Like talking to a brick wall: London developers suffering from a 24m brick shortage

Posted 24 August 2015 by Stephen Maunder

London is home to the fastest growing population in the UK, with numbers expected to reach 9 million by 2021. With this in mind, developer The Linton Group has expressed concern over a 24m brick shortfall that threatens the creation of the 66,000 new homes that the capital will require each year.

Currently, around 1.7bn bricks are created each year, with a typical home requiring 10,000. With UK housing figures stating the need for up to 200,000 new homes each year across the country, there is a clear danger that there will not be enough supplies to go around.

Gary Linton, managing director of The Linton Group, comments: “The current brick crisis in London is a bubbling undercurrent occurring at a time when a whole host of factors are coming together to create the perfect storm of crisis and complexity for developers across the capital. It can take some time to eventually get on site and now when we do we’re contending with the possibility of a brick famine.”

From planning to completion, it takes an average of three years to build new homes, and the group has found a range of issues slowing the process. Gary continues: “Adding to the supply of basic materials, there is a shortage of available land for the homes required in London, especially in prime areas. I find that on average from over 300 emails I receive on potential development land, only one or two turn into successful site acquisitions. Anything from too much competition for the land, planning issues or just general viability concerns takes away a lot of opportunities.”

Brick imports are on the rise

The Royal Institute of Chartered Surveyors (RICS) reports that brick imports increased by 63% in 2014, though ordering from outside the UK has its risks, with developers needing to source and order enough for an entire development so as to ensure consistency of brick size and colour.

Due to their scarcity, brick prices are on the rise, with a number of manufacturers recently doubling operating profits based on a 10% increase in turnover, which saw sales increase by 70m between 2013-2014.

This has resulted in smaller developers turning down opportunities as rising material costs and growing labour costs make profit margins too thin to take the risk, thus decreasing the number of new homes being built in the capital.

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