Working Out The Cost Of Time Lost For Housebuilders
Building work is rarely delivered on time according to most industry estimates.
Some experts have suggested that project costs frequently increase by as much as 20% in some cases because of time lost. Add on the fact that it has been a particularly difficult period for housebuilders in the last 18 months, with estate agents Saville’s recording that work stopped on 80% of sites at the height of the pandemic, then we know there is a significant problem.
While the situation regarding Covid is now largely back to normal, it is clear that pressure on builders is not going to disappear any time soon - and delays will continue to happen unless contractors are prepared to look at different ways of working.
In real terms this means partnering more closely with companies like Global to ensure days lost are kept to a minimum. Failure to do so can be expensive. Even for a small builder working on just one home, one lost day at the foundation stage could prove prohibitive in terms of increased costs. Multiply that over several homes and very tight margins can soon become major losses.
Jim Edwards, Commercial Director explains:” Every new home has to have a latent defect warranty if it is to obtain a mortgage which means that companies like ours have to be on site to inspect work at every major stage of the construction process, starting from the moment that concrete is poured into foundations. By working closely with us, we can have our surveyor onsite at precisely the right time which means no lost wages, no losses on materials and no new paperwork to arrange new deliveries which could cost as much £10,000 for one lost day even on a smaller project.”
Most construction professionals also agree, that it is the problems which occur in these early construction stages, where any changes have the most effect on builders – and this starts from the moment concrete is poured into foundations – which is why it is so important to work closely with suppliers.
The soaring cost of paperwork also has to be taken into account. A recent YouGov survey confirms the growing burden faced by housebuilders when they get it wrong. It states that UK Construction workers are now spending an average of 90 hours a year per employee on paperwork alone, comprising nearly 40 hours reading paperwork, 38 hours filling out forms and 14 hours searching for mislaid documents. On average this is costing up to £1,500 per employee. By working in partnership with a good warranty company, form filling can be kept to a minimum.
It is the small to medium builders, many of whom have been in decline in the last 20 years, who are likely to suffer most from lost days, a fact which is supported by the Home Builders Federation who published a detailed report in 2017 as part of their continued campaign to reverse this downturn. The report adds that in 1988 small builders were responsible for 4 in 10 new build homes compared with just 12% in 2017.
It is those same small builders whose margins are under the most pressure that would benefit the most by partnering more closely with a warranty company like Global, for as well as saving money, the experience would add another layer of quality control to the construction process with experienced surveyors involved in the inspection process at every key stage of the build.
With Governments in both the UK and Ireland calling on the construction industry to build even more new homes, these pressures will not be easing any time soon.
Instead of being another area of administration, we help to save builders thousands of pounds in lost time and improve quality control. Click here to discuss your next project.