French builders look to be able to revise quotes with rising prices

Building and decorating firms propose adding a clause to quotes if prices for raw materials continue to increase

It has been suggested that builders and other tradespeople in France should be able to include a clause in their contracts enabling them to revise their quotes in line with rising raw material costs
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French tradespeople have suggested the possibility of introducing a new clause into work contracts, which would enable them to revise their quotes if raw material prices increase significantly.

This comes as steadily rising house prices in all regions except Paris, as well as higher mortgage rates, are expected to push more people into buying discounted properties that need renovation.

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“Negotiations are picking up for properties presenting issues,” Yann Jéhanno, president of estate agency group Laforêt, told Le Figaro.

However, the war in Ukraine has caused the cost of raw materials to surge. “For a classic renovation [not involving structural work], expect a rise of 10-30% on your bill, depending on the work carried out and the materials used,” said Jean-Christophe Repon, the president of artisanal building firm union Capeb.

In concrete terms, this would normally come to an additional charge of €10,000-€15,000.

This has prompted fears within the building industry that property owners will begin to put projects off, although Olivier Salleron, president of the Fédération française du bâtiment, has said that so far: “We have not observed renovations being halted. The figures are still good.

“But the situation could become more strained in the future, with clients becoming more hesitant with regards to the rise in prices.”

Increasing costs could also result in industry professionals a clause de revoyure (review clause), which would enable them to alter their original quote in line with rising raw material price.

“The aim is obviously not to force this clause [onto clients] but to discuss with them and to explain their choice,” said Mr Salleron. “The added cost should not be shouldered by businesses alone.”

Banks tighten requirements amid rising prices

In the face of increasing renovation costs, banks are also taking steps to ensure that customers can pay off their loans.

“They are asking for additional back-up accounts – totalling around 30% of the cost of the work – in order to account for a rise in the cost of raw materials which service providers may pass on to the consumer,” said Sophie Ho Kong, director of strategy at real estate finance brokerage Finance Conseil.

“It is also not uncommon for them to demand updated quotes.”

War in Ukraine also causes building supply shortages

The conflict in Ukraine has also led to shortages, especially with regards to wooden palettes and paint.

The situation is under control for the moment, but the lack of supply could lead to delays to renovation work being carried out in France.

It is therefore recommended that you speak with your builder or decorator to check that everything will arrive on time.

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