The rate of housebuilding in Wales could be affected by ongoing supply chain issues, with nine in 10 social landlords reporting issues.
A report by Tyfu Tai Cymru, which is part of Chartered Institute of Housing (CIH) Cymru, reported that nine in 10 organisations surveyed had either moderate or significant supply chain problems with their housebuilding, maintenance or retrofitting programmes.
Tyfu Tai Cymru contacted 31 organisations within the sector and found that access to timber has seen the most significant impact. Also items needed for all aspects of building homes and carrying out maintenance/repairs have been affected to one extent or another.
Organisations surveyed included 20 housing associations, 10 local authorities and one private developer.
Prices for materials had increased by 30% to 40% across a range of goods from timber to steel, concrete and fencing.
More than 75% of respondents told CIH Cymru that they thought issues in the supply chains had become more significant in the six-month period leading up to August 2021.
In addition to cost, 96% of respondents reported that one of the main impacts has been on time delays. Respondents cited the impact of COVID-19, Brexit and surges in demand at both a national and global level as some of the driving forces behind supply chain issues.
The UK and global supply chains have grappled with disruption as the world economy emerges from the coronavirus pandemic. Energy shortages in Asia and lockdowns due to outbreaks have slowed production, imports at UK ports have also slowed, and a shortage of heavy goods vehicle (HGV) drivers has exacerbated supply chain problems.
The report found that organisations are changing how they work in a variety of ways, including delaying some major work, increasing lead-in times and revising contract conditions with suppliers.
One survey respondent said the issues were the worst of their 30-year career.
Catherine May, manager of Tyfu Tai Cymru, said: “While we’ve strongly welcomed the clear vision set out by the Welsh government to deliver 20,000 low-carbon social homes and significantly improve the efficiency of existing homes, we can’t ignore the tension between that vision and the realities of the operating environment many providers of social and affordable housing are facing.
“These pressures aren’t going to subside overnight, while the sector must continue to adapt to these challenges, so too must the Welsh government seek to get ahead of these issues and create a focused plan so that we increasingly find ourselves on a stronger footing to meet our shared ambition for housing in Wales.”
Reflecting on the report, Helen White, chief executive of Taff Housing Association, said: “Without doubt supply chain challenges leading to higher prices and delays could severely hinder our ability to deliver the future homes we so badly need.
“Global events have created a perfect storm. We need to think creatively and work collaboratively with our partners in government and the private sector if we are to minimise the impact on future and existing tenants.
“The findings of this report back up all the anecdotal evidence: pressures on the supply chain are making a significant impact in the form of delays, shortages of labour and materials, higher costs and planning challenges.”
The report called on the Welsh government to consider a more planned approach to understanding supply chain challenges facing the sector, reviewing grant funding flexibility to account for cost increases and supporting SMEs with cash to ensure companies serving the sector remain sustainable during times of economic uncertainty.
The report recommended that housing sector bodies consider reviewing staff skills to identify where upskilling some roles could reduce reliance on supply chains, approaching procurement of goods and services as coalitions, and engaging tenants at an early stage to communicate the challenges being faced and use their expertise to inform each organisation’s approach.