Finding a Builder in Edinburgh
Its getting harder to find builders in Edinburgh.
I haven’t written a blog post since March this year. I have been very busy and so has the Edinburgh construction industry! Two years ago I wrote about the challenges of finding a builder in Edinburgh. Since then construction costs have continued to rise for three reasons;
1. The economy is doing reasonably well, builders are in demand across most sectors.
2. After the Brexit referendum the pound fell about 15%, making imports that bit more expensive. The UK Construction industry imports materials like steel, glass, aluminium, copper, timber and insulation.
3. The Scottish Government raised Stamp Duty in 2015. This affects peoples decision to improve rather than move in areas with high property prices, such as Edinburgh. Why pay £50k in stamp duty, as well all the other fees, hassle, increased mortgage etc, when you can spend the money enlarging your current home. So many homeowners in Edinburgh have made this decision it has caused a significant backlog of work. Planners at Edinburgh Council tell me they now have about 50 applications per officer, the norm used to be about 30. Most builders I know are fully booked for at least six months. Some are booked for almost a year in advance.
Over the second half of 2018 it became increasingly difficult to carry out competitive tenders for domestic projects. Builders were so busy they declined to participate. Even when a main contractor was keen, their sub-contractors often wouldn’t submit prices. Tenders which normally took 2-3 weeks to complete now drag on for months and generate only one price. It was hugely frustrating for my clients.
I now advise clients that instead of tendering to multiple firms it is better to engage in direct negotiation with a single builder. I set up meetings between my clients and suitable contractors, they choose one firm based on references, availability and personal chemistry. From the point of view of my own services, this still takes place during the Pre-Construction stage. A builder will be far more likely to participate in pricing a job if they know they will get the work, subject to costs being agreed. For this to be possible we must tell the builder the budget beforehand.
Direct negotiations at an early stage, before lodging planning or building warrant applications, will get a builder involved early. This ensures there is someone ready and able to build the project once planning and warrant are granted.
Some clients have asked me if this will ensure they are getting the best possible price. If by this they mean the cheapest price, then it isn’t possible, or even likely. This is a downside to living in a successful, dynamic city like Edinburgh during a period of economic growth. In the same way that house buyers must out-bid one another, home owners are also outbidding each other to hire builders. And builders know it.
In my experience, the cost of house extensions or refurbishment projects in Edinburgh has gone up between 20% and 30% since 2015.