British homeowners seem to be collectively holding their breath as the property market slides into the doldrums. Sales are down 90% on last year, which means that several thousand families who would have ordinarily moved house in the past 12 months have decided to stay put. With the homebuilding industry suffering from lack of finance and, according to some reports, a third of construction workers losing their jobs, is now the time to solve space problems with an extension, exploiting the weak market to drive a bargain at the same time? The short answer is that residential builders are still in demand.
Debra Morall is a freelance PR who, like thousands of others, was considering
selling her Chiswick townhouse to buy something larger for her expanding family. ‘Even with more flexible property prices, the sums didn’t add up, and the cheaper option was to turn our first-floor balcony into a fourth bedroom.’ But the notion that builders were desperate for work was soon dismissed. ‘I got four quotes, and I had to chase all of them.
There was no opportunity to negotiate on fees.’ Jamie Benton-Jones, managing director of a London residential construction firm (07973 168452) says there is still plenty of work if some scaling back of projects. ‘One client a top banker has cut his £350,000 total-house refurbishment to a £50,000 paint job. But my cabinetmaker is busy until Christmas, and bricklayers are still impossible to get hold of.’ He stresses that discounts which ‘everyone’ is asking for are hard to calculate. ‘Labour costs are the same, and raw materials are going up in price.
I was recently undercut by about £40,000 by a Turkish builder, but I pay taxes for my men and we get the job done to standard and on time. Hugo Tugman of www.architectyourhome.com believes builders are still busy because much of the work was planned before the downturn. ‘But we expect the climate to start affecting workloads about now. Some builders will drop their prices to secure work, but others put them up because they’re worried about losing money. To take advantage of the decline in work, get at least four quotes.’ However, Mr Tugman cautions against negotiating too hard on the fee. ‘Most builders will reduce the effort they make in proportion to the price drop rather than accept a lower profit margin.’
Country-house refurbishments are still going ahead, says Philip Eddell of Savills’ country-house consultancy. He feels the economy has to get nastier before prices fall. His colleague Crispin Hol-borow agrees: ‘I’ve heard from a couple of builders that they’re lowering their margins to make sure their order book is fuller, but the time to commission work will be next autumn, not this.’ BCIS, the RICS’ Building Cost Information Service, suggests playing the wait-and-see game could be beneficial if only marginally. They predict building prices will come down between 2% and 4% in the next two years.
Executive director Joe Martin says: ‘It depends what’s going on in your area. If there’s a large project such as a hospital being built, you’ll find it more difficult to negotiate.’ So, for any project larger than a lick of paint, it seems sensible, lung capacity permitting, to hold that breath a bit longer until builders begin to really feel the pinch.