Reasons behind exorbitant construction costs advice, Property expenses, Create house refurb budget
The reasons behind exorbitant construction costs
29 December 2023
The housing market was enormously affected by the pandemic and geopolitical events in the past years. As a result of the impossibility of owning your own house or paying the mortgage, some are forced to move in back with their parents or share flats with as many people as possible to lower living costs. Unfortunately, things are not bright for people who want to build a house, too, since the average cost of such a plan starts from £500,000 and can easily reach £1 million.
Of course, the final costs depend on a series of factors, from the material used to the type of construction you wish for. The prices will definitely increase if you use the services of professional architects and engineers.
Regardless, there are many reasons behind high prices for construction besides the sensitive global situation, and they’re perfectly understandable. Well, at least some of them.
The weather affects the project working program
The weather is a typical unfortunate event that hinders construction workers from continuing their jobs since this would not only affect the quality of construction but also put their lives in danger. And considering the weather in the UK, when rain is a daily occurrence, we can understand how these delays have an impact on the number of days to pay. As projects are slowed down due to heavy rain, and it takes more time for the materials on the site to dry, you may need to pay more than agreed on initially.
At the same time, working on rainy days is significantly dangerous for workers since they’re exposed to slips, trips and falls. But employers who oblige them to work in poor weather conditions aren’t correctly ensuring safety, which can count as a breach of duty. Therefore, they can learn how to sue for compensation in case of injury on the site due to the slippery parts of the construction site.
The changing costs of raw materials
The raw materials used in construction are constantly fluctuating in terms of price due to various factors. The costs of timber in the UK were relatively constant before the pandemic, but in 2020, it experienced a skyrocketing increase of almost double the initial price. Imported sawn and planed wood had the most extreme price increase, while particle boards or plywood are still more affordable after the boosting costs. But even from 2021 to 2022, these prices increased, according to Statista, and they might continue with the same dynamic as a whole.
Price increases occurred to steel and copper, too, by even much more than wood. Therefore, it’s significantly challenging for people to build their own houses since the average cost from only two years ago is long gone, and you have to pay more than double the price now.
The time of procuring materials
If the price of materials is uncomfortable to look at, you will be surprised at how long it will take to procure them from manufacturers without the involvement of intermediaries. That’s because suppliers, the ones providing the services from the company to the client, might be prone to delays due to a lack of employees, regulations concerns and preferential treatment.
Miscommunication is a severe problem in the construction field because companies aren’t used
to announcing delays or fixing issues regarding wrong-ordered products. At the same time, the underperforming customer service is usually not solved due to ignorance or lack of financial resources and vision. Therefore, there’s not enough transparency that facilitate proper investments and projects finished in time to save money.
The burden of hidden costs
Building a house will have hidden costs due to planning applications and site challenges like any other project. But there’s more to that, so you should expect the following fees to be required during the construction:
- The stamp duty;
- The topographical site survey;
- The planning permissions;
- The self-build insurance;
- Additional external works;
The hidden costs will increase depending on how much your project will elongate. Still, you must take your time to properly finish the building in order to ensure safety and durability. So, what you can do best to avoid these prices is to do thorough research before starting and see how much you can cover these unexpected costs.
You can also ask for the advice of friends and family or even people on the internet regarding their own projects, so you will have an accurate price for better forecasting. If you can, consult professionals in the building industry for more guidelines since some might freely offer their advice. They can provide you with a broader perspective on what to anticipate from the initial budget to the final plan.
The lack of proper training for workers
Finally, one of the most prominent issues in construction is the labour scarcity. In the UK, only 6% of the country’s workforce accounts for construction workers, and has reached this low level due to rising inflation and labour shortage. Indeed, salaries are not sufficient, and the working conditions are poor, with companies that don’t provide the correct working equipment or even adequate tools and machinery.
Companies also consider there’s a skill shortage at the moment in construction since most are understaffed, and the majority say they struggle to hire people who meet their competency requirements. Some consider that workers need to improve their digital skills, and basic technology-know how since machinery and devices used in construction have now developed.
Unfortunately, the ageing of the construction workforce doesn’t help the industry go towards improvement especially since young people seek jobs that are better paid to sustain a decent lifestyle. However, electricians, carpenters and plumbers are in highly demanded at the moment, which would help workers get better pay.
Reasons behind exorbitant construction costs – Final considerations
Several factors have heavily challenged the construction industry, from the pandemic to geopolitical issues. These triggered a series of problems, from the raw material shortage to the lack of labour and skilled workers. These eventually made buying a house extremely expensive, as costs for the materials and planning doubled in only two years.
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