A No Deal Brexit could have a serious impact on the home building industry by causing the price of materials to rise and lower workloads due to less demands, a leading industry body poll suggests.
The latest research from the Federation of Master Builders (FMB) asked about the impact of a No Deal and found that over half of respondents, some 53%, said it will lead to higher prices for materials.
Some 29% said that they believe it will lead to lower workloads and enquiries and 26% said it would result in less access to skilled workers.
When asked how best the new Prime Minister could prevent an economic downturn later this year, 87% said by reducing VAT on repair, maintenance and improvements, and 36% said by making more money available through Government funding schemes aimed at SME house builders, such as the Home Building Fund.
The same number, 36%, said by reforming the Apprenticeship Levy so more SMEs can train apprentices, 30% said by investing funds in local authority planning departments to speed up the planning process and 25% said embarking on a national programme of social house building.
‘As the Conservative leadership contest continues, construction SMEs are worried about the potential impact of a No Deal Brexit, which would have immediate and potentially disastrous consequences for the construction industry,’ said Brian Berry, FMB chief executive officer.
He pointed out that it is no surprise that material prices are the biggest cause for concern as widely used building materials such as timber are largely imported and any disruption to that would lead to soaring prices and delays to construction projects.
‘More broadly, a significant proportion of construction SMEs think that a No Deal Brexit would result in lower workloads and enquiries as confidence in the economy might wobble as people abandon plans for new projects until the UK is on a steadier footing,’ he said.
‘However, the next Prime Minister can guard against any potential economic downturn by stimulating activity in construction and house building. Construction SMEs believe that the best way to do this would be to slash VAT on housing, renovation and repair work from 20% to 5% which would help tempt home owners to finally commission the home improvement projects they’ve been putting off due to Brexit-related uncertainty,’ he explained.
‘This would give a much-needed boost to the construction sector and the wider economy. The next Prime Minister should also make more money available to SME house builders through government funding schemes and stimulate apprenticeship training through fundamental reforms to the Apprenticeship Levy,’ he added.
‘Once elected, the new Prime Minister has a responsibility to steady the economy. There’s no better way to do that than investing in construction and house building, which would boost economy,’ he concluded.
