East Anglian builders hit by increased costs of bricks, blocks and insulation
- Credit: Copyright: Archant 2017
Small building firms across the region are seeing their margins squeezed as material costs sky-rocket amid shortages and the Brexit-weakened currency.
And more than one in 10 businesses said they had to make losses on projects due to material costs while 22% said they had to pass costs on to customers, according to the Federation of Master Builders.
Builder Marcus Liddington, who runs three-man firm Liddington Builders, said upping prices was not always possible because of already-agreed contracts or the risk of becoming uncompetitive.
'The price of insulation went up about 10 or 11% in April and then another 11.5% last Monday, which is a rise of about 22% in three months.
'You have to go back to the customer and say 'I am sorry but the cost of materials has gone up by 22%' and they are within their rights to point to the contract you have already signed,' said Mr Liddington, of Heacham in west Norfolk.
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'You can cost a small rise in but not 22% – if you did you wouldn't get any work.'
With developers looking to feed a national demand for houses, there is pressure to complete projects despite rising costs.
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Richard Simpson, sales manager at builders' merchant J Medler in Felthorpe outside Norwich, said shortages in certain materials, including specific types of brick, and currency changes were behind cost rises.
He said: 'A lot of factories were mothballed during the recession and it takes time to get them back into action.
'There can be a wait of up to 26 weeks for an order. That means customers [builders] might have to buy a different brick which could be more expensive.'
Edward Gilder, land and planning manager at Lowestoft-based homebuilder Badger Building, said the cost of materials such as timber - which is largely imported - had squeezed builders.
'If you are a contractor and have agreed to do a job for a fixed price it will have to come out of your profit margins,' he said. 'If you are a housebuilder materials are a cost which you factor in when deciding to buy land, so you give yourself about 10% leeway.
'You cannot pass the price on to the customer as new-build houses compete against the market price for that area.'