The Temperature’s Rising.

Gotta start TFTW early this week. When you read this, I’ll be a year older and down-west, sitting in a sauna, regenerating myself by jiggling my heat shock proteins. The cellular protection and repair afforded by this protocol will counter my ageing. The whisky over the same period will counter this anti-ageing. I should return still feeling thirty-five years old—quids in. This neatly leads me to this week’s topic.

Lately, I’ve been neck-deep in construction costs, getting a handle on this critical aspect of helping people do this ‘Love Coming Home’ thing. It’ll be no surprise that the impact of inflation on building an extension is alarming, but there is good news going forward.  I’ve got some figures to share soon, but here’s a sneak peek. That dreamy 3-metre kitchen extension you’ve been thinking about, including the downstairs loo and bi-folds to the garden, would have cost £73k in May 2022. Fast forward to now, and that price tag’s ballooned to £90k – a whopping 23% increase.

What’s fascinating though, is how the split of labour-materials has shifted. We’ve gone from a nearly even split to 45/55 in favour of materials. Translation? While the folks on the ground pocket 11% more, material costs have skyrocketed by 36%.

Now, for a slice of good news: another project I have on the books, priced at £79k last year, hasn’t budged. Alex at Proquant said, “It’s pretty much stayed the same, give or take £300. It’s a bit of a mixed bag with some costs up, and some down, but thankfully, key materials like timber and insulation have dipped by as much as 30%, softening the blow.” With inflation at around 8% over this period, building costs appear to have gone down. Yay.

My prediction is costs will go down further this year. The wider construction sector output dipped last year, which chimes with my experience of builders beginning to call and ask about future work for the first time in a few years. It won’t return to May 2022 levels, but later this year is a good time to start building.

This whole saga has me pondering the price of everything. Over lunch on Wednesday, my friend, Paul, threw out this nugget: in the ’80s, a decent salary meant earning your age in thousands. So, £50K in 1989 is now £126 K. This fits; a salary like that would have put you in a similar band to those who earn over £100K today: around 4% earn that amount or more in 2023.

It’s interesting, but what grabbed me was that the average UK salary in 1989 was £17k. It seemed high compared to the current £33K. I was right. To keep pace with inflation, that should’ve grown to around £43k today.

To add more context, the average UK house in 1989 cost £59k. Now, it will set you back £257k. Had house prices grown with inflation, the average house would be £150K. So Mrs Average would be all right on the 3x mortgage multiple that my dad talks about. But the reality is that since wages are down on inflation by 30% and house prices are up 71%, Mr Average is struggling at nearly 8x his salary.

Last week I was in a small Tesco in Southsea. I watched a little man walk out the door and push past a staff member with an arm full of food. He had my nine-quid rib eye in his stash. “He does that all the time,” said the fuming Tesco man. “The police aren’t interested; he comes when we don’t have a security guard. There is nothing we can do.” I’ve heard about this and even seen videos of groups of people doing it, but it is shocking to see it first-hand. This model citizen paid for his steak; it would have been easier to walk out with it.

So what about the cost of food now we’ve done wages and housing? According to ONS data, a loaf of bread was 50p in 1989, now 106p, and a pint of milk was 29p and now 66p. Inflation would have that 50p at 127p.

My assumption has long been that supermarket food is relatively too cheap. But I was wrong in the context of affordability. Despite supermarkets’ marketing messaging focusing on cheapness, our average wage has not kept pace with below-inflationary food price rises.

I met a man in a pirate bar recently. He was on some excellent benefits. £600 a week. Seemed happy with that. Suppose it’s fair. You legitimately can’t work and get the equivalent UK average salary. Additional benefits include tax-free income and the rent paid on top. Perhaps he’s exploring that remedy for the robot revolution I’ve encountered: Universal Basic Income (UBI).

From this, albeit generalised and anecdotal analysis, I conclude the system is creaking. We can keep paying for our steaks, make some noise or get on the UBI, grab some free food, and dress up like pirates. That said, I’m off to ponder these economic trends and age-related inflation as  I chill my boiling blood in the sauna—ooh, ahh.

This week’s web links include more data, a quiz, saunas, Paul’s enormous monument and something about Boris.

Feel free to let me know if you have any comments or suggestions. You will always find me at carl@carlarchitect.co.uk.

This Week’s Links:

Universal Basic Income explained.

Can you identify these Supermarket Slogans?

Office of National Statistics: Cost of Bread

Office of National Statistics: Cost of Milk

Bank of England Inflation Calculator

Latest Construction Output

Sauna Benefits Deep Dive and Optimal Use with Dr Rhonda Patrick

Sauna benefits – less of a deep dive.

Build your own sauna.

This looks very tasty.

I have to be honest and say I cannot stand the man as a politician, but it is a nice house, and he has planning consent.

This is pretty extraordinary A 1km long museum.

But not to be outdone, Paul (mentioned above) has designed this and is getting it built although he says “It’s now costing a lot more than when I designed it!”

Main image credit: The temperature’s rising, The fever is high, Can’t see no future…Cold turkey has got me on the run. (Lennon & DALL-E)