Could Brexit increase modular housing costs?

Modular housing could help reduce the impact of rising material and labour costs, which has been forecast to hit housebuilders following Brexit.

With the UK deciding to leave the EU, a fall in the value of the pound, increased trading tariffs on raw materials from Europe, and the end of the freedom of movement- could all increase the cost of housebuilding. In January 2017, 70% of builders reported a rise in material costs due to the value of the pound. Current research from the Federation of Master Builders (FMB) found there had been a 22% increase in the cost of Spanish slate and a 20% rise in timber costs. A number of housebuilders/developers have warned of a ‘skills shortage’ following the UK’s exit from the EU.

So how can modular housing reduce the impact of rising material costs?

‘James Lidgate’-Head of housing at Legal and General Capital (modular housebuilder) felt that modular construction could negate some of the risks to housebuilding post Brexit.

Unlike the more traditional methods of housebuilding-modular construction is faster and far less labour intensive. Given that 11% of UK construction labour comes from the EU – and this proportion is far higher in London and the South East – and the shortage of skilled labour that currently exists, these benefits of offsite construction may negate some of the risks associated with a structurally different labour force post-Brexit. Modular housing using component parts sourced from abroad will arguably increase in price and potentially reduce the perceived cost benefit over traditional housing.

“Without innovative solutions to the housing market crisis – like modular building – we will never build the amount of new homes required”.

That being said, with so many of the construction workforce being EU migrants (many of whom will leave the UK), the construction industry may increasingly rely on modular construction as it requires fewer workers on site.

“Increased demand plus higher input costs will inevitably lead to higher costs of modular homes therefore.”




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