By now the refrain is probably fairly familiar, the UK needs more homes, preferably affordable ones. This means that homebuilding has to be a priority for any government, which could becoming a major problem for those in power if Brexit leads to a significant increase in costs for home builders.
The cost of a home is essentially dependent on three factors: the cost of the land (and associated permissions); the cost of materials and the cost of labour, which itself can be subdivided into two categories, namely the cost of human labour and the cost of equipment. All of these costs can be influenced by government actions, but it is highly debatable whether or not any government could fully control them.
There is little the government can do to influence the price at which landowners sell their land. Compulsory Purchase Orders (CPOs) can only be used in very specific circumstances and even then can be hugely controversial and subject to significant delays if the landowner chooses to put up a fight. The government can, however, influence the ease and therefore cost with which new developments can be approved and also the terms under which they are approved, e.g. what percentage of the development has to be classed as affordable housing. It is hard to see how this, in and of itself, would be impacted by Brexit.
It’s at this point that the question of building costs gets more interesting. The UK is the only country in the world to use GBP, which means that if homebuilders have to import materials, then somewhere along the line a currency exchange is going to be involved, which means the value of the pound sterling becomes a factor. If homebuilders buy in materials priced in the supplier’s currency, then they take the risk of currency fluctuations. If homebuilders aim to negotiate to have the supplier bill them in GBP then it is to be assumed that the supplier will factor the risk of currency fluctuations into the sales price. On top of this, there is the question of import duties. These do lie within the government’s control and the government could, feasibly, choose to allow home builders to import the supplies they need without taxes being paid, but then they could choose to use taxes on building supplies as a bargaining chip in other trade negotiations.
This is where the situation gets even more interesting. It’s probably common knowledge that the construction industry has benefitted greatly from the supply of labour from the EU, particularly eastern Europe. In a post Brexit world, the homebuilders will first of all want to know if these people can stay and, if so, if they will want to stay. Human nature being what it is, it’s probably a fair bet that the answer to the latter question will depend on whether or not the workers see it as being worth their while, which leads back, at least in part, to the issue of the value of the pound.
If there are issues securing human labour, then homebuilders may look to automated solutions, such as the “robot bricklayers” which are already on the market, but the economics of these will depend on various factors, again, including the value of the pound and, of course, the decision as to whether or not to impose import taxes.
It should also be noted that in addition to the economic issues, there may be practical issues, which determine whether or not automation is a feasible choice as each site has its own characteristics and small-scale builds may, literally, not be able to accommodate significant equipment.