House prices rise by 10% in a year, as material and labour costs surge

Official house price figures puts Wales on top

This week saw the Office for National Statistics publish their house price index for February 2022, revealing that the average property price has risen by 10.9% in the year.

At £277,000, the average house price is £27,000 higher than this time last year. Wales continues to experience strong house price growth; at 14.2% in the year, it surges ahead of England (10.7%), Scotland (11.7%) and Northern Ireland (7.9%).

London continues to be the slowest growth region, with an annual increase of 8.1%.


Labour and material costs continue to surge

The effect of the war in Ukraine “is only beginning to be felt by UK construction”, according to the latest Construction Product Availability Statement by the Construction Leadership Council (CLC) this week.

The report also noted that price inflation of 10-15% has been experienced over the past three months in energy-intensive materials such as steel, cement and glass.

Meanwhile, payroll specialist Hudson Contract has revealed that labour rates on building sites have hit record levels in some areas, with London, the South East and the East Midlands breaking the £1,000 per week barrier.

Source: Hudson Contract

Turner & Townsend have also increased their tender price inflation forecast to 8.5%, due to soaring energy prices and the war in Ukraine.

This represents a near-doubling of the 4.5% price inflation prediction within T&T’s Winter 2021/22 prediction. The report goes on to argue that “pragmatic, flexible procurement and greater collaboration with the supply chain” was needed to overcome industry cost challenges.


Contractors and architects should foot bill for cladding repairs, says CPA

Following last week’s back-and-forth between the Government, developers and product manufacturers, the Construction Products Association have hit back by stating that all parts of the construction industry bear responsibility for the crisis.

In a letter to Michael Gove, CPA Chief Executive Peter Caplehorn said that “both the Government and industry must be doing all they can to ensure that all building safety defects are addressed in any remediation programme.”

We believe it is essential to engage other sectors of the industry in the discussion because in the design, procurement, construction and maintenance of any building there will have been a complex set of interactions leading to the final built asset.

PETER CAPLEHORN, CHIEF EXECUTIVE, CONSTRUCTION PRODUCTS ASSOCIATION

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