Material and labour shortages slowing London housebuilding – mayor

Sadiq Khan, the mayor of London,  has warned that rising material prices and labour shortages are hampering housebuilding in the capital, citing the “double impact” of the pandemic and Brexit.

According to government data, the cost of construction materials including steel, timber and concrete for all types of work increased 23% in the UK in 2021. The Greater London Authority said this rise was roughly equal to the increase seen during the previous 12 years in total.

The mayor, repeating a previous call for the government to provide additional grant funding for affordable housing in London, pointed to schemes including from his own housing programmes that were being “severely impacted” by escalating material prices.

These include a scheme in south east London which has seen costs increasing 45% based on tender prices and a south London borough reporting cost inflation “spiking” up to 17%.

Earlier this month, the mayor called for the government to introduce a Coronavirus Recovery Visa to deal with labour shortages, including in construction. He said the visa should allow workers at least 12 months to work in the UK. And it should accommodate those working on a self-employed basis, which is often the case with construction.

His call came as he cited UK statistics revealing a construction vacancy rate at its highest recorded level since 2001. And in summer 2021, construction vacancies were 40% higher than in the three months before the pandemic.

The Greater London Authority referenced data from the Office for National Statistics, showing that in December, almost a quarter of construction firms in the UK reported a shortage of workers, against the all-industry average of 14.6%. It said these shortages were partly in response to Brexit-related added costs. And 13.7% of construction firms said transport was costing them more.

The mayor said: “Since becoming mayor, I have made tackling London’s housing crisis one of my top priorities. From City Hall, we have worked tirelessly to get London building again, but the twin effects of the pandemic and Brexit has hit both housebuilders and consumers hard.

“Put simply, materials and labour are needed to build homes. Without bricks and mortar, and enough skilled workers, the excellent progress we have made in delivering the good quality and genuinely affordable homes that Londoners need is at risk of stalling.”