t take the risk.”
Cash-in-hand seems widespread WITH AN UPTAKE IN BUILDING and renovation activity, research by plentific.com shows that the black economy could be alive and well with 45 per cent of NI adults admitting to having paid a tradesman in cash to get a cheaper deal. Plentific is a website that allows homeowners to find and pay tradesmen online; the research was conducted by Opinium Research on the 21st July 2017 fielding 2,006 adults throughout the UK. The finding does not imply that cash payments are a means to subvert paying value added tax, but it does raise the question. VAT is applicable on renovation projects in NI but is refunded on new builds. The majority of those who had paid cash in hand in NI (over 55
per cent) admitted to doing so in the past 12 months. Throughout the UK adults aged 55 and over were the most likely to pay cash in hand (56 per cent) compared to young adults aged 18 to 34-years-old (33 per cent). According to the research: “While this suggests that the older generation may be more thrifty when it comes to hiring a tradesman, it could also be a reflection of the changing times, with cash payments becoming far less frequent in today’s economy.” Stephen Jury, spokesperson for Plentific, commented: “Tradesmen are often painted in a bad light by the media when it comes to things like cash in hand payments. Our statistics show that actually, it can be the customers who are driving this option to save a few pounds.”
WINTER 2017 / SELFBUILD / 15