The result of the EU Referendum had financial repurcussions in the UK that rocked the housing market. Since then, a lot of people looking to take on a large project have questioned whether now is a good time to do so. Here, serial renovator and housing expert Michael Holmes answers some of the questions you may have about how Brexit could affect the construction industry.
How will Brexit effect the building on self build homes like this eco home in Devon?
What do you think is the immediate impact of Brexit on the housebuilding sector?
As long as there is a period of uncertainty, people are likely to put off the big decisions like house purchase or taking on a major self build or extension project. I suspect those who are already building or close to starting will just carry on their plans regardless.
Until there is some clarity and we can see the direction the economy will take, there will be a pause as people put off financial decisions.
What do you think in the long-term impact of Brexit on construction?
The impact on construction costs is immediate. A huge amount of materials are imported from Europe in euros and the pound has devalued, so materials – plus the added cost of shipping, as fuel prices have risen in Europe – will lead to increased construction costs. Labour costs however, will pause initially as demand for building drops due to uncertainty.
Long term, if strict rules on immigration are imposed, or there is a points-based system that doesn't allow construction workers into the county, then there won't be enough people to build anything. This will then see an increase in labour prices as demand outstrips supply. Until skills training or apprenticeship programmes step up to train enough British workers to bridge the gap, we won't have as many construction workers as we need to sustain the housebuilding sector.
What do you think will be the impact on the custom and self build sector?
If the changes that come about as a result of Brexit are minimal, and we remain in the single market with freedom on movement, then I suspect things will stabilise fairly quickly. Longer term, it will depend on attitudes to work permits. Until we increase the skill base we need to continue building at the current rate, we will have to bring in construction workers from Europe.
What should self builders who are mid-project do following the EU Referendum results?
At our recent Homebuilding & Renovating Show in Surrey, the overwhelming attitude amongst visitors was "why would I change my long-term plans because of this?" — people seem to be pressing ahead regardless.
Those who see their home as a long-term project – and not a short-term investment – are not considering the current risk to house prices. However, if you are looking to make a gain with property, you might pause to see which way things go and the direction the housing market takes. Who knows how the economy will pan out?
But for those of you who are planning a project for your long-term home, fluctuations in house prices are probably a secondary concern. Having the right house and somewhere that you really want to live should come first and foremost over any short-term gain.