Housebuilders are under significant pressure, with 78% grappling with rising building costs, a study by construction platform PlanRadar has found.
Labour shortages are contributing to rising costs, with two thirds (65%) facing wage increases and three quarters (75%) citing project delays, squeezing the profitability of projects.
The report, taken from PlanRadar’s eBook, Global Housebuilders’ Survey 2024, surveyed 669 companies from across 17 countries, including the UK, to provide a snapshot of global housebuilding sentiment.
Rob Norton, UK director of PlanRadar said: “Rising prices and labour costs are squeezing housebuilders worldwide, and the UK is feeling the pressure.
“With tighter regulations and shrinking profit margins, the message is clear: adapt or fall behind.
“These findings are a glaring litmus test for how the UK market is faring, and while challenging, there is hope. It’s time for the industry to innovate and thrive”
When it comes to providing solutions, 68% of UK housebuilders support a revision to immigration policies as a way to attract skilled labour from abroad, one of the highest levels of support globally.
Similarly, 57% also advocate for reducing regulatory barriers to increase the housing supply.
UK housebuilders have also embraced technology, partly due to the Building Safety Act’s push for digitisation. 79% believe technology can boost efficiency and profitability.
Sander van der Rijdt, PlanRadar’s co-founder and chief executive, added: “Rising costs and labour shortages are shaking the very foundation of the housebuilding industry, just as global demand for homes has reached critical levels.
“Our research highlights these challenges but also reveals a sense of optimism. With most housebuilders believing that technology can boost efficiency and profitability, there’s a clear path forward—if the industry can bridge the tech adoption gap.
“Amid a period of high interest rates and reduced demand, companies now have a unique opportunity to pause and focus on optimising their internal processes. This preparation is crucial as interest rates begin to decline, spurred by recent cuts from the ECB and FED, which are already signalling an uptick in demand.”