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Could a brick shortage keep prices high?

The article below is from Property Industry Eye
Written by Rosalind Renshaw, 25th August 2016:

NAEA chief warns that brick shortages could lead to 'lifetime of astronomical house prices'

A shortage of bricks has helped push up house prices, the National Association of Estate Agents claimed this morning, and could lead to a "lifetime" of high house prices and falling levels of home ownership.

The organisation said that the UK needs 1.4bn bricks in order to resolve the housing shortage.

That is the equivalent of the total amount which would be needed to build all the houses currently in Leicestershire.

However, the NAEA claims that Brexit could worsen the issue, because 85% of clay and cement comes to Britain from the EU.

The claims are made in a Bricks Report compiled by the NAEA with the Centre for Economics and Business Research.

The report says that two-thirds of small and medium-sized construction businesses faced a two-month wait for new brick orders last year, with almost a quarter waiting for up to four months and one in six waiting six to eight months.

Mark Hayward, NAEA managing director, said: "We're concerned that the impact of the EU referendum means this problem could get worse as we rely on the import of brick components from the EU and of course many of our skilled labourers come from there too."

He added: "Until this is addressed, we might as well resign ourselves to a lifetime of astronomical prices and falling levels of home ownership."

Meanwhile, separate analysis by Capital Economics commissioned by Shelter warned that the Government will be 266,000 homes short of its 1m homes target by 2020.

The projections warn of an 8% fall in house building over the next year, as post-referendum uncertainty puts the breaks on the big house builders. As a result, if the current trajectory continues, by 2020 we still won't be building as many homes as before the 2008 crash.

Published on 26 August 2016