Encon Insulation comment: Q4 2016

Mike Beard, Merchant Development Director Encon Insulation is BMBI’s Expert for Insulation Products – Distribution.

The government has published Fixing Our Broken Housing Market, its long awaited housing white paper, in the drive to boost the UK’s housing supply. Representing a big policy shift and containing some ambitious measures, could this be the new blueprint to providing a smoother, more efficient framework to deliver more homes? Only time will tell, but many of the proposed measures, if properly executed, will be a positive step forward in growing the housing supply to meet demand.

Housing generates substantial business for the whole supply chain – merchants, distributors and suppliers, from new build through to RMI – and we desperately need more homes. The white paper proposes support to housebuilders (in particular smaller businesses), as well as a requirement for councils to produce up-to-date housing plans aligned transparently with the existing housing demand. Government aims to simplify practices and speed up all stages in the building process to create homes more quickly. The current timeframe between planning permission and build is far too long, with some permitted developments left undeveloped for a long time.

Government has given the green light to the £1.2 billion Starter Homes Land Fund to stimulate the entry point in the housing market. Thousands of additional new homes with financial support will help first time buyers into home ownership. Meanwhile, the first ever garden villages, with the potential to deliver more than 48,000 homes across England, have been given government backing. These developments should bring significant new business to merchants.

For the rest of construction, you only have to take a look around to see positive signs of infrastructure activity with many building sites and tower cranes all over the big cities – a pleasing sight.

Following the referendum and post-Brexit uncertainty, exchange rate movements have added to the cost of imported materials, fuelling widespread material price inflation and squeezing margins after years of little or low price movement.

We have to hope the sector takes this as a positive, as manufacturers have pushed price inflation through to maintain their own margins, allowing them to invest in new technologies and increased capacity.

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Launched in 2015, the award winning monthly Builders Merchant Building Index (BMBI) report is the only reliable measure of repair, maintenance & improvement (RMI) activity in the UK. Filling an important gap, it can be widely used in construction, and by economists, Government, national media, commentators and influencers outside the industry.