A British brickmaker has closed its 139-year-old factory – blaming a collapse in house building across the country as the UK economy suffers yet more setbacks.
Michelmersh Brick Holdings’ Charnwood plant, in Leicestershire market town Shepshed, has been building homes with traditional handmade red bricks since the Victorian era.
But after a slump in demand and ‘a lack of confidence’ among consumers, the firm has announced the factory will close as it prepares to consolidate its manufacturing operations at its other factory in Romsey, Hampshire.
Michelmersh said the closure will result in 28 job losses and the site could be put up for sale.
It comes as housebuilding figures plummeted to a 12-year low last autumn despite one of Labour’s key manifesto pledges being to deliver 1.5million new homes by 2030.
On top of this, builders across the country have started to scale back development plans due to rising costs following the war in Iran.
The impact of war is becoming more and more apparent in the construction industry, with Michelmersh reporting a 10 per cent dip in demand for bricks in the first three months of 2026 compared to last year.
To tackle surging costs, the construction industry is looking to use more timber if bricks and other traditional heavy materials become too expensive.
The entrance to Michelmersh Brick Holdings’ Charnwood plant, in Leicestershire market town Shepshed that has been building homes with handmade red bricks since the Victorian era
Charnwood produces 3million bricks a year yet Michelmarsh has announced the site will close as it prepares to consolidate manufacturing operations at a factory in Romsey, Hampshire
Michelmarsh’s chairman Tony Morris said the company had been hit by ‘low consumer confidence and the associated uncertainty in construction project commencement dates’.
He told the company’s AGM yesterday: ‘The decision to expand operations at Romsey has unfortunately facilitated the full wind-down of operations at our site with operations expected to conclude by the end of May.
‘The future for the freehold of is now under strategic review. We are grateful for the service of the team over many years and they will leave Michelmersh with our sincere thanks for all their efforts on behalf of the Group.’
Michelmersh will move all its operations to the Hampshire plant where there has been increased production of machine-made bricks.
Early brickwork in Leicestershire dates back to the Tudor era when the construction of redbrick buildings such as Bradgate House in 1542 – the home of Lady Jane Grey -replaced local stone and timber which was historically used in construction.
Thanks to the area’s deep deposits of red Keuper Marl clay, Leicestershire became a brickmaking hub for the UK.
The Industrial Revolution transformed brick building, turning small localised kilns into massive commercial operations and in 1887 Charnwood Forest Brick was founded in Shepshed.
During this period, bricks made in Charnwood were used to build local landmarks such as Loughborough Grammar School.
Carrying on into the 20th and then 21st centuries, Charnwood remained a centre for brick making.
In 1999, Charnwood Forest Brick was bought by Michelmersh where it produced roughly three million bricks per year.
The Leicestershire closure comes amid a series of setbacks for the UK economy.
Official figures in January revealed that just 47,600 new homes have been built in the capital since Labour came to power in July 2024, out of 309,600 across England.
The capital’s figure was far short of the target of 88,000 new homes a year set by the Government to meet its goal of 1.5 million across the country by 2029.
And it was revealed today that government borrowing soared by a quarter to a higher-than-expected £24.3billion last month after record debt interest costs.
Michelmersh said the closure will result in 28 job losses and the site could be put up for sale
Charnwood Forest Brick was founded in Leicestershire market town Shepshed in 1887
Bricks made in Charnwood were used to build local landmarks such as Loughborough Grammar School
Michelmarsh’s chairman Tony Morris said the company had been hit by ‘low consumer confidence and the associated uncertainty in construction project commencement dates’
The Office for National Statistics said borrowing was £4.9billion higher than a year earlier, to reach the second highest April level on record – surpassed only during the Covid-19 pandemic era, when borrowing was sent rocketing.
It was also £3.4billion more than the £20.9billion forecast by the UK’s independent fiscal forecaster, the Office for Budget Responsibility.
The latest figures showed interest costs on government debt hit £10.3billion – a record April high and £900million more than a year ago – as rising inflation affected index-linked gilts.
Chancellor Rachel Reeves is facing the twin threat of soaring inflation and slowing economic growth caused by the Iran war.
The ONS said borrowing for the financial year to March was revised down by £3billion to £129billion – down 15 per cent or £22.8billion on the previous year – due to ‘regular updates to our central government data’.
Public sector net debt stood at £2.94trillion, or 94.2 per cent of gross domestic product, in April – 0.5 percentage points more than a year ago and at levels last seen in the early 1960s.
Grant Fitzner, ONS chief economist, said: ‘Borrowing this month was substantially higher than in April last year and although receipts increased compared with April 2025, this was more than offset by higher spending on benefits and other costs.
‘Borrowing for the latest full financial year was revised down slightly, and on a comparable basis remains the lowest since the year ending March 2020.’
Experts said higher-than-planned welfare spending had also pushed up government borrowing for April.
They also warned that debt interest costs will keep rising over the months ahead as inflation is sent soaring by the Iran war and UK government bonds – also known as gilts – remain under pressure amid economic and political uncertainty.
Lucy Rigby, Chief Secretary to the Treasury, Lucy Rigby, said today: ‘We are cutting borrowing and debt – with our actions reducing Government borrowing by over £20billion last year – while driving growth through £120billion of additional capital investment over the Parliament.
‘Working families have benefited from falls in inflation and cuts to interest rates – and our non-negotiable fiscal rules will be all the more important to continue to protect them as we face the consequences of the war that we have played no part in.’
Meanwhile, UK retail sales tumbled at their fastest rate for almost a year as soaring petrol and diesel prices hit fuel sales and demand for clothing waned, according to separate official figures also unveiled today.
The ONS said the total volume of retail sales, which measures the quantity bought, fell by 1.3 per cent in April.
This marked the largest drop since May 2025 and was a heavier fall than expected by economists, who had forecast a 0.6 per cent decline.
It also compared with a 0.6 per cent rise in March, which was revised slightly lower.
Statisticians said the drop in volumes was particularly linked to a sharp drop in sales volumes of motor fuel, which slid by 10.2 per cent in April – the largest fall since November 2020.
Retailers said the drop was linked to motorists making fewer journeys and delaying filling up their vehicles in the face of high prices.
It came after volumes had spiked in March, with drivers stocking up after the breakout of the conflict in the Middle East.
Earlier this week, the price of petrol lifted to its highest level since the conflict began, at 158.52p per litre.
Petrol is up by 19.3 per cent since the war sparked a rise in crude oil prices, while diesel is 30.6 per cent higher.
Retail sales volumes were however still weaker excluding fuel, with a 0.4 per cent fall for the month.
Weaker sales from clothing retailers were also a drag on the performance during April.
Clothing firms saw a 2.4 per cent decline as they reported ‘variable weather conditions during the month’, lower demand and consumer sensitivity towards prices.
Non-store retailers, which is predominantly online retail platforms, also saw a decline for the month driven by weaker demand.
