Obscene increases in building/construction materials prices
Discussion
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.
Not strictly true, whilst not so prevalent in the UK, there are many examples worldwide of land being reclaimed from the sea. A couple of notable examples are Dubai and Hong Kong. So, yes, Land can be “built”.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.
red_slr said:
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.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
And what happened then?
Then what happened 6 months later?
It’s a supply shock and a demand shock combined with panic/FOMO/fear of inflation buying.
“Wait till next year to build my garage? It’ll cost me £30,000 instead of £15,000!
I’d best build it ASAP and add to the demand side a bit more!”
Welshbeef said:
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 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.
We've distributed £400B additional pound notes over the last 12 months so there's an awful lot of money around right now, just look at used car prices or supercar sales being the highest ever and you can see supply/demand isn't just affecting building materials.
Mr Whippy said:
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.
I’ve only ever found one website that has land coming up for sale/auction - there must be others / and ones not offering hundreds of acres for millions. 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.
red_slr said:
We are taking 3 loads of indian stone in very shortly in anticipation of a major price increase. HTH.
From what i gather sandstone has really shot up and like you say more increases are expected. Its now a similar price to porcelain. The worry is that means the porcelain just goes up by default......One thing i have encountered thats gone up a lot is granite. We use a random length 250x125 flamed granite as an edging. it was £26 plus vat a meter. It is now £48 plus vat a meter!
Thats an incredible increase, im told thats because of the shipping costs from china.
m3jappa said:
red_slr said:
We are taking 3 loads of indian stone in very shortly in anticipation of a major price increase. HTH.
From what i gather sandstone has really shot up and like you say more increases are expected. Its now a similar price to porcelain. The worry is that means the porcelain just goes up by default......One thing i have encountered thats gone up a lot is granite. We use a random length 250x125 flamed granite as an edging. it was £26 plus vat a meter. It is now £48 plus vat a meter!
Thats an incredible increase, im told thats because of the shipping costs from china.
Our kitchen we eventually decided on quartz purely for one particular design (price difference wasn’t massive between the two).
Welshbeef said:
Mr Whippy said:
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.
I’ve only ever found one website that has land coming up for sale/auction - there must be others / and ones not offering hundreds of acres for millions. 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.
Ie:
https://www.wbwsurveyors.co.uk/search_results/?ord...
That landowner plotted it all off and as been selling a few hundred (iirc) acres in smaller lots over the last 12 months.
Obviously as you split it down the price/acre goes up.
There must be oodles of land around for sale but it’s not always where you’ll want it.
blueg33 said:
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 
I left the bullcarp of highways recently and back into construction supplies this month after a long break, quite interesting listening to the big shortfalls of the most basic aggregates and cement etc. I've known for a while about the wood issues 'fnaar fnaar'
Edited by anonymous-user on Monday 10th May 22:49
m3jappa said:
From what i gather sandstone has really shot up and like you say more increases are expected.
Of course they’re expected.As the price rises people fear they’ll have to pay more later. So they buy now and add to the demand side.
My neighbour is building a shed and almost took glee in telling me it’s like gold dust to get XYZ right now, but he’s got it and had to pay X + 20% or whatever.
People seemingly love to pay more right now.
Their fear is if they wait 6 months and it costs even more they’ll have waited for nothing and lost out.
So they buy now. Win win.
But as demand wanes, which it will, and supply comes up to meet demand, which it will because companies will be desperate to cash in on these prices... what happens?
The same as now, but inverted.
Welshbeef said:
I’ve only ever found one website that has land coming up for sale/auction - there must be others / and ones not offering hundreds of acres for millions.
The agricultural land for auction has a very small chance of ever getting resi consent. House builders identify what we call strategic land that has a chance in around 20 years. We take options with obligations to promote it through the planning system. 99.9 percent of the time we do not buy it until it has a consent.
Trophy Husband said:
You feel my pain!
I'm doing the groundworks for a 22 plot development and a 45 plot development. Contracts signed November 2020/May 2020 respectively after months of negotiation.
Aggregates have gone up, concrete has gone up, timber has gone up, all of my boys have squeezed a pay rise out of me that all round adds up to about £4k/month!
I'm a small independent ready mix supplier. We've had no price increase for bulk cement or aggregates. What we do have is demand exceeding supply and the Nationals seem to be using this to not supply groundworkers who negotiated close to the margin prices previously. I'm doing the groundworks for a 22 plot development and a 45 plot development. Contracts signed November 2020/May 2020 respectively after months of negotiation.
Aggregates have gone up, concrete has gone up, timber has gone up, all of my boys have squeezed a pay rise out of me that all round adds up to about £4k/month!
The likes of MV Kelly are now finding they maybe the tail, not the dog.
There seems to be a lot of whining and panicky hand wringing on here from powerfully built PH directors who don't like it when the simple laws of economics and supply versus demand screw up their second home loft conversion etc etc
I thought supercar owning lawyers/bankers/ BTL people etc on here liked it when they made a nice profit at someone else's expense???
Now they has us over a 45 gallon drum, let's see how we like it..
I thought supercar owning lawyers/bankers/ BTL people etc on here liked it when they made a nice profit at someone else's expense???
Now they has us over a 45 gallon drum, let's see how we like it..
spanky3 said:
We've distributed £400B additional pound notes over the last 12 months so there's an awful lot of money around right now, just look at used car prices or supercar sales being the highest ever and you can see supply/demand isn't just affecting building materials.
That6 400bn is sat with people with time on their hands and nothing to do. It creates demand for the sorts of things you do when you have time on your hands and everything is shut.What would normally happen is they would have been made redundant, so they wouldn't be creating that demand.
Alongside that you have a change in the things people are doing that creates it's own demand - working from home = need a bigger house, spending more time at home = need a nicer house. No commute cost = spare cash. All creates demand in a particular area of the economy.
In normal times Capitalism rides to the rescue - capital is reallocated, workers follow and supply of the things people want increases. But all those redundant workers aren't redundant, so supply isn't following demand. Businesses are waiting to see what the post-covid demand level is before making decisions.
That's before you add in the global picture - shipping costs, COVID costs and impacts, EVs etc etc
I'm just grateful I'm at about the end of a big project, so I'll be on an enforced break while it all settles down. If I'd not started I'd be seriously considering putting it back a year.
If you were in the middle of a project, you might end up walking a tight-rope keeping costs down and your builder working as their profit disappears.
m3jappa said:
red_slr said:
We are taking 3 loads of indian stone in very shortly in anticipation of a major price increase. HTH.
From what i gather sandstone has really shot up and like you say more increases are expected. Its now a similar price to porcelain. The worry is that means the porcelain just goes up by default......One thing i have encountered thats gone up a lot is granite. We use a random length 250x125 flamed granite as an edging. it was £26 plus vat a meter. It is now £48 plus vat a meter!
Thats an incredible increase, im told thats because of the shipping costs from china.
We also just brought in some extra FIBCs as I dont want to get stuck without any.
One thing the last 14 months has taught me is that you should never run out of stock.
I do think demand is going to drop off though, in fact we are already seeing it in the last 3 weeks. It seems to have really dropped off.
Blackpuddin said:
I went to my local building supplies place a few weeks back to get timber to build a wood store. I nearly fainted when he priced it up. It was actually more expensive just for the wood than it would have neen to buy a really solid pre-built store online (which is what I did). Guy in the shop said most wood on sale in the UK was imported and that prices had gone through the roof in the last year.
Somebody's having a laugh somewhere.
I'm in Sweden, a country that is 70% forest and an exporter of timber. Prices have shot-up here in the last couple of months. I thought it was basically price gouging given everyone has a DIY project or 10 on the go at the moment thanks to C19. Somebody's having a laugh somewhere.
CoolHands said:
How can aggregates and stone etc be up? Have quarries suddenly got a supply problem? Oh no, that big hole in the ground is still there. Rip-off century I’m telling you.
Whilst the "hole in the ground" may still be there most Quarries have limits put on how much material they can take out over a set period. Companies that take aggregates from the sea can only "mine" in certain areas and can only take certain amount of material.Supply and demand ffs.
Low supply. Covid19. Lots of people paid to sit around not making supplies of everything.
High demand. Covid19. Lots of people bored with lots of free money to spend on supplies of everything.
Businesses, can charge what people are willing to pay. People are being irrational, great!
It will end.
Low supply. Covid19. Lots of people paid to sit around not making supplies of everything.
High demand. Covid19. Lots of people bored with lots of free money to spend on supplies of everything.
Businesses, can charge what people are willing to pay. People are being irrational, great!
It will end.
blueg33 said:
The agricultural land for auction has a very small chance of ever getting resi consent.
House builders identify what we call strategic land that has a chance in around 20 years. We take options with obligations to promote it through the planning system. 99.9 percent of the time we do not buy it until it has a consent.
I wonder how the proposed new planning rules House builders identify what we call strategic land that has a chance in around 20 years. We take options with obligations to promote it through the planning system. 99.9 percent of the time we do not buy it until it has a consent.
will change this dynamic?
I can see land values dropping if a lot more becomes available in ‘develop’ areas.
Though in ‘preserve’ areas I can see land values going up a lot.
Maybe a good time to hold off on selling unless you know what area you’ll be in.
Drumroll said:
CoolHands said:
How can aggregates and stone etc be up? Have quarries suddenly got a supply problem? Oh no, that big hole in the ground is still there. Rip-off century I’m telling you.
Whilst the "hole in the ground" may still be there most Quarries have limits put on how much material they can take out over a set period. Companies that take aggregates from the sea can only "mine" in certain areas and can only take certain amount of material.A lot of quarries have staff on furlough meaning output is lower. Or they are only doing certain materials. For example we cant get 6mm limestone at the moment, only 10 and 20.
Transport is also an issue. Drivers are hard to find - the demand for drivers in the retail sector and supermarket sector means that HGV drivers are short on the ground.
Repairs for vehicles. I know someone who put a tipper into a main dealer for a simple repair and it took 12 weeks!!! They apparently have a massive backlog. Our indy workshop is not taking on any more work now - stating they are getting too much overflow work from dealers. I am lucky I have a workshop on site, but the fitter who does the specialist work for me is really busy. I am having some engine work done today and we have waited 3-4 weeks for him to be able to do it. Normally this is stuff thats done overnight.... rather than take weeks.... drop truck off at 5pm and pick it up at 7am the next morning. Now its weeks and weeks.
I have also seen the quality of materials drop off quite a bit. A lot of the soft products we sell that need quite a bit of processing are shocking at the moment. But its a take it or leave it situation.
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