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This article highlights the economic forces that have influenced housebuilding for centuries. As a result, it prompted my brief summer musings about an alternative utopic world.

In utopia, the supply chain bottleneck and the apparent need for densification in urban areas will finally be the catalyst for well-designed modern dwellings that use innovative prefabrication on a large scale to deliver a sophisticated product more quickly and economically to enhance peoples鈥� lives.

Although prefabrication is often negatively associated with modernist mass housing in the 1960s, in parts of Europe prefab has become a desirable feature associated with functional and beautiful living spaces. In my utopian future technological innovations will assist in dampening construction cost inflation. What鈥檚 in yours?

Richard Jones is a senior partner at Jackson Coles

Housebuilders warn of supply chain bottleneck

Firms warn UK suppliers have been caught 鈥榦n the hop鈥� by resurgent housing market

Housebuilders have warned of the impact of the rising cost of supplies and labour as the resurgent housing market increases pressure on supply chains.

Steve Morgan, Redrow chief executive, warned that the cost of building a house may rise by as much as 3-4% because of the growing pressure on supply chains.

Speaking after his firm reported pre-tax profits for the year to 30 June up 63% last week, Morgan said increasing demand for materials and labour to build homes was likely to cause construction cost inflation.

The warning comes as construction recruitment companies said bricklayers鈥� pay surged 20% in the past six months, with salaries for bricklayers now topping 拢40,000 as firms compete for skilled workers.

Morgan said: 鈥淭he upturn seems to have caught the supply chain on the hop a bit. We think we鈥檙e not as badly affected as others because of the relationship we鈥檝e developed with our supply chain over many years. But there are issues with blocks and roof tiles. We鈥檙e hoping that is short term and that brick and block makers are stepping up production. At the moment we don鈥檛 know when the supply chain will get its act together.鈥�

Redrow is one of a number of housebuilders to have flagged cost pressures in their supply chains in recent financial statements.

The pressures have developed as housebuilders have scrambled to increase construction following improving sales rates in response to the government鈥檚 Help to Buy initiative, launched in April.

Galliford Try chief executive Greg Fitzgerald said there was 鈥渁 bit of panic鈥� in the industry around the supply of bricks and insulation blocks following the introduction of Help to Buy. Stephen Stone, chief executive of Crest Nicholson, said the firm had resorted to importing 75% of its concrete blocks from Europe after suppliers had been unable to meet demand.

鈥淭his is costing us about 拢300 in extra transport costs per house to get the blocks over, but is significantly cheaper than leaving half-built houses until the UK producers can up their supply,鈥� Stone said.

Stone added that lead-in times for bricks and roof tiles had gone from six to 12 weeks, and that he could forsee labour costs rising further. However, he said increases in build costs was more than being covered by increases in sales prices. 鈥淏uild inflation won鈥檛 be more than sales inflation,鈥� he said.