Assetz Capital has said property developers must plan ahead due to an unprecedented construction material shortage.
The peer-to-peer property lending platform said that the shortages were mainly as a result of Brexit and Covid.
Assetz Capital warned that ongoing shortages will hit projects that use steel or timber frame as both are in short supply and could suffer from rising costs over the next few months
The platform, which was accredited for the recovery loan scheme this month, said because of increased demand, lengthening lead times and low stock levels, it has been seeing ongoing price rises, in particular with timber, steel, cement and paint and property developers must plan ahead.
Assetz Capital said many developers have had to use creative ways to get around the extra paperwork at customs, such as sourcing more local materials, although many housebuilders are reliant on imported materials.
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“Like any construction project, planning is key,” Rebecca Hall, relationship director at Assetz Capital, said in a blog post on the platform’s website.
“Plan in advance so you aren’t caught out by shortages or price rises. This point is particularly important over summer as more people purchase DIY and landscaping products, which may place an additional burden on supplies.
“Work more closely with your supply chain too; communicate your requirements early with suppliers, distributors, and builders’ merchants.
“The construction sector is always innovating, and the use of modern methods of construction and factory building programmes will go a long way toward improving quality and production efficiency, but manufacturers will still be at the mercy of market forces when it comes to the building materials shortage.
“To summarise, product availability is proving to be a significant and prolonged issue for Britain’s housebuilders and developers, and we as a lender need to be aware that the cost of building projects may change in the months ahead because of the pressure.
“We also need to make sure that we are always looking to improve our lending criteria and offerings in order to help housebuilders cope with this.”