Construction industry reacts to Brexit

The weeks following Britain’s shock decision to leave the European Union have seen a lot of uncertainty over what the future holds. The immediate effects of the referendum result were felt all over the nation, with the construction industry one of the hardest hit; experts have highlighted concern around mortgage rates, house prices and the sustainability of the supply chain.

Michael Holmes, chair of NaCSBA explained how he thinks the decision will affect self and custom-builders:

“In the short-term some people will wait to see what happens to the economy. If we remain in the single market and retain freedom of movement, then I suspect things will stabilise fairly quickly, as long as we also retain passporting for financial services.”

Speaking on the day after referendum Richard Donnell, insight director at Hometrack said:

“The immediate impact of Brexit is likely to be a rapid deceleration in house price growth as buyers wait and see what the short term impact is on financial markets and the economy at large.”

However John Elliott, managing director of Millwood Designer Homes welcomed the vote saying:

“The EU’s Mortgage Credit Directive effectively means that no housebuilders are able to lend money to buyers unless they register as a regulated financial adviser. When times are difficult, this has been a traditional way for housebuilders to help buyers overcome mortgage downvaluations and other issues, and keep the market moving.

“Our exit from the EU will stop the continual flow of red tape and see our housing market grow and flourish without unnecessary constraints placed on building much needed new homes.”

Paula Higgins, CEO of the HomeOwners Alliance said:

“The current uncertainty is bad news for financial markets and will probably impact interest rates longer term, so mortgage holders will want to watch this space.

“House sales fell ahead of the referendum and we can expect people to continue to watch events unfold before making any big financial decisions. We can expect the rate of house price growth to slow nationwide, while in London the limited housing supply could reduce the impact on house prices.”

Arcadis UK chief executive officer, Alan Brookes said:

“Construction markets are likely to become more volatile in the short term, and we need to consider a joined-up approach to sustaining the capacity and capability of the industry. Although demand is likely to fall in some sectors this could actually take some of the pressure off over-stretched markets. Ultimately the UK needs to keep building.”

Discussing what it means for the green agenda, the UK Green Building Council’s CEO Julie Hirigoyen commented:

“Both economic and political uncertainty will have some people asking whether the green agenda needs to be de-prioritised while business goes into fire fighting mode. This must and need not happen.”

Iain McIlwee, the British Woodworking Federation’s chief executive expressed his concerns for the supply chain:

“For the UK, its people and its economy, we are entering a new chapter in history. What matters now is that firms in the construction supply chain are well informed and well prepared to assess risk.

“Some of the risks will be immediate, such as fluctuating currency. For example, the impact on material and component imports must be factored into joinery estimates and companies must ensure they are not caught out on projects that they have already quoted on, but materials have not been secured.”