Homeowners have been warned that the cost of extending their houses could rocket due to Brexit as a lack of skilled foreign workers causes insurers to increase the price of premiums.
Experts from ConstructionInsure.co.uk claim high stamp duty rates and house prices have made home improvements more popular than ever as record numbers of Britons choose to extend their current homes rather than move to a new house.
But with more than 120,000 EU migrants working in the UK construction sector, many in skilled positions, experts have warned that the building industry is bracing itself for a possible shockwave if European workers choose to leave the country post Brexit.
Now an insurance expert has added to the industry’s woes by warning that building firms could be forced to pay significantly higher premiums after Brexit takes place.
Mark Herbert of ConstructionInsure.co.uk says the loss of thousands of skilled workers from the industry will increase risks for construction firms, leading to an inevitable increase in insurance costs.
These costs are likely to be passed onto consumers along with other cost hikes as builders scramble to plug skills gaps, meaning the price of building a home extension could increase significantly.
Herbert said: “The UK construction industry relies heavily on EU migrants, particularly in London and the South East region.
“There are more than a quarter of a million migrants employed in UK construction and just under half of these, around 120,000, are from EU countries.
“Many of these EU workers are employed in highly skilled roles and many in the industry are bracing themselves for the possibility of a huge skills gap if these professionals decide, or are compelled, to quit Britain following Brexit.
“What many in the industry fail to realise though is that such an event would also have huge ramifications for their insurance costs as providers’ factor in the increased risks such a skills gap would present.
“This is likely to lead to a significant increase in the premiums construction companies must pay to protect their work. It’s a cost which many may have failed to factor into their Brexit planning yet it could increase the burden considerably.
“These increased costs will ultimately have to be met by consumers although some firms may find it difficult to cover the costs of both increased insurance policies and recruit and train new workers at the same time.
“In some cases it could even lead to construction sector firms going out of business if they struggle to meet the increased costs.”
Research by the Construction Industry Training Board, IFF Research and the Institute of Employment Research at Warwick University found one third of companies in the construction industry currently employ foreign workers.
The researchers said there were 122,094 construction workers working in Britain but born in other EU states, in 2015. These represented 45% of UK construction’s total 270,653 migrant workers.