The construction sector, which makes up 7% of the economy, is driving overall insolvencies to a 13-year high, according to data from the Insolvency Service.
Construction materials typically account for between 20-25% of the cost of most building projects and the price of core materials, including timber and steel, have rocketed over the past year.
They are also battling with shortages of key staff, including labourers, carpenters, joiners and bricklayers. Mark Wigley, managing director of Osprey Homes, a small-to-medium sized housebuilder in Hertfordshire, said:"It makes the viability of certain projects very difficult, in as much as we have to assemble our financial appraisals well in advance of bidding for new land and that generally takes a minimum of 12 months."So as a result, the developers are really carrying a lot of additional costs that we're finding it very difficult to absorb within our day to day business.
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