Lack of materials is a stumbling block for London construction
New data acquired by London property developer The Linton Group has demonstrated that to keep up with rapid rises in population, an estimated 66,000 new homes will need to be built in London per year. However, a lack of available building supplies, particularly bricks, could pose a significant problem. As a result of this short supply, brick prices are increasing, something which is likely to deter smaller property developers. Additionally, a lack of trained bricklayers has led to a rise in labour costs.
London currently has the fastest growing population in the UK, with over 8.6 million people residing in the capital and it is estimated that this figure is set to rise to 9 million by 2021.

The Linton Group estimates that to accommodate over 400,000 new residents, 66,000 new homes will be required per year in London. However, The Linton Group also points out that a 24 million brick shortfall is fast becoming the biggest stumbling block for developers across the capital.

On average a typical home comprises 10,000 bricks, meaning that 660 million bricks are required to meet the estimated yearly requirement across London. The 50 active Kilns across the UK can only produce around 1.7 billion bricks per year and with new UK housing figures stating a requirement for 200,000 homes per year across the nation, there is a clear sign that there will not be enough bricks to go around.

Commenting on a growing brick shortage, Gary Linton, Managing Director of specialist London developer The Linton Group, commented:

“Official figures recently released state that there is a need for 49,000 new homes in London per year, however to meet population growth estimates, we actually put that figure at 66,000, which would require an extra 24 million bricks, at current we’re just not producing enough bricks to meet this demand. “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.”

The process to build new homes from the planning stages to completion take on average three years and The Linton Group has found that there is a wealth of issues now facing developers before new homes can convert from sketches to buildings.

Gary stated:

“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.”

The Royal Institute of Chartered Surveyors (RICS) reports that brick imports were 63 percent higher in 2014 than in the previous year, though ordering from outside the UK has its risks. Developers need to source and order enough for an entire development so as to ensure consistency of brick size and colour, which can be difficult to ensure at the beginning of the planning stage.

Gary continued:

“When final plans are submitted to the council a lot of the time you are trusting that the design of brick or exterior cladding you have based your design around will be available. There have been some instances I’ve heard of where developers have found that the materials they need won’t be ready in time for when they’re on-site, which can hold up the build process sometimes months at a time. “We’ve actually started storing brick samples in our offices and trying hard to ensure that our chosen materials will be in stock and ready to go if our plans are approved and we can start work on-site as soon as possible.”

Now in short supply, brick prices are on the rises, with a number of brick manufacturers recently doubling operating profits based on a 10 percent increase in turnover, which saw brick sales increase by 70 million between 2013-2014. Whilst larger house-builders may be able to absorb rising brick costs and minimise price increases through economies of scale, smaller developers are beginning to turn down opportunities as rising material costs, as well as growing labour costs, make the margins too thin to take the risk. All of which is decreasing the number of homes produced across London each year.

Adding to brick shortage concerns, developers are also facing rising labour costs, with a lack of skilled British bricklayers available. The popularity of the building profession for new and young workers declined during the recession and has been compounded by an ageing building industry workforce close to retirement. A number of developers have turned to hiring Portuguese bricklayers, on £1,000-a- week wages, to plug the gaps in their on-site workforces.

To help replenish an ageing workforce apprenticeship schemes with construction companies are now becoming more widely available. Business Secretary Vince Cable claims that the Government is now working closely with the construction sector to encourage industry-designed apprenticeships and employer-led training, to revive the British building workforce.

In summary, Gary stated:

“London was once the UK’s largest provider of bricks, the traditional soft grey-yellow and pale-coloured London Stock Brick made from the clay laid down by the ancient River Thames can be seen all across the country. However, these days, the capital largely looks elsewhere for its brick supplies. It can only be hoped that London’s brick industry can revive fast enough to satisfy the never-ending demand for these simple, rectangular objects that are so common, so important and now so very much valued.”

Ref: 13546