New research by the Federation of Master Builders (FMB) has revealed 32% of SMEs have had their margins squeezed, while 22% have been forced to pass material price increases onto clients, making projects more expensive.
With more than one-in-ten builders making losses on their building projects due to material price increases, 85% of firms predict material price rises could drive consumers to hire rogue traders in an effort to save money.
SMEs have reported a range of material price increases since the depreciation of sterling following the EU referendum in June 2016, with materials such as bricks, timber and windows becoming more costly.
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Other materials that have increased in value include insulation, blocks, Plasterboard / Slate, boilers/radiators and porcelain products.
Brian Berry, Chief Executive of the FMB, said the price spikes means building projects will now cost "significantly more" than they did this time last year.
"Material price spikes aren't just a problem for builders – they're also a problem for the home owner, with almost one quarter of builders saying that they have had to pass on price increases to their clients," he said.
"What with stagnant wages and price inflation across the economy, consumers are feeling the pinch and it might be that they decide not to commission that loft conversion or extension after all.
"Or worse still, 85% of builders believe that home owners will be tempted to hire rogue traders who are quoting a lower price than a professional building firm such as those that belong to the FMB. If that's the case, material price rises could lead to a flurry of botched jobs and distressed consumers.
"We're calling on home owners to hold their nerve – they're better off commissioning a more modest project from a professional builder than a high spec project from a cowboy. Don't take the risk."
(LM/MH)
