House prices hit all-time high, whilst labour shortages could last for years

Average UK property price hits record high

Halifax have published their house price index for August, revealing that the average UK property price is now the highest since records began, at £262,954.

However, the annual rate of house price inflation slowed to 7.1%, compared to 7.6% in July. The report highlighted that a requirement for more space amid greater home working is one of the key factors in driving demand, and predicted that rises in house prices since the start of the pandemic look set to continue; presenting further challenges for those looking to take their first step on the property ladder.

Construction output slows amid material, labour and haulage challenges

The latest PMI data from IHS Markit and CIPS has revealed that the construction industry’s recovery from the pandemic has slowed due to material supply difficulties, a lack of HGV drivers, and labour shortages.

The data showed that activity for August stood at 55.2, from 58.7 in July; a drop of more than 11 points from the 24-year high of 66.3 in June.

The challenges faced by builders and developers doesn’t seem to be easing, either. This week Jewson warned that some items could see price rises of up to 20% in September.

The builders merchant revealed that price increases in sealants, adhesives and chemicals was having a knock-on effect on related products. Timber products are also forecast to cost between 10-20% more than current levels in the coming months.

Meanwhile, business leaders have voiced concerns that currently-experienced labour shortages could continue for another two years.

CBI Director-General Tony Danker warned that the reduction in labour levels, mainly as a result of EU workers returning overseas following Brexit, could not be fixed overnight – and called on the Government to tackle the situation.

Vistry targets £1bn revenue, and commits to carbon reduction

This week saw Vistry Group posting strong results, revealing that their Partnership business was targeting £1bn in revenue next year.

The housebuilder – formed by the merger of Bovis and Linden Homes – is also planning to open new operating regions from 2023, in the face of margin growth increasing from 4% in 2019 to 9% in 2021.

The group also committed to some ambitious carbon reduction targets, with specific details to be confirmed in 2022, and announced that they were due to hand over the first of 54 net zero regulated carbon emission homes at their development in Leamington Spa.

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