The social housing sector is bracing for a shortage of bricks, mortar and other materials if we end up with a no-deal Brexit.
the regulator has already written to Housing Associations asking them to prepare for Brexit listing six key areas which the regulator says it has “identified based on its analysis and contacts with registered providers”.
- A deteriorating housing market
- Interest, inflation and currency risk
- Access to finance
- Availability of labour
- Access to materials and components
- Access to data
The regulator expects registered providers to have: identified the risks to which their businesses would be exposed; stress-tested their business plans to reflect these; and identified specific, deliverable and timely mitigations, to ensure viability is maintained and tenants and social housing assets are protected.
In 2017/18, housing associations completed 41,566 homes, according to the NHF, including large quantities of bricks and mortar, but also cement, windows, kitchens, plug sockets, timber and tiles and labour.
Many of these things came from, or through, Europe. And as the spectre of a no-deal Brexit rises, the question becomes: will they still be available? How much will they cost?
Inside Housing have reported that:
“A 2016 study by the Department for Business, Energy & Industrial Strategy estimated that 62% of building materials imported to the UK came from the EU. If no deal is agreed, imports may be limited or subject to extra duties, which could lead to shortages and increased costs passed down the supply chain in the years to come.
Meanwhile, Office for National Statistics figures show that one-third of workers on construction sites in London are from overseas, with 28% coming from the EU. Across the whole country, about 7% of workers in the construction industry are EU nationals. Trade bodies say that in housebuilding this is even higher – especially in the capital.
At the end of last month, the construction sector’s biggest trade bodies urged the government and MPs to agree terms with the EU, warning that a no-deal Brexit could lead to a 4% drop in output.
Any rise in products and materials prices would predominantly affect imports, and instantly, as a result of a depreciation in sterling,” warns Rebecca Larkin, senior economist at the Construction Products Association.
“Given the 15-20% depreciation we saw after the EU referendum, a similar depreciation would not be unexpected in the event of a no-deal outcome at the end of the month.”
The UK is highly dependent on imports for certain products, including timber, structural metals such as steel and aluminium, heating and ventilation equipment and electrical components.”