Brexit and The Construction Industry - What Can We Expect?

Posted 14 May 2019 by Helen Christie

WhatHouse? explores how the UK's departure from the EU will affect the construction industry...

You might be tired of seeing and hearing the word ‘Brexit’, but the truth is, the future of Britain is looking very uncertain right now - and that’s something that needs to be discussed.

Keith Harrison is a content creator and writer for Jolly Good Loans - an online personal loans encyclopaedia, and explores how the UK's departure from the EU will affect the construction industry in particular - from skills and material shortages to the impact of an uncertain economy.

 

Money

During its time as a member of the EU, the UK has benefited greatly from funding - and while there’s concern about the impact the loss of this funding will have, there could be some balance to be restored if and when our EU contributions come to an end.

With the volatility of the pound unlikely to settle down any time soon, the weakening of the UK’s currency could make the country an attractive option for potential investors - although the current uncertainty is likely to throw a shadow over this, at least for the time being. This lack of clarity alone is enough to fuel concern within the construction industry, as everything from labour and materials to funding is thrown into potential disarray.

 

Skills

Without skilled and unskilled labour from EU nationals born outside of the UK, demand is very likely to outstrip supply, and this could spell disaster for the construction sector. A shortage in skills will undoubtedly lead to higher project costs, which in turn is highly likely to lead to a demanded wage increase.

With initial post-Brexit plans pointing towards a complex visa system, being able to hire foreign nationals will become increasingly more difficult, time-consuming and costly - which spells bad news for the construction industry.

With the Office for National Statistics admitting in June 2018 that the “construction sector is very flexible but fragmented”, data gathering in this area is anything but conclusive - but with 28% of construction workers in London alone coming from EU countries the predicted skills shortage is highly likely to become a reality. It’s not just the workers who will suffer...

 

Materials

Following an eventual withdrawal from the EU, the UK will also wave goodbye to its free movement of goods - and with the UK importing more than it exports, and the majority of construction materials coming from EU countries, disaster could be on the horizon.

With Theresa May failing to get backing for a deal, and a no-deal Brexit also looking unlikely, time is running out for the UK to protect its trading future and any potential deals with EU countries. A fair withdrawal deal is needed, but we’re currently no closer to a solution.

So, what will this mean for the existing housing crisis…

 

Housing

In these unsettling times, in the background remains the government’s promise of delivering 300,000 more houses by the mid 2020s - but with so much uncertainty around how the eventual outcome of Brexit will impact the construction industry, how realistic is this?

The likelihood that overseas investors will pull the plug on their UK property ventures combined with the shortage of skills and materials means we can expect to see a situation in which builders and construction workers are unable to meet the demand for new housing - whether they insist on higher wages or not.

In turn, this could spell trouble for renters and prospective homeowners, as the financial market also takes a hit. So, whether Brits are looking for a guarantor loan for renting or want to know more about buying with bad credit, in increasingly uneasy times, the future of borrowing currently remains unclear.

 

 

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