A leading business consultancy is warning that supply chain shortages as a result of Brexit and the pandemic will push up house prices.
Jan Crosby - UK head of infrastructure, building and construction at KPMG - made the comments in response to the latest Halifax house price index, which showed the biggest monthly increase since February 2007.
“The demand for housing continues to outstrip supply, which is underpinning house prices leading to another sharp rise this month. This is due to a combination of houses selling very quickly and the global supply chain issues with building supplies, which have existed for some time, now being exacerbated by lorry driver shortages” says Crosby.
“Developers can’t build quickly enough to sell into the strong market - particularly for family housing with outdoor space. There are some tentative signs that sourcing building materials is becoming more straightforward, but lead times can still be very long.
“Labour availability and wage inflation is now also on the sector’s radar. Not only is more housing needed to meet demand, but the focus should be on delivering sustainable, affordable housing.”
The Halifax says that over the past year, prices for flats are up 6.1 per cent, compared to 8.9 per cent for semi-detached houses and 8.8 per cent for detached. This translates into cash increases for detached properties of nearly £41,000 compared to just £6,640 for flats.