Concern at impact of increased cost of building materials on affordability of homes

Increased timber prices and supply chain issues, exacerbated by Covid-19 and Brexit, have increased the cost of building materials needed for the construction of new homes, a new survey shows today.

The survey, carried out by the Irish Home Builders Association, finds that an average 3 bed semi-detached house of around 95sq/m could see a product inflation range of between €12,000-15,000 by the end of this year.

The results reveal an approximate price increase of 4% in bricks since December 2019 and increase of about 1% in 2021.

The IHBA said that due to Brexit there has been large delays on bricks coming from the UK with congestion in customs and ports.

With the construction industry reopening after the latest lockdown, some suppliers are predicting lead times could increase by 4 to 15 weeks depending on the brick type.

Concrete prices have also increased by about 4% since December 2019 and 1% in 2021 so far, while prices for insulation have jumped by approximately 13% since December 2019 and 12% since the start of 2021.

Today's survey also shows that prices for plywood are up about 12% since December 2019 and 11-12% higher in 2021, while softwood is seeing increases of about 31% since December 2019.

The IHBA also said that timber frames prices are up about 15% since December 2019. Suppliers are quoting a further 4% increase in the third quarter of this year, coupled with an additional 5% for the fourth quarter.

This could add an additional €3,000 per housing unit, the IHBA cautioned.

Costs of shipping and transport are also seeing increases of 32% since December 2019, today's survey shows.

James Benson, Director of IHBA, said that due to delays caused by the impact of both the Covid-19 pandemic and Brexit the industry is seeing a significant increase in the costs associated with building materials coupled with a worrying shortage of available product.

"This cost increase is putting further pressure on the supply of new homes and could potentially lock even more people out of the market," Mr Benson said.

He said these increased costs will have to be taken on by either the buyer or the builder.

"Adding these costs to house prices could limit a borrower's ability to secure a mortgage. However, if these increased costs are not added to the purchase price on new homes profit margins would be halved and builders prevented from qualifying for finance to fund further houses or projects," James Benson said.