WINCHESTER City Council is expecting to see a steep rise in the cost of house-building in the current economic climate.

Inflation is soaring with a rise between the first and second quarter this year of 8.5 per cent driven by high demand for materials post-Covid, rising energy costs and labour availability.

Two schemes at Whiteley and Winnall flats are unaffected as both are subject to a fixed price Design and Build contract with no specific provisions for materials inflation. 

The issue was raised by Cllr Charles Radcliffe at the full Council meeting.

Council leader Martin Tod said: "With regard to the council's future new build projects, three schemes have been submitted for planning consent but are subject to further consultation with regard to nutrient mitigation and therefore will not be tendered until a solution is found to this issue.

READ MORE HERE: Winchester Local Plan - where is the new housing going to go?

"The Council is currently evaluating a tender return for Southbrook Cottages, Micheldever the outcome of which will be reported to Members at Cabinet (Housing) on October 31. Interest in the project from contractors has been encouraging however there have been requests for contract clauses which share the risk for materials inflation which the Council has not been asked for previously for new build housing projects.

"Other factors which will affect the viability of future new homes projects are the recent increases in borrowing rates, which have risen significantly in last quarter and how the overall economic climate will affect property values and future rent levels.”