Building News is an information portal for all professional building specifiers. Here you can find all of the latest construction news from around the UK and the rest of the world.

A blow to the UK’s construction industry?

A potential exit from the European customs union and the single market without a transitional period could have a significant impact on supply chains say leading accounting, tax and advisory firm Blick Rothenberg.

Alex Altmann, Partner and head of the German desk at Blick Rothenberg, said “The construction industry in the UK is dependent on foreign investment, overseas suppliers and European workers.

“Over 60% of all building materials used in the UK are imported from the EU. If the UK ceases its membership of the customs union, the cost of bringing building materials, machinery and other goods from the European mainland would significantly increase due to lengthy import procedures, potential duties and the administration of import VAT to be paid.”

“Not being a member of the single market could see free movement of workers being compromised and a shortage of the workforce would be the result, leading to higher costs for companies hiring workers on UK construction sites. Nationwide, European nationals account for around 10% of the UK construction industry’s workforce. On building projects in London this figure stands at around 40%.”

The UK Government plans to invest significantly into infrastructure in the next 20 years, with projects such as HS2, Crossrail 2 and a new runway at Heathrow airport. The UK has also a dramatic housing shortage and as reported in the media England alone requires about 3 million new homes by 2040.

“The UK’s construction market is very competitive with major European construction and project management companies bidding for building work, with Germany being one of the strongest international market participants. An exit from the European customs union and the single market could have a challenging effect for the UK’s construction industry”

“Many building projects in the UK are European ventures. From clients, investors and design teams to main contractors and specialised craftspeople – the UK’s construction industry is largely based on the EU membership. Ultimately the loss off access to the single market could result in the UK being a less competitive player in the international construction industry.”

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It’s no mirage, the industry is changing fast……

Says Tony Gittings, managing director of Rinnai, a global leader in the manufacture of hot water heating units and systems. And it is the end user that is emerging as the determining force in making changes to suit today’s demands and expectations.

In the past several years we have seen some extraordinary changes in our little patch of the wide heating and plumbing arena. Gone are the established supply lines, gone too, is the dominance of the ‘traditional’ products in the supply of hot water in commercial and institutional sites.

Water is the stuff of life, simple as that. It is a very precious commodity that is the foundation of our entire quality of life. In 2013 the Energy Savings Trust completed and issued a major report titled ’At Home with Water’. The report detailed our domestic use of water. It came up with some stunning figures re: the amount of water used domestically – each person uses approx. 140 litres of water daily with the average household using almost 350 litres per day. Just think of a one litre bottle of water, then multiply it 350 times – it’s a huge amount and it is not decreasing.

One of the biggest water companies has a consumption guide on its website and it estimates that just one person will use almost 180 litres of water daily. A quick website also shows the per person consumption of hot water when they are away from home. When someone stays at a hotel or hospital, they consume 160 litres of hot water each day! Offices use a measly 22 litres in comparison!

So, there is no doubt that hot water consumption is rising and, given the rapid development of techniques building energy efficient homes which require less than 10kW heating, means that hot water provision is getting more and more driven by the end user.

At the moment, domestic hot water provision is provided via the boiler, usually a combi type, although those homes with renewables tend to use a water heating appliance as an auxiliary supplement. But the biggest development in the last few years has been the launch of installing companies which are wholly and totally based online. These typically give the consumer a quote, a date for installation and provide finance. The installer is given a date and time to do the installation – no buying of materials – the domestic heating marketing is now thinking inside the Box because of innovations like Boxt.

It really does look like the days of box-shifting are gone.

Commercial systems of hot water provision come mainly via the traditional style ‘stored’ system – or the Rinnai continuous flow method where hot water is delivered instantly, economically and efficiently in an engineering sense. But the consumer and the installer – domestic or commercial – are beginning to demand a complete service now. We have seen and even anticipated these changes.

Rinnai has made considerable financial investments in the two critical areas of any commercial enterprise – high quality of products and service excellence aimed solely at the installer and their end user. We espouse the concept of complete system efficiency in terms of hot water delivery and we practise that every single working day.

Our products are of the highest possible quality, offering long term, robust performance giving useable hot water on demand at the turn of a tap, all at an economic and energy efficient level. Coupled with that is our service – we have a dedicated salesforce dealing directly with installers, contractors, designers, consultants and facilities & estate managers.

We have very deliberately aimed the bulk of all marketing communications direct to these sectors offering instant technical support, design service, comprehensive training courses at either our own tailor-made facility or at a venue of a customer’s choice. We have also initiated five accredited CPD courses.

We believe that we are the best value-for-money units and systems of hot water delivery currently available to the UK commercial and residential market. And we have proof of that in two independent reports from AECOM which show continuous flow as being at least more economic than any other type of system or unit.

For more information on the RINNAI product range visit www.rinnaiuk.com
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Construction output rises despite Brexit uncertainty

The Government must not be complacent about the damage a ‘no deal’ Brexit would cause amid positive signs of growth in the UK construction industry, says the Federation of Master Builders (FMB).

Commenting on the construction output figures for November 2018, published by the Office for National Statistics, Sarah McMonagle, Director of External Affairs at the FMB, said “The UK construction sector grew by 2.1 per cent during September to November 2018 compared with the previous three months. This is despite unparalleled levels of political uncertainty around the very real prospect of a ‘no deal’ scenario. However, we are urging the Government not to allow these results to create a false sense of security. Since November, political uncertainty has cranked up and is increasing every day. A growing and prosperous construction sector will be a distant memory if the Government allows the UK to crash out of the EU without a deal in place.”

“The construction industry is also extremely concerned about the Government’s proposed post-Brexit immigration system. In the Immigration White Paper, published at the end of last year, the Government revealed that they will make few allowances for low skilled workers to enter the UK post-Brexit. Most tradespeople will be defined as low skilled and therefore will not be permitted to enter the UK, regardless of whether they are from the EU or further afield. It is crucial that the Government introduces a post-Brexit immigration system that continues to allow us to draw on essential migrant workers or else their house building and infrastructure targets will be totally unachievable.”

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Intelligent systems will help UK transition to clean and affordable energy

New small-scale renewable electricity providers to be guaranteed payment for excess electricity supplied to the grid under government proposals unveiled this week – protecting consumers from unfair costs associated with current scheme.

Plans for Smart Export Guarantee could build a bridge to the smarter energy system of the future, which can help unlock technological innovations like home energy storage and more efficient electric vehicle charging.

Households and businesses installing new solar panels will be guaranteed payment for power provided back to the grid under government proposals set out this week to unlock the smart energy systems of the future- an important upgrade to the current Feed-in Tariffs scheme.

The proposed ‘Smart Export Guarantee’ (SEG) would replace the existing ‘Feed-in Tariff’ scheme (FIT), with electricity suppliers paying new small-scale energy producers for excess electricity from homes and businesses being put back into the energy grid. The new scheme could create a whole new market, encouraging suppliers to competitively bid for this electricity, giving exporters the best market price while providing the local grid with more clean, green energy, unlocking greater choice and control for solar households over buying and selling their electricity.

With the cost of solar falling by 80% since 2008, it’s the right time to review the way these payments are made- with the scheme currently costing consumers approximately £1.2 billion a year. The SEG would mean households and businesses installing new renewable energy generators would be paid transparently for the energy they produce- protecting consumers from cost burdens, by using established smart technology.

Currently under the FIT scheme, accredited households and businesses who install small scale electricity generation are assumed to export 50% of the electricity they produce and are paid for it-even when the electricity is not needed by the grid or they export less than 50%.

Energy and Clean Growth Minister Claire Perry said “This new scheme could help us to build a bridge to the smart energy system of the future, with consumers firmly at its heart – not only buying electricity but being guaranteed payments for excess electricity they can supply to the grid.

“It could also reduce strain on energy networks with a more decentralised and smarter local network delivering resilience much more cost effectively, unlocking innovative products for electric vehicles and home energy storage; a win-win for consumers and the environment and a key part of our modern Industrial Strategy.”

The proposals, combined with existing technologies like smart meters and battery storage could also help build a bridge to smarter more efficient energy systems of the future, with the potential to work together with electric vehicle and standalone batteries to store and sell electricity to the grid when demand is high; in turn cutting consumer bills, reducing strain on energy networks, and giving consumers more control of their energy use.

Government investment in clean energy is at the heart of its world-leading modern industrial strategy, with the Clean Growth Strategy pledging more than £2.5 billion investment in low carbon innovation by 2021. The FIT scheme, which closes to new applicants on 31 March 2019, has overachieved on its original objectives, outstripping installation predictions by nearly 100,000 with over 830,000 solar installations producing enough power for two million homes.

Some 560,000 households and business are currently generating electricity under the FIT scheme through a range of measures including anaerobic digestion (generating energy from waste products), wind power, biomass and hydro-electricity- but with the majority (99%) using solar panels fitted to rooftops.

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Bringing beauty into the built environment

A commission to champion beautiful buildings as an integral part of the drive to build the homes communities need has been recently announced by the Communities Secretary Rt Hon James Brokenshire MP.

The ‘Building Better, Building Beautiful’ Commission will develop a vision and practical measures to help ensure new developments meet the needs and expectations of communities, making them more likely to be welcomed rather than resisted.

This move follows the government recently rewriting the planning rulebook to strengthen expectations for design quality and community engagement when planning for development. The new rules also ensure more consideration can be given to the character of the local area.

This commission will take that work further by expanding on the ways in which the planning system can encourage and incentivise a greater emphasis on design, style and community consent. It will raise the level of debate regarding the importance of beauty in the built environment.

The commission has 3 aims:

  • To promote better design and style of homes, villages, towns and high streets, to reflect what communities want, building on the knowledge and tradition of what they know works for their area.
  • To explore how new settlements can be developed with greater community consent.
  • To make the planning system work in support of better design and style, not against it.

Communities Secretary Rt Hon James Brokenshire MP said “Most people agree we need to build more for future generations, but too many still feel that new homes in their local area just aren’t up to scratch.

“Part of making the housing market work for everyone is helping to ensure that what we build, is built to last. That it respects the integrity of our existing towns, villages and cities.

“This will become increasingly important as we look to create a number of new settlements across the country and invest in the infrastructure and technology they will need to be thriving and successful places.

“This commission will kick start a debate about the importance of design and style, helping develop practical ways of ensuring new developments gain the consent of communities, helping grow a sense of place, not undermine it. This will help deliver desperately needed homes – ultimately building better and beautiful will help us build more.”

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£38m injection to increase accommodation for homeless in the capital

Thousands of extra homes will be made available for vulnerable Londoners at risk of becoming homeless, Communities Secretary Rt Hon James Brokenshire MP has announced.

Through a new scheme, London boroughs join forces to provide safe accommodation for families on the edge of homelessness, backed by almost £38 million of funding from the government’s £1.2 billion overall investment in tackling homelessness.

The additional homes will help provide a long-term, stable solution for vulnerable families struggling to find secure accommodation, providing a safety net for those who may otherwise feel they have nowhere else to go.

Currently, all London boroughs are responsible for providing accommodation for those at risk of homelessness both inside and outside their area. However, this can often lead to areas competing for the best accommodation – driving up prices and slowing down the provision of quality housing for the most vulnerable.

The new scheme purportedly aims to stop this from happening by encouraging London boroughs to work together in boosting accommodation to tackle homelessness across the capital.

Communities Secretary Rt Hon James Brokenshire MP said “Everyone deserves a safe and secure home. I’ve seen for myself how hard each of the London boroughs works to provide those that are homeless with the support they need and a roof over their heads.

“This radical new way of working and unprecedented collaboration between the boroughs and government will make a real difference – providing more accommodation for the vulnerable and helping them to get back on their feet and away from homelessness for good.”

Councillor Darren Rodwell, London Councils’ Executive Member for Housing & Planning, added “With so many homeless households and so little accommodation available, London faces the country’s most serious homelessness challenge.

“Capital Letters is a crucial opportunity to do things differently – and we are extremely pleased to have the government’s support for this innovative work.

“Through collaboration, boroughs will collectively strengthen our market position and secure much better housing options for homeless Londoners.”

To date, 11 London boroughs have signed up to the scheme, with more expected to come on board in the future. Over the next 3 years, the scheme is expected to help over 35,000 households within Greater London out of homelessness.

 

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Construction bosses fear EU workers won’t return to UK after Christmas

The UK construction industry is asking its highly valued EU workers, who might be travelling home for Christmas, to please come back after the Christmas break, according to the Federation of Master Builders (FMB).

Research focusing on how the bosses of small and medium-sized (SME) construction firms view their EU workers concluded that:

  • 85% of construction SME employers that employ EU workers say that these workers are important in allowing their business to maintain and expand its workforce
  • 76% of these firms say it would have a negative impact on the health of their business if any of the EU workers they employ returned to their country of origin, now or post-Brexit
  • 94% of firms describe the quality of EU workers they employ as ‘good’ or ‘very good’

Brian Berry, Chief Executive of the FMB, said “Our research shows that EU workers are vital to the success of the UK construction industry and our message to these individuals is clear – you are highly valued and we need you. Christmas is now upon us and there’s a risk that those EU migrant workers who go home to their home countries for the festive period might not come back. With Brexit looming large on the horizon, EU workers in the UK are facing high levels of uncertainty over their future. Furthermore, since the depreciation of sterling, their wages aren’t worth as much as they were previously. Construction employers are genuinely concerned that this mixture of uncertainty about the future and less money in their pockets will make the UK a much less attractive proposition that it was pre-referendum.”

“Ministers haven’t done enough to reassure EU workers that they have a future in the UK. In our ‘Construction Industry Brexit Manifesto’, seven of the major trade bodies have called on the Government to embark upon a communications campaign that makes clear to our EU workers that they’ll have no serious impediments to gaining settled status. Indeed, both the Government and the industry need to do all that they can to put a positive message across. In the medium term, the construction industry can and should do more to attract and train a greater proportion of domestic workers. However, such is the extent of the current construction skills shortages, we’ll continue to need to draw upon a high number of EU migrant workers post-Brexit if the Government wants to meet its target for new homes and infrastructure projects.”

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London to spend £30 million to develop deprived areas

The Mayor of London, Sadiq Khan, has awarded nearly £30 million to projects which will boost local economies, improve the environment and bring people together in some of London’s most deprived communities.

The money has been awarded through the second round of the Mayor’s Good Growth Fund to 33 projects across the city – and will be delivered through the London Economic Action Partnership (LEAP), the Local Enterprise Partnership (LEP) for the capital.

The projects focus on supporting Londoners in areas with high levels of unemployment, youth violence and poor mental health, by supporting the creation of new jobs, investing in community assets and driving sustainable economic growth.

Nearly two-thirds of the funding will be invested in areas of London which rank in the top 20 per cent of the country’s most deprived wards, according to the well-established Indices of Multiple Deprivation.

The Good Growth Fund supports regeneration schemes which help Londoners influence how their local areas are shaped. Successful projects in this funding round include:

  • delivering up to 20,000 sq m of much-needed new industrial space in Barking to support local jobs;
  • creating new and refurbished performance, rehearsal, learning and play spaces at the Polka Children’s Theatre in Wimbledon, to support community outreach and creative learning opportunities for disadvantaged children and hard-to-reach families; and
  • investing in Centre 404 to provide much-needed support and services for people with learning disabilities and carers from the LGBTQ+ communities in Islington, Camden, Haringey, Enfield and Hammersmith & Fulham.

In the first funding round earlier this year, the Mayor awarded £24 million to deliver 27 projects. In addition, a further 27 projects were awarded a share of £1.6 million to develop their proposals with a view to submitting a full funding bid in due course. This support helps us to build a balanced programme by addressing any gaps resulting from the open call process.

The Mayor of London, Sadiq Khan, said “These projects aim to give Londoners of all backgrounds the opportunity to be actively involved in shaping how their city grows and delivering more places to live, learn, work and play.

“I’m so impressed by the range of bids we received – this is testament to the creativity and ingenuity in London’s diverse communities.

“I’m committed to supporting ‘good growth’ by building a city where all Londoners have access to the same opportunities and I look forward to seeing all the positive impacts these projects will have in the future.”

LEAP Board Member, Alexandra Depledge MBE, added “I have always believed that Londoners know what’s best for their communities and this is evidenced in the wide variety and depth of innovation on display in the projects backed by Round 2 of the Good Growth Fund. These investments are good growth in action.”

Sarah Preece, Executive Director, Mountview – which received £843,000 in round one of the Good Growth Fund – concluded “The support from the Mayor’s Good Growth Fund means Mountview is able to open fantastic new performance and training facilities to Londoners, including artist hub spaces, studios and a welcoming box office space – as well as an enhanced public realm with new planting and seating and opening up access to Peckham Square, the Surrey Canal greenway and the green route to Burgess Park.

“These spaces help us to achieve our mission of providing affordable performance training for people of all ages as well as opening community spaces for hire and providing two brand new theatres. Generations to come will benefit from the access to culture, recreation and learning that this enables.”

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UK housing market faces challenging 2019, warn experts

The UK housing market is unlikely to see much change in 2019 with a continuation of weakening sales activity, according to the RICS UK Residential Housing Forecast 2019.

The UK housing market has lacked impetus in 2018, having continued to struggle with a lack of homes on estate agents books; affordability issues; uncertainty caused by Brexit; and prospective interest rate rises.

Looking ahead, it is unlikely that sales will grow in 2019. In the past two years, sales activity has declined, and annual completed transactions remain significantly below the 1.7million high reached in 2006. Given the obstacles in the current market it is anticipated that activity will weaken further.

As sales activity continues to falter, house price growth will continue to fade in the first half of the year and is expected to come to a standstill by mid-2019. As such, the RICS Housing Forecast 2019 suggests prices will neither grow nor fall in the near future (0%).

The stagnation of house prices is underpinned by the lack of new properties being listed for sale. In the second-hand market, not enough properties have been listed to replenish those sold. This has been evident in the RICS data throughout 2018, as average stock levels remain near all-time record lows. The number of new properties being listed for sale has fallen consistently, and in November, almost half of survey participants reported the number of market appraisals undertaken over the month was down on the year before. All these indicators suggest it is unlikely that the coming months will see a marked increase in supply across the second-hand market.

Furthermore, despite new policy announcements from Government, overall growth in new builds has slowed, falling short of targets and therefore failing to help replenish estate agents’ stock levels.

A consequence of these lower levels of stock is the impact this will have on those contemplating moving home. Respondents to the UK Residential Market Survey have pointed to a sustained decline in the number of new enquiries they are receiving from would-be buyers throughout 2018, resulting in a fall in the number of agreed sales being made. In the near term, it is doubtful that activity levels will improve.

Uncertainty created by the Brexit process is causing buyers and sellers to sit tight in increasing numbers, according to the November 2018 RICS UK Residential Market Survey.

In the lettings market, the sustained demand vs supply challenge prevails, which is likely to squeeze rents higher, albeit modestly, over the coming four quarters.

Tarrant Parsons, RICS Economist comments “Demand has tailed off over recent months, with Brexit uncertainty causing greater hesitancy as the withdrawal deadline draws closer. That said, the current political environment is far from the only obstacle hindering activity with a shortage of stock continuing to present buyers with limited choice, while stretched affordability is pricing many people out.

“For the year ahead, this mixture of headwinds is unlikely to dissipate, meaning sales volumes may edge a little lower. On the back of this, house price growth at a UK level seems set to lose momentum further, although the lack of supply and a still solid labour market backdrop will likely prevent negative trends.

“It’s not all bad news for the outlook however, as sentiment could be lifted if a deal were to be reached on the withdrawal agreement before too long. Furthermore, mortgage rates are set to remain favourable, with any changes in monetary policy expected to be minimal over the next twelve months.”

Hew Edgar, RICS Head of Policy, adds “We would hope that uncertainty around Brexit will be resolved toward the beginning of 2019, allowing for fluidity to start to return to the housing market. However, there are a number of domestic hurdles to overcome, such as a lack of supply, labour shortages, and the infrastructure deficit, amid increasing material costs.

“Throughout 2018 as the supply pipeline remained weak, a number of policy proposals were made to address the market issues, most notably land value capture across the UK, and vacant land tax in Wales; but discussions around innovative policy measures need to continue through into implementation. It will be interesting to see if the divergence of policy in the constituent parts of the UK will bear results and we will continue to monitor the effects of housing policy through our market surveys.

“Looking at transaction levels, residential property taxation is in urgent need of review; and this goes for both SDLT and the current council tax system. Both affect buying behaviours and therefore market activity, with council tax being particularly outdated.

“If the Government wish to alleviate market concerns, that will persist Brexit or otherwise, then all possibly approaches and outcomes should be considered, including looking at tackling the rising number of long term empty homes – which number 250,000 across the UK; a figure that borders on the Government’s new homes target.”

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