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Industry Leader Claims Building Cost Rises Have Peaked

There may be renewed cause for optimism in the construction sector this month as the UK’s second largest

house builder, Taylor Wimpey, claims that the difficult building cost rises, which saw costs burgeon by 5%

last year, may have finally hit their peak.

This week, Taylor Wimpey chief executive Pete Redfern announced impressive annual profits at the company and claimed that slower market growth could well lower the tough build cost pressures experienced by the sector at large through 2014. 2015, it would seem, could be a much better year for construction in the UK.

Increased production

This reduction in mounting build costs is in part thanks to the increased production of materials throughout 2014, which today is at last matching demand from the growing industry. Crucial products, including basics like bricks, are now more readily available than they were last year. This is having a knock-on effect on building costs, reducing prices across the sector.

Growing confidence

More confidence and greater certainty in future house building plans has given manufacturers the assurances they need to increase production, reducing overall build costs in early 2015 after a rise of £8k per unit between 2013 and 2014 – largely attributed to build cost inflation.

Happy buyers

Buyer confidence is another factor contributing to a sunnier outlook in construction for the start of 2015.

Despite looming elections, house buyers are feeling positive and enjoying a relatively affordable mortgage environment currently.

Each of these ingredients, from buyer confidence to productive manufacturers, is contributing to a good level of trade and what is believed by many to be the start of a period of sustainable growth and strong continued improvement in construction.

What do you make of Taylor Wimpey’s outlook for 2015? Do you share the company’s optimism? Have your say in the comments section below.