Builders on volatile ground after weakest growth in industry in six months
HBF chief executive Neil Jefferson laments a planning system that “has become increasingly ineffective in approving and processing sites to the point where construction can begin.” Developers also face another property tax of £ 200million per year starting next April.
The industry has only just dodged the potential chaos over product safety standards after the use of EU Kitemarks was extended for a year in August. Products under the new UKCA brand, untested due to lack of capacity, could have crippled the industry. Graham Watts, Construction Industry Council, said: “It was creating problems because the industry is far from ready for this new brand. ”
Other lingering issues include the surge in professional compensation premiums for the industry since the Grenfell tragedy, and the Carillion collapse in 2018 completely excluded many insurers from the IP market. Customers are also asking for more coverage, as premiums have “skyrocketed,” according to Watts.
“I’ve spoken to many companies that have worked in high rise residential buildings that say they won’t touch it now because, first of all, they can’t get insurance and, second, they are seriously concerned about potential liability, ”he said.
As the Department for Business considers a potential program to reduce insurance costs and says it is working with industry on the issue, a traditionally low-margin industry is under increasing pressure. According to insolvency firm Begbies Traynor, the number of builders in “significant financial distress” jumped 20% during the pandemic to 85,376 – more than a quarter of the total.