Perhaps one of the biggest divisive topics to hit Britain in a long time, the recent EU referendum literally split the country in two, with the final result being 52% in favour of exiting the European Union.
The decision both horrified and excited the population, and left a huge question mark over the country’s economic standing. Since the referendum, the economy has experienced some highs and lows, but is slowly beginning to settle now.
With this in mind, we’re looking at the possible effects Brexit could have on the construction industry, both good and bad, before addressing whether Brexit could actually be brilliant for building works.
Problems the construction industry face
Prior to the referendum, a staggering 85% of polled construction workers were in favour of remaining in the EU, with concerns being that without the open relationship with other European countries and the benefits that come with a place within the EU, the construction industry would suffer. Just some of the concerns expressed include:
Skills shortage – Foreign migrant labour makes up a large portion of skilled and unskilled labour roles, so without the free movement for other European nationalities into England, migrants could choose to move to another country within the EU rather than tackle the stringent immigration process that would now make it more difficult for them to reside in our country. This could lead to a nationwide skills shortage which could drive the price of labour much higher. To tackle this, business owners would have to either take a loss on their profits or raise their prices, which could discourage custom.
Construction materials shortage – Currently, an estimated 64% of the building materials used for construction in the UK are imported from the EU, mostly due to the ease of trading we have with European countries. After Brexit, there may be new limits on how much we can import, which could lead to a shortage in construction materials up and down the country.
Increased cost for materials – The shortage of construction materials would undoubtedly make them a more valuable commodity and drive the price up. Combine this with the possibility of having to pay duties or tariffs to import and we could see a huge increase in the cost of basic materials that could make constructions more expensive.
Fearmongering – Finally, fearmongering from the Remain campaign that has depicted a huge crash for the UK market has put off many consumers from making any huge purchases, such as committing to any building work, that would have otherwise gone ahead, leading to a temporary lull in the industry.
The benefit of the free market?
The benefit of the free market may outweigh the potential losses of losing our relationship with the EU, which is what the vast majority of the Great British public believed when they voted leave in the referendum.
By breaking away from the restrictions placed upon us by trading exclusively with the EU, a much larger market is available to us, and we may find that by using cheaper building materials from Asia or elsewhere in the world, that not only is building material in abundant supply, but that we can negotiate a much better deal than the one we had with Europe. In turn, this will reduce building costs for those in the industry, who can then pass along some of this saving to the customer, making a much more beneficial market for all involved.
The housing market
It was feared that leaving the EU would send interest rates flying and make purchasing a house much more expensive. However, so far the opposite has been true. The Bank of England cut interest rates for the first time in seven years, now at a record low of just 0.25%. While this doesn’t benefit current homeowners who are on a fixed-rate mortgage, it will certainly benefit anyone currently looking to purchase a home, and could even lead to a surge in housing sales while consumers are keen to get a bargain rate.
This saving could be beneficial to the construction industry as an increase in new homeowners often means some refurbishments to make the new property into a home, and with extra money pocketed from declining house prices, more new buyers will have the free cash to renovate their properties.
On the other side of the coin, current homeowners are less likely to sell their homes as they see their home values take a hit, meaning that if a property no longer fits the owner’s requirements, it is ultimately more likely that they will opt for an extension, refurbishment or other construction work to make their property more suitable for their needs and add value to their home rather than risk selling in an uncertain market.
So, is Brexit brilliant for building works?
Despite predictions of another recession and a failing market, Britain’s economic standing still remains, and the changes to the housing market combined with the potential benefits of the free market could certainly give the construction industry a boost, with a combination of more money for new homeowners and lower production costs for builders resulting in a bigger market, reduced costs and more profits.
The increase in building works of all varieties also has a knock-on effect for related industries, such as plumbers and drainage experts.
How we can help you in the post-Brexit economy
Here at Express Drainage Solutions, we could also benefit from reduced material costs in the free market, and an increase in new builds, renovations and home upkeep makes a more saturated market for us to offer our services at affordable prices to our customers.
If you are currently looking to make the most of the benefits that could come with a post-Brexit economy and are building a new home or extending your property, we’re able to connect you to the main sewers with the installation a new drain connection at an affordable rate. We also take care of all aspects of the planning, designing and licensing to make the process simple and straightforward for you.
Express Drainage Solutions offer quick and reliable drainage services throughout London and the South East, with no problem being too big or too small for our dedicated team of drainage engineers. Whatever your requirements, we can help. Simply get in contact today to find out more.