Obscene increases in building/construction materials prices

[Jeff1976]

I work in construction building petrol stations and were having so much trouble finding materials even some kerbstones are really hard. Just finished one in milton keynes and we had to leave lots of old kerbs in as no new ones at the time. Just started a new one in essex knocking the shop down tomorrow dreading how much we cannot get throughout the project and were there until December

[anotherbigspender]

Trophy Husband said:

blueg33 said:

Don’t start me on land banking. People who claim developers sit on consented land are idiots without the first blue of development economics.

I'm not sure of your point to be honest.
Developers do sit on land, both consented within LPO and begging for consent due to demand outside of current LPO.
Housebuilders would be fools to compete with themselves or their rivals if they both have consented land areas in proximal areas. No point in having two half completed developments up to base course waiting to be finished/sold when you can nail
one, gain 38/278 adoption and move on.
Development economics is about keys in doors, LA adoption of roads, adoption of sewers etc.
Land banks are speculative in the hope of being drawn into LPO. Pay a farmer 30k for 10 acres now. Put 300 homes on it in 20 years.
Always remembering that there is one thing that can never be built. Land.

Horsest. All of it.

Do you have the number of the farmer who’ll sell land for £3k an acre? I’d like to speak to him

[ben5575]

blueg33 said:

Don’t start me on land banking. People who claim developers sit on consented land are idiots without the first blue of development economics.

[Welshbeef]

Trophy Husband said:

I'm not sure of your point to be honest.
Developers do sit on land, both consented within LPO and begging for consent due to demand outside of current LPO.
Housebuilders would be fools to compete with themselves or their rivals if they both have consented land areas in proximal areas. No point in having two half completed developments up to base course waiting to be finished/sold when you can nail
one, gain 38/278 adoption and move on.
Development economics is about keys in doors, LA adoption of roads, adoption of sewers etc.
Land banks are speculative in the hope of being drawn into LPO. Pay a farmer 30k for 10 acres now. Put 300 homes on it in 20 years.
Always remembering that there is one thing that can never be built. Land.

Please show me where you can buy (in U.K.) 10 acres of land for £30k.

[TTmonkey]

Clout nails are going through the roof!

[anotherbigspender]

Welshbeef said:

Please show me where you can buy (in U.K.) 10 acres of land for £30k.

Hey, get in the queue. I asked first

[red_slr]

[Flooble]

One of the points for timber going up was more demand from the developing world. Why has that happened all of a sudden? Serious question, not trolling!

The coronacrisis is the weirdest depression I have ever seen - demand is up, prices are up. In an ordinary depression demand collapses for various reasons that economists try to explain. In this one, we have had enforced idleness in what one might describe as "non-productive" industries (airlines, retail, hospitality etc.) and, at least in theory, lots of extra people dying. All things you would expect to depress demand, yet instead it's doubled (or more).

Or is it just all the fiat currency finding somewhere to go?

[m3jappa]

Someone earlier on commented on a conspiracy about price rises and inflation.

Got to say i was starting to think that.

There does appear to be a perfect storm of events to cause prices to rise excessively.

Its very scary tbh and i dont see an end any time soon. From what i gather as well its not just materials for building, it seems everything is going up.

Luckily for me we do mainly paving and its not too bad. theres an imminent 6.5% rise from marshalls. cement has been harder to get but we've managed to get it, and i dont believe the price of that has actually gone up (yet) .aggregates are afaik the same.
type 1 harder to get but have a good suppler of type 1 crushed so thats good.
porcelain has so far remained the same but im hearing the factories are struggling to keep up with demand so i expect some increase.

No doubt the muck away will shoot up, they love an increase.

Thankfully dont do a lot with timber as thats by far the worst. Must be a nightmare for general builders though as it appears almost every product has seen an increase

[mark beavan]

TTmonkey said:

Clout nails are going through the roof!

Good one.

[red_slr]

m3jappa said:

Someone earlier on commented on a conspiracy about price rises and inflation.

Got to say i was starting to think that.

There does appear to be a perfect storm of events to cause prices to rise excessively.

Its very scary tbh and i dont see an end any time soon. From what i gather as well its not just materials for building, it seems everything is going up.

Luckily for me we do mainly paving and its not too bad. theres an imminent 6.5% rise from marshalls. cement has been harder to get but we've managed to get it, and i dont believe the price of that has actually gone up (yet) .aggregates are afaik the same.
type 1 harder to get but have a good suppler of type 1 crushed so thats good.
porcelain has so far remained the same but im hearing the factories are struggling to keep up with demand so i expect some increase.

No doubt the muck away will shoot up, they love an increase.

Thankfully dont do a lot with timber as thats by far the worst. Must be a nightmare for general builders though as it appears almost every product has seen an increase

We are taking 3 loads of indian stone in very shortly in anticipation of a major price increase. HTH.

[blueg33]

Trophy Husband said:

blueg33 said:

Don’t start me on land banking. People who claim developers sit on consented land are idiots without the first blue of development economics.

I'm not sure of your point to be honest.
Developers do sit on land, both consented within LPO and begging for consent due to demand outside of current LPO.
Housebuilders would be fools to compete with themselves or their rivals if they both have consented land areas in proximal areas. No point in having two half completed developments up to base course waiting to be finished/sold when you can nail
one, gain 38/278 adoption and move on.
Development economics is about keys in doors, LA adoption of roads, adoption of sewers etc.
Land banks are speculative in the hope of being drawn into LPO. Pay a farmer 30k for 10 acres now. Put 300 homes on it in 20 years.
Always remembering that there is one thing that can never be built. Land.

So you know. I am a house builder, been land and planning director and MD at some of the largest house builders. I can categorically state that land banking does not happen in the way you think it does and in the way it’s reported.

Like I say, only people with zero idea about development economics think that developers dig on consented land. Fact is it’s exceedingly expensive to get an implementable consent and consent usually triggers land purchase. That means you have to build as fast as you can because your WIP and ROCE takes a massive hit and that means your business is not performing.

Yes there are unimplemented consents but, they will be on large sites. If you have a 200 unit site, you are looking st 3-4 years production because of build and sales rates. So for 4 years it will show consents that have not been implemented.

[Welshbeef]

m3jappa said:

Someone earlier on commented on a conspiracy about price rises and inflation.

Got to say i was starting to think that.

There does appear to be a perfect storm of events to cause prices to rise excessively.

Its very scary tbh and i dont see an end any time soon. From what i gather as well its not just materials for building, it seems everything is going up.

Luckily for me we do mainly paving and its not too bad. theres an imminent 6.5% rise from marshalls. cement has been harder to get but we've managed to get it, and i dont believe the price of that has actually gone up (yet) .aggregates are afaik the same.
type 1 harder to get but have a good suppler of type 1 crushed so thats good.
porcelain has so far remained the same but im hearing the factories are struggling to keep up with demand so i expect some increase.

No doubt the muck away will shoot up, they love an increase.

Thankfully dont do a lot with timber as thats by far the worst. Must be a nightmare for general builders though as it appears almost every product has seen an increase

Question
1. Have all staff who were furloughed been taken off and back into work.
2. Mothballed plants - long pre Covid - have they been restarted if not why not
3. Is the global pressure on Brazil to stop chopping down the Amazon hopefully stopping supply (meaning actually there was a massive amount of supply from Amazon in the market)
4. Timber issues - is the fact more and more houses being made more insulated/timber frame without wood producers planting ample stock year in year out.
5. Is climate change causing issues /slower growing woods/yields.

[spanky3]

Expect inflation to accelerate.

Back in 2009 Gordon Brown used £200B of quantitive easing to bail out the banks. Richi has now taken us to £900 Billion. All those newly printed billions handed out for covid are now burning a hole in people's pockets and pushing prices of everything up - building material, labour and fast cars alike.

Since inflation shrinks debt there isn't much of an incentive for the government to reign it in just yet, quite the opposite in fact.

[anonymous-user]

blueg33 said:

On the housing crisis here are some stats borrowed from a white paper last year

Do you have the link to that handy? Ta

[blueg33]

speedyguy said:

blueg33 said:

On the housing crisis here are some stats borrowed from a white paper last year

Do you have the link to that handy? Ta

Can’t do it from my phone. Will add the link in the morning.

Edit - This is the link I used, other sources are available from Shelter etc


https://edaroth.co.uk/wp-content/uploads/2020/01/E...

Edited by blueg33 on Tuesday 11th May 09:38

[Welshbeef]

spanky3 said:

Expect inflation to accelerate.

Back in 2009 Gordon Brown used £200B of quantitive easing to bail out the banks. Richi has now taken us to £900 Billion. All those newly printed billions handed out for covid are now burning a hole in people's pockets and pushing prices of everything up - building material, labour and fast cars alike.

Since inflation shrinks debt there isn't much of an incentive for the government to reign it in just yet, quite the opposite in fact.

But this is more about simple lack of availability

[Gareth79]

I opened a spreadsheet I created in Jan 2020 with some pricing for building a workshop. Back, then, 2x4 from a local sawmills was £2.04/m (plus vat), today on their website it's £2.91, so yup, almost a 50% hike.

[Mr Whippy]

Welshbeef said:

Trophy Husband said:

I'm not sure of your point to be honest.
Developers do sit on land, both consented within LPO and begging for consent due to demand outside of current LPO.
Housebuilders would be fools to compete with themselves or their rivals if they both have consented land areas in proximal areas. No point in having two half completed developments up to base course waiting to be finished/sold when you can nail
one, gain 38/278 adoption and move on.
Development economics is about keys in doors, LA adoption of roads, adoption of sewers etc.
Land banks are speculative in the hope of being drawn into LPO. Pay a farmer 30k for 10 acres now. Put 300 homes on it in 20 years.
Always remembering that there is one thing that can never be built. Land.

Please show me where you can buy (in U.K.) 10 acres of land for £30k.

Chances are the developer puts dibs in with the land owner many years in advance and an agreement is made on that basis.
In one case in believe it was 20yrs+ so quite a time... but likely based around offering a market rate + X% at the time it’d be able to be developed.

Owning land for 20 years might seem like a cash saving enterprise but it’s dead money.
Agri yields are really low and agri land hasn’t moved much for a decade.
Easier to just buy the land at market rates when it’s ready to go.

[Mr Whippy]

ben5575 said:

blueg33 said:

Don’t start me on land banking. People who claim developers sit on consented land are idiots without the first blue of development economics.

I believe they were in some areas weren’t they?

Which is why they brought in rules to accelerate consent time-outs to something like 2 years from 5 years or something like that?