Sadiq Khan: construction cost hike hits housebuilding
Housebuilding in London is at risk of stalling due to a cocktail of surging construction costs and workforce shortages, according to Sadiq Khan.
The mayor of London has warned that at least three schemes from his own housing programmes have suffered amid a one-fifth rise in construction materials costs, while firms have repeatedly warned of a shortage of skilled workers.
Khan said a combination of Brexit and Covid-19 were to blame for the double whammy, which has piled pressure on construction firms.
Housebuilding in London is at risk of stalling due to a cocktail of surging construction costs and workforce shortages, according to Sadiq Khan.
The mayor of London has warned that at least three schemes from his own housing programmes have suffered amid a one-fifth rise in construction materials costs, while firms have repeatedly warned of a shortage of skilled workers.
Khan said a combination of Brexit and Covid-19 were to blame for the double whammy, which has piled pressure on construction firms.
A new survey by the Federation of Master Builders found that 95% of builders had seen material costs rise, while 74% felt under pressure to pass increased costs on to consumers.
Government data shows that the cost of construction materials – a category including steel, timber and concrete – rose 23% last year, roughly equal to the rise seen across the previous 12 years combined.
Data from the Office for National Statistics shows that nearly a quarter of construction firms reported a shortage of workers in December, compared with the all-industry average of 14.6%.
Khan said the government should introduce a temporary visa scheme for construction workers and increase funding for affordable housing, both measures the mayor has called for in the past but which he said was “needed now more than ever”.
“Without bricks and mortar, and enough skilled workers, the excellent progress we have made in delivering the good-quality and genuinely affordable homes that Londoners need is at risk of stalling,” he added.
Khan said the visa should offer at least 12 months’ right to work in the UK and be tailored to sectors such as construction where many people work on a self-employed basis.
Geeta Nanda, chief executive of housing association Metropolitan Thames Valley, added: “The rising costs of materials we are seeing across our affordable housebuilding projects is a real challenge.
“We are working hard with the mayor and local authorities to build the homes Londoners need, but we need to address both the shortage of skilled workers and the impact of inflation on our projects.”
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