Price rises have been frightening
The biggest challenge we face is materials, availability and, of course, the cost. There have been dramatic and frightening price rises. It’s every month and we didn’t see that coming. We’ve never experienced anything like this. It’s put an enormous stress on the programme of works and programming the materials for those works.
We’re now giving some of our suppliers six to nine month schedules, which is very difficult. You were going from a two day turnaround from order up to a week, maybe two at the most for materials. But now we’re going to three months. Now the time is spent trying to figure out when we need the materials and what we’re finding is that we have too much on site. It’s a cashflow issue.
But it’s better to have the materials there than to be looking for them. When you look at a one-off house build, they just can’t get materials. You would be advising someone to wait 12 months. People may be starting to stockpile a little bit rather than waiting for materials to be delivered. Timber and plastics are over double the price. It’s not sustainable.
Michael Raggett, Managing Director – Raggett Homes, Kilkenny
Housebuilding is close to capacity
The obvious issues are materials, labour and planning. Some would say housebuilding is close to capacity at the moment due to labour and materials. Utilities are a big issue too, they seem to be close to capacity as well. There’s a question mark over how utilities are going to be able to cope with an increase in capacity. Labour is worrying.
Long-term we need to encourage a lot more young people into the industry. Focus on getting into schools to encourage and show them the advantages of a career in construction. It’s a very satisfying career for young people but it’s probably something a lot are switched off to at the moment. The education system is not encouraging trades because they are more third level focused. There needs to be a focus on encouraging young people to look at trades and construction again.
The industry and conditions have moved on a lot. It’s a very sophisticated system now compared to 20 years ago. There are long-term and secure career options there. Because of the lack of availability, there will always be employment if you have a trade, even in the downturns. We need young people to look at construction as an option for the future. Expectations around careers have changed, but construction is a viable and enjoyable option for people who like practical work and want to work with their hands. We need to stop knocking it as a career.
The planning system, with the SHD process and judicial reviews, it’s also in a very poor state at the moment. It has come close to breaking down. There are changes coming in the planning system but there are definitely major issues there for housebuilders. It’s adding an element of risk that the industry can’t afford to be taking.
If the risk can be taken out of the planning system it should be able to impact on costs and the cost of land. At the moment speculators are the only ones who can afford to take that risk. If the planning risk could be removed, as much as possible, that should reflect on the over all cost of housing.
Alan Hora, Director – Hora Homes, Meath
Infrastructure is a challenge
The lack of infrastructure, such as for example waste water treatment, link roads, access routes, can be a barrier which restricts homebuilders from applying for planning approval in the first place. Homebuilders cannot access or afford the necessary upfront finance required to eliminate such challenges.
The Housing Infrastructure Services Company is resourced to assist and facilitate homebuilders to deliver the required infrastructure, both on-site and off-site, using patient capital, the fees for which are not payable until the sale or first lease of the homes involved.
Niall Morrissey, Chief Executive Officer – Housing Infrastructure Services Company, Cork