Building costs have gone up so much, wondering if an extension will still add value

Section62

rob7475 said:

aoleks said:

I was talking about material prices... people are used to paying high prices, no one will lower them to what they used to be 2 years ago. current prices are the new baseline.

as for competitive market, the severe shortage of labour in this country won't be solved anytime soon. you can barely find a builder as it is.

Exactly this. There was uproar when fuel went over £1.70 a litre a couple of months back. Now we've just learned to accept it and the prices are increasing again.

But you can't 'guarantee' that fuel prices won't go back down.

Houses, the materials houses are built from, and fuel, are all things which fluctuate in price depending on supply, demand, and macro economics.

aoleks

Section62 said:

rob7475 said:

aoleks said:

I was talking about material prices... people are used to paying high prices, no one will lower them to what they used to be 2 years ago. current prices are the new baseline.

as for competitive market, the severe shortage of labour in this country won't be solved anytime soon. you can barely find a builder as it is.

Exactly this. There was uproar when fuel went over £1.70 a litre a couple of months back. Now we've just learned to accept it and the prices are increasing again.

But you can't 'guarantee' that fuel prices won't go back down.

Houses, the materials houses are built from, and fuel, are all things which fluctuate in price depending on supply, demand, and macro economics.

slight fluctuations are one thing, a return to prices like 2 years ago is something else. have you ever wondered why you can't buy much at prices from the 90s, for example? at some point, the "higher" price becomes the new normal.

Section62

aoleks said:

Section62 said:

rob7475 said:

aoleks said:

I was talking about material prices... people are used to paying high prices, no one will lower them to what they used to be 2 years ago. current prices are the new baseline.

as for competitive market, the severe shortage of labour in this country won't be solved anytime soon. you can barely find a builder as it is.

Exactly this. There was uproar when fuel went over £1.70 a litre a couple of months back. Now we've just learned to accept it and the prices are increasing again.

But you can't 'guarantee' that fuel prices won't go back down.

Houses, the materials houses are built from, and fuel, are all things which fluctuate in price depending on supply, demand, and macro economics.

slight fluctuations are one thing, a return to prices like 2 years ago is something else. have you ever wondered why you can't buy much at prices from the 90s, for example? at some point, the "higher" price becomes the new normal.

The 90's was getting on for 30 years ago, rather different to 2 years ago.  That said, how much did a 32" TV cost in 1990, how much does one cost now?

A friend of mine is a timber importer.  After the initial price spike where suppliers were cancelling orders and reselling the stock to a higher bidder, the prices began to fall again.  And fall to the extent he took a serious haircut when a ship had engine trouble and was delayed getting to the UK from the Baltic state the timber was being supplied from.  The price sticker on a single length of 4x2 in Homebase or B&Q won't show those reductions (yet) because they have stock to clear through the system, and people buying timber in DIY sheds are generally less price aware/sensitive than the people buying timber to build houses.

Nobody can 'guarantee' that prices of traded goods and property won't go down.

aoleks

Section62 said:

aoleks said:

Section62 said:

rob7475 said:

aoleks said:

I was talking about material prices... people are used to paying high prices, no one will lower them to what they used to be 2 years ago. current prices are the new baseline.

as for competitive market, the severe shortage of labour in this country won't be solved anytime soon. you can barely find a builder as it is.

Exactly this. There was uproar when fuel went over £1.70 a litre a couple of months back. Now we've just learned to accept it and the prices are increasing again.

But you can't 'guarantee' that fuel prices won't go back down.

Houses, the materials houses are built from, and fuel, are all things which fluctuate in price depending on supply, demand, and macro economics.

slight fluctuations are one thing, a return to prices like 2 years ago is something else. have you ever wondered why you can't buy much at prices from the 90s, for example? at some point, the "higher" price becomes the new normal.

The 90's was getting on for 30 years ago, rather different to 2 years ago.  That said, how much did a 32" TV cost in 1990, how much does one cost now?

A friend of mine is a timber importer.  After the initial price spike where suppliers were cancelling orders and reselling the stock to a higher bidder, the prices began to fall again.  And fall to the extent he took a serious haircut when a ship had engine trouble and was delayed getting to the UK from the Baltic state the timber was being supplied from.  The price sticker on a single length of 4x2 in Homebase or B&Q won't show those reductions (yet) because they have stock to clear through the system, and people buying timber in DIY sheds are generally less price aware/sensitive than the people buying timber to build houses.

Nobody can 'guarantee' that prices of traded goods and property won't go down.

unlike tech, where modern technology makes electronics more and more affordable to the point where the cost is no longer an issue, building materials such as wood, bricks and other stuff is virtually unchanged since... forever.

those prices coming down as a result of a better deal are part of the normal fluctuation. as I said, if you smooth those out, wood today is more expensive than wood yesterday and the price is only ever going in one direction: up.

even if there was something to bring it down, inflation mean you would pay more anyway.

but we're diverting from the question of whether to build an extension or not and the answer is yes, if you need one.

Section62

aoleks said:

unlike tech, where modern technology makes electronics more and more affordable to the point where the cost is no longer an issue, building materials such as wood, bricks and other stuff is virtually unchanged since... forever.

I guess it depends on your meaning of "forever", but if it is anything like the conventional sense of the word then you are quite wrong.  A layperson may think those building materials haven't changed, but they have.  Bricks for example have become more consistent and durable through better quality control, the range of blocks has vastly increased, the quality of a lot of timber has decreased due to modern species and growing methods but it is easier to procure better quality timber if you need it.  Windows and external doors are nothing like they were in the 1980's.  Plumbers and drainage engineers now have the use of plastics where lead (followed by copper) and clay were the go to options... there's a long list of building material changes occuring in the same timeframe as electronics development  we could go through if you are interested.

aoleks said:

those prices coming down as a result of a better deal are part of the normal fluctuation. as I said, if you smooth those out, wood today is more expensive than wood yesterday and the price is only ever going in one direction: up.

No, the prices going up were as a result of very unusual circumstances. The market will correct itself as the circumstances revert back to something approaching normality, or alternatives are developed.  I guess this is a strange concept if you've only experienced prices going up, but they do also go down.

aoleks said:

even if there was something to bring it down, inflation mean you would pay more anyway.

Sorry, I don't follow your logic.  How does inflation mean you would pay more for goods if the price of those goods is reducing?

aoleks said:

but we're diverting from the question of whether to build an extension or not and the answer is yes, if you need one.

Or "possibly" if you are seeing the building project as an investment and the need is not immediate.

Money_Grabber13579

rob7475 said:

aoleks said:

I was talking about material prices... people are used to paying high prices, no one will lower them to what they used to be 2 years ago. current prices are the new baseline.

as for competitive market, the severe shortage of labour in this country won't be solved anytime soon. you can barely find a builder as it is.

Exactly this. There was uproar when fuel went over £1.70 a litre a couple of months back. Now we've just learned to accept it and the prices are increasing again.

Except at the start of covid, demand for fuel dropped significantly and so did prices. The same could happen with building material prices - the increased price will have cut demand to some extent and if the supply problems ever get sorted out, then there will be an oversupply and prices will fall. It depends on many variables but it’s impossible to say that prices will never go down.

casper_gutman

Fuel prices are something most of us are more familiar with than those of building materials, but anyone who's run a car for more than a couple of years will know that they can and do fall as well as rise. During my quarter century or so of motoring there have certainly been at least three occasions when I've thought "Well Casper, you won't see fuel for less than £1 a litre again!" - only to be proved wrong.

Now, I don't think we'll be going back to paying ninety-something pence for unleaded, but falls of 20-30% at the pumps are perfectly possible and have happened repeatedly. This is all the more remarkable given the bulk of the fuel price is tax, which only ever ratchets upwards.

GDB2222

Money_Grabber13579 said:

rob7475 said:

aoleks said:

I was talking about material prices... people are used to paying high prices, no one will lower them to what they used to be 2 years ago. current prices are the new baseline.

as for competitive market, the severe shortage of labour in this country won't be solved anytime soon. you can barely find a builder as it is.

Exactly this. There was uproar when fuel went over £1.70 a litre a couple of months back. Now we've just learned to accept it and the prices are increasing again.

Except at the start of covid, demand for fuel dropped significantly and so did prices. The same could happen with building material prices - the increased price will have cut demand to some extent and if the supply problems ever get sorted out, then there will be an oversupply and prices will fall. It depends on many variables but it’s impossible to say that prices will never go down.

Lots of people did very nicely out of Covid. Governments around the world poured money into their economies, and quite a chunk of it has found its way into the building industry. Demand is very high, and prices likewise. But, that’s not a permanent state of affairs.