Global Housebuilders’ Survey 2024: UK One of the Worst Hit by Labour Shortages and Rising Costs

PlanRadar’s study finds widespread labour shortages and rising material costs are hitting developers hard

A new study by PlanRadar, a leading platform for digital documentation, communication and reporting in construction, facility management and real estate projects, reveals that housebuilders are under significant pressure, with 78% grappling with rising building costs.

The report demonstrates that labour shortages are the top challenge for respondents and significantly contribute to rising costs with 65% facing wage increases and over 75% citing project delays due to labour shortages, squeezing the profitability of projects. According to 65% of respondents, investing in technology would enhance profitability through increased efficiency. However, despite recognising this potential, the adoption of such technological solutions remains slow.

The report, taken from PlanRadar’s recent eBook, Global Housebuilders’ Survey 2024, surveyed 669 companies from across 17 countries, including the UK, to provide a snapshot of global housebuilding sentiment.

To navigate the complex housebuilding landscape and meet growing demand, survey respondents identified three primary challenges, with 48% citing a labour shortage, followed by uncertainty around government policy and financial constraints.

The shortage of skilled workers is also having a knock-on effect on construction timelines. 76% of housebuilders said it had caused project delays, affecting the profitability of developments during tough economic trading.

However, despite the challenges, including a widespread decline in residential construction output, demand remains high. 75% said that requests for services over the past year either increased or remained unchanged – a sentiment mirrored by 47% of UK respondents.

Additionally, 75% of UK housebuilders reported plans to explore new growth opportunities, spurred perhaps by Labour’s new housing targets and efforts to simplify planning.

Just 12% of all respondents are temporarily scaling back their activities, highlighting the sector’s resilience and ‘can do’ attitude.

Interestingly, 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.

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”

Sander van der Rijdt, PlanRadar’s Co-Founder and CEO, adds: “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. Digital platforms like PlanRadar offer solutions that are adaptable to business needs and are easy for everyone involved in the project to use.”

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