Russian invasion of Ukraine fuels construction cost increases

ONS report slowdown in annual house price growth

The Office for National Statistics published their house price index for March this week, revealing that annual property value growth reached 9.8%, down from 11.3% in February.

All UK regions experienced house price growth over the past twelve months, with the average property value reaching an average cost of £278,000 – £24,000 higher than this time last year.

Wales was the best performing region, at 11.7% growth, followed by Northern Ireland (10.4%), England (9.9%) and Scotland (8.0%).

Ukraine crisis drives cost inflation

The ongoing war in Ukraine has begun to be felt in the cost of construction, according to Gleeds.

The firm’s latest Spring 2022 Market Report found that 87% of survey respondents reported that prices had gone up as a result of the conflict, with some schemes stalling due to ongoing uncertainty.

Other reported challenges include reduced availability of materials, supply chain disruption and labour cost escalation.

Meanwhile, cost increases are resulting in builders merchants racking up record sales, according to the latest Builders Merchant Federation Builder Merchants Building Index.

Sales have increased by 17.7% in the first quarter of 2022; but the volume of goods sold has risen by just 1.5% over the same period.

Vistry expect booming profits, as Countryside post loss

Housebuilder Vistry has revealed that full-year profits are expected to increase to £415m, following rising prices and strong forward sales.

The firm also reported average weekly private sales rates of 0.86 – 15% higher than for the same period over the previous year.

Meanwhile, Countryside has posted a £181.5m loss in the first half of the year, as fire safety remediation costs impacted the bottom line.

The mixed-tenure housebuilder also revealed that it had put aside £109m and set up a standalone division to meet ‘developer pledge’ demands.

NHBC report rise in private registrations

The National House Building Council (NHBC) has revealed that private registrations have increased by 31% in the first quarter of 2022 against the same period last year.

Reporting a total of 45,991 new home registrations across all tenures, the insurance and warranty firm also reported new home completions in the quarter falling by 4%, due to ongoing supply chain challenges.

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