Experts from ConstructionInsure.co.uk claim that high stamp duty rates and house prices have made home improvements popular as 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.
And 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 on to consumers, along with other cost hikes as builders scramble to plug skills gaps, meaning the price of building a home extension could increase significantly.
Mark 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.
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“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 that one-third of UK companies in the construction industry currently employed foreign workers.
The researchers found that there were 122,094 construction workers in Britain that were born in other EU states in 2015.
These workers represented 45% of the total 270,653 migrant workers in UK construction.