Is Brexit Making It More Expensive to Undertake Home Improvements?

The subject of Brexit has been done to death in the media – continual discussion and op-ed pieces of whether the UK should stay or go. But in the end, will it really matter that much? After all, it very likely that life will continue much as it has in the past once the hard deadline of 29 March 2019 comes around.

But what statistics are showing is that Brexit is having an impact on the construction industry and the knock-on effect has meant that the cost of home improvements is steadily increasing.

Brexit’s Direct Impact

However, how do we know that it’s Brexit that is causing these costs to soar? Examining the subject in a bit more detail, the answer is a hard ‘perhaps’. Brexit has put pressure on the labour market of that there can be no doubt and with more people exiting the UK for one reason or another, that means that there are less skilled tradespeople around to perform home improvements and economics 101 teaches us that scarcity cause prices to increase.

The statistics tell the story in more detail. Recent research by Britain’s ‘Office for National Statistics’ has revealed that there is a discrepancy between EU citizens entering the UK and those that are exiting – and the shortfall is around 87,000 people. It’s almost inevitable that some of those who left were skilled tradespeople and they are not being replaced by an influx of new talent.

Add to this the fact that the influx of migrants from the so-called A8 countries, that is those countries who joined the EU in 2004 went from positive to negative for the first time. 45,000 people arrived and 47,000 left for the EU mainland.

These are the very people who arrived in Britain in search of a new life in the construction and building industries. And with their departure, a pool of talent simply evaporated.

These were immigrants who were working in diverse industries such as manufacturing of windows and doors. With the shortfall recruitment costs have gone up – there’s that scarcity issue again.

And there is more bad news for those who are in the market for home improvements. The Office of National Statistics reported that in October 2018 wages spiked to a level 3.1% above that reported for the three months leading up to August 2017. This means that wages have increased at a level that has not been seen since the 2008 global credit crunch.

Can we place the blame on the confusion and infighting that has surrounded Brexit? It would be hard to place the blame on a specific set of circumstances, but what is beyond doubt is that labour costs are skyrocketing. An increase in labour costs is inevitably passed on the consumer. The falling pound value has also not helped as far as production costs are concerned.

Long Term Effects

So what are the long term effects on home improvement companies, like Lewis Visuals, due to the current political and economic climate and Brexit? The ‘The Construction Industry Training Board’ released a Green Paper saying that in their opinion Brexit was having a slow but steady negative influence on the entirety of the construction sector.

The Green Paper reflected increased concerns by the management of building companies when it came to finding and retaining the service of qualified workers. Worrying the Paper also revealed that up to 37% of those skilled workers are born outside of the U.K. is not a trivial statistic. Material costs have also increased by between three and four percent in 2017. These costs once again will be passed onto homeowners. The buck will literally stop with them.

So what does this mean for the average homeowner? It means that now is the time to be proactive and invest in products like energy efficient finishes such as doors and windows. If a homeowner is considering these purchases it might be a good idea to take action now rather than later when costs spiral out of control. The future is murky at this point. The impact of Brexit might fade as the UK economy finds a sweet spot post Brexit – or there’s always the chance that Brexit won’t happen at all.

Energy Efficiency Post-Brexit

The fact of the matter is this. Energy effective doors and windows are currently affordable and represent an excellent investment given the fact that energy costs are on the rise. In fact, British Gas announced its latest price hike of 4% at the end of August 2018. This is going to add 44 pounds to already steep annual gas prices. Heating your home is becoming more and more expensive.

An energy efficient home is not becoming a luxury, it is becoming an absolute necessity; doors and windows that have been designed to help with heating costs are a great investment right now.