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.

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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London trialling indoor air pollution filtration systems in nurseries

The Mayor has launched a programme of air quality audits to help clean up toxic air and protect the health of young children at nurseries in some of the most polluted parts of London.

The audits will target sources of indoor and outdoor pollution, with five of the 20 nurseries trialling new air filtration systems to test their effectiveness at reducing indoor pollution. They will focus on reducing NO2, PM10 and PM 2.5 as research shows children exposed to these smaller pollution particles and gases are more likely to grow up with lung problems and to develop asthma.

The new scheme follows 50 successful audits the Mayor delivered to primary schools earlier this year, which have already led to some schools taking action to close roads, upgrade their boilers, tackle engine idling and promote car-sharing schemes.

A recent study by University College London and the University of Cambridge,funded by the Mayor, found that indoor air pollution was significantly higher inside classrooms, due to a range of factors including the age of buildings, ventilation, positioning of windows, and wall-to-wall carpeting.

The findings suggested that the protection offered by the building increased the further away it was from the busiest roads and that airtight buildings may offer greater protection against pollution. The report also found that, in most classrooms, annual exposure to small particles was higher than recommended World Health Organization guidelines, and that this was caused by a combination of indoor and outdoor sources.

The impact of outdoor air pollution on indoor air quality underlines the importance of the hard-hitting measures Sadiq is already taking to tackle London’s toxic air, including introducing the 24-hour Ultra Low Emission Zone in Central London and cleaning up the bus fleet.

The audits will also review a range of methods to reduce pollution outside nurseries,including restricting road access outside entrances at drop off and collection times, moving playgrounds away from congested roads, installing green ‘pollution barrier’ hedges, tackling engine idling and promoting cycling and walking.

The £250,000 programme is funded as part of the Mayor’s Air Quality Fund and audits will be conducted by global engineering consultancy WSP, who will spend the next few weeks in the nurseries, assessing indoor and outdoor air pollution sources, looking at how children travel to the nurseries, and reviewing local walking routes including traffic crossings. These will be the first City Hall trials of indoor filtration, beginning in spring 2019, with results expected later in the year, alongside a toolkit that can be given to all non-participating nurseries so they can conduct their own audits.

Built into the programme is a ring-fenced starter grant of £4,500 for the 20 nurseries to help kick-start recommendations on completion of the audits.

The Mayor of London, Sadiq Khan said “It remains a shameful fact that London’s toxic air health crisis is harming the lung growth and respiratory health of our young children, and City Hall is determined to everything in our power to protect them. These nursery audits focus on indoor pollution as well as outdoor sources, and will help us understand ways we can stop toxic air from our congested roads raising pollution limits inside nurseries.

“The 50 school audits we delivered are already resulting in positive changes that are helping reduce pollution and clean the air for thousands of pupils. We will continue to prioritise the health of all Londoners with a range of strong measures including the introduction next April of the 24-hour Central London Ultra Low Emission Zone, cleaning up our bus fleet and working with boroughs on local interventions.

“Now it is high time the Government stepped up and matched my ambition by delivering a new Clean Air and Environment Act and introducing the scrappage scheme we need to remove the dirtiest vehicles off our streets once and for all.”

Dr Simon Lenton, representative of the Royal College of Paediatrics and Child Health added “The adverse impact on health of air pollution is now well established in adults. Infants and children are more vulnerable as their lungs and brains are still developing. Children and infants spend many hours in nursery or at school and it is imperative we know what air pollutants they are exposed to and then take action to ensure the air they breathe is as pure as possible. This is particularly important in proximity to high traffic density and close to industrial areas.”

Louise Beanland, Governor of Melcombe Primary School who received an audit, concluded “I welcome the commitment that the Mayor is showing to doing everything he can to improve the health and wellbeing of our children. The announcement of the 20 nurseries selected to receive an air quality audit and, other interventions, is yet another sign of such a commitment’.

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Art meets architecture pt.1 – Music

Architecture is a very tangible example of creativity. You can see it with your eyes, touch its exterior, feel its fabric and walk its hallways. Music however is much more visceral art form. The notes and harmonies paint vivid pictures in your mind rather than in front of you. These landscapes are unique to you because music by its very nature is subjective. Imagine then, if you could hear architecture. The way a structure is perceived would immediately change and the landscape you perceive would be a perfect combination of the visceral and the tangible. This has been achieved with a restoration project in Croatia.

Following utter devastation to Zadar in Croatia during WWII, hasty reconstruction work was carried out soon after in an earnest attempt to rebuild the area. The result (as so often following WWII around the world) was a bland and uninspiring expanse of concrete. In this case, an unbroken, monotonous concrete wall along the seafront.

Architect Nikola Bašić decided to try something different and breathe life into the area as part of a project to redesign the new city coast, Nova Riva. On 15th April 2005 he opened a wind and wave powered organ to the public – the first of its kind. As waves break against the altered shoreline, the organ creates somewhat random but harmonic sounds.

wave-organ_11212015

As wind and waves pass through the organ, notes are sounded at random. Pipes within the organ have been carefully tuned so as to only produce notes that harmonise well together, meaning that despite the unpredictability and spontaneous nature of this instrument/structure, the overall sound is always pleasing on the ear.

The sculpture is 230 feet long and comprises 35 organ pipes embedded within the concrete, which sound different notes as you walk along the promenade. The pipes are an intricate system of polyethylene tubes and resonating cavities which turn the site into a large musical instrument, played by the wind and the sea.

The Sea Organ (known locally as Morske Orgulje) has become somewhat of a tourist attraction, as well as drawing regulars from the surrounding areas to enjoy its song. Since its original opening, white marble steps leading down to the water have now been added, giving people somewhere to sit and gather their thoughts.

In 2006, the Sea Organ was awarded with the prize ex-aequo of the fourth edition of the European Prize for Urban Public Space.

Listen to the organ’s beautiful music below:

Whilst this is obviously a very special and unique concept, it perhaps raises the interesting idea that architecture can actually be multi-functional and appease more senses than just sight. We all live, work and play within the built environment. Wouldn’t it be interesting if as well as us interacting with our surroundings, our surroundings could also interact with us?

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Government must do more to tackle late payment in construction

The Government needs to wake up and legislate statutory requirements to make late payment a relic of the past, according to industry experts.

The business, energy and industrial strategy select committee has published ‘Small businesses and productivity’, a report which identifies the huge damage that late payment is inflicting on small business.

Rachel Reeves, chair of the committee, said “Many SMEs are placed in a stranglehold by larger companies deliberately paying late and ruthlessly taking advantage of their suppliers, causing these firms financial instability.”

Reeves went on to call for a statutory requirement for medium and large companies to pay outstanding invoices within 30 days, especially those involved in public procurement.

The National Federation of Builders (NFB), the voice of construction SMEs and regional contractors, welcomes the select committee’s long overdue recommendations, as well as the appeal to tackle late payment.

Jeremy Corbyn, leader of the Labour Party, highlighted in April 2017 how late payment hurt the UK construction industry and used his party’s general election manifesto to declare war on this practice.

The Conservatives also pledged to ensure large contractors complied with the voluntary Prompt Payment Code, which requires invoices to be paid within 60 days.

However, very little has changed. Carillion was able to win work from local government right up until its collapse, despite imposing 120-day payment terms which could be sidestepped upon paying a fee.

Richard Beresford, chief executive of the NFB, said “Late payment prevents businesses from investing, stops workers from getting paid and, ultimately, forces companies to shut down.

“It’s a shameful way to treat business partners in the supply chain but, almost one year from the collapse of Carillion, we have learnt absolutely nothing.”

Neil Walters, national chair of the NFB, concluded “Late payers continue to win public work and small businesses are left begging for their hard-earned money. Voluntary reform is simply not working and the Government needs to wake up and legislate statutory requirements to make late payment a relic of the past.”

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Volume of new homes being built continues to rise

Homes England have recently published their latest official housing statistics, which show the number of homes being built in England continued to rise in the first half of this financial year.

Between 1 April and 30 September 2018, programmes managed by Homes England started building 15,766 homes on site and completed a total of 15,704 homes. These figures represent 15% and 31% increases on the first half of 2017-18.

Affordable homes represented 63% of the housing starts (9,909 homes) – a 42% increase on the same period last year – and 71% of the housing completions (11,091 homes), a 19% increase on the number of affordable homes completed in the first half of last year.

A total of 5,857 homes for market sale were started in the six months to 30 September 2018 – a 13% cent decrease on the same time last year – however, the number of market sale homes completed in this period was up 69% to 4,613, compared to 2,737 last year.

Of the affordable homes started, 5,714 were for Affordable Rent – a 26% increase on the 4,526 started in the same period last year. A further 3,702 were for Intermediate Affordable Housing schemes (including Shared Ownership and Rent to Buy), representing a 71% increase on the same period last year. The remaining 493 affordable homes started were for Social Rent, an increase of 68% on the 294 started in the first six months of last year.

Of the affordable homes completed, 7,943 were for Affordable Rent – a 10% increase on the 7,219 completed in the same period last year. A further 2,841 were for Intermediate Affordable Housing schemes – an increase of 50% on the 1,900 completed in the same period last year. The remaining 307 affordable homes completed were for Social Rent, an increase of 76% on the 174 completed in the first six months of last year.

Nick Walkley, Chief Executive of Homes England, said “These latest figures show the overall number of homes being built continues to rise, reflecting the hard work being carried out by the housing industry to build better homes faster.

“However, while they are encouraging to see, we cannot be complacent. We know there is more work to be done to meet the Government’s ambition to deliver 300,000 new homes a year, so we will continue to intervene in the housing market and use our land, powers and influence to make homes happen.”

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Storage space boom – warehouse construction on the rise

As the popularity of online shopping continues to increase, the demand for storage space has followed, with an estimated £3 billion worth of contracts outlined for the construction of industrial warehouses across the UK in 2018.

According to construction analysts Barbour ABI, the first three quarters of 2018 accumulated £2.2 billion worth of warehouse construction contracts, an impressive increase of £800 million compared to 2016 figures. With the demand for consumer goods continuing to grow and the competitiveness of delivery speeds being of the utmost importance in today’s retail market, businesses are looking for convenient storage space to fulfil these needs to carry on competing.

Barbour ABI

Looking at the figures from a regional perspective, the East and West Midlands lead the way with a combined £2.6 billion worth of warehouse construction since 2016, worth over £400 million more than any other region. The location of the two regions alongside its convenient motorway links and rail connections makes them an attractive option for businesses.

Michael Dall, Lead Economist at Barbour ABI commented, “Since the start of the decade the UK has seen ever increasing numbers of warehouses being constructed as firms re-aligned their offer to meet the increasing propensity of consumers to shop online. From fashion to food, the need for more storage space to deliver to customers quickly and efficiently has resulted in a boom for warehousing construction.”

“With an increasing amount of shopping taking place online, we expect the number of warehousing construction contracts to continue to increase. In 2017 Barbour ABI recorded a 22% increase compared to 2016 and it is likely we will see a similar increase in 2018. With a number of these being Amazon warehouses, and considering the ambitious growth plans they have, this is clearly an area of construction that is primed for growth.”

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Sharp fall in migrant workers shows UK is already changing ahead of Brexit

The UK labour market is already changing ahead of its exit from the EU as the number of EU migrant workers fell rapidly over the last year, according to the latest labour market figures compiled by The Resolution Foundation

The figures show that the number of EU migrant workers in Britain fell by 4.5 per cent (107,000 workers) in the year to September 2018 – the sharpest fall since records began in 1997.

Britain’s pay recovery is gathering momentum too, with nominal pay growing by 3.2 per cent in the three months to September. This is the strongest growth since December 2008, though still well below the pre-crisis average of over 4 per cent. Above-target inflation means that real pay grew by just 0.9 per cent.

Stephen Clarke, Senior Economic Analyst at the Resolution Foundation, told buildingspecifier: “The sharp fall in EU migrant workers over the last year shows that Britain’s labour market is already changing ahead of its exit from the EU, and long before its post-Brexit migration plan is in place.

“Firms who employ a large share of migrant workers need to think now about adjusting to a lower migration environment, in terms of the workers they employ, what they produce and how they operate.

“The other big labour market shift that is still to come is a proper pay recovery. Yet we see further encouraging signs off the back of a tightening labour market. Nominal pay growth reached its highest level in a decade.

“However, a sustained pay recovery rests on stronger productivity and today’s sobering growth of just 0.1 per cent shows that this is still some way off.”

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Government plan to address long-term housing challenges

Homes England recently set out how they intend to improve housing affordability through a new five-year Strategic Plan – helping more people access better homes in areas where they are needed most. Buildingspecifier takes a look:

The government plan, which runs up to 2022/23, outlines an ambitious new mission and the steps the national housing agency will take, in partnership with all parts of the housing industry sector, to respond to the long-term housing challenges facing the country.

The new plan sets out far-reaching delivery objectives:

  • Unlock public and private land where the market will not, to get more homes built where they are needed
  • Ensure a range of investment products are available to support housebuilding and infrastructure, including more affordable housing and homes for rent, where the market is not acting
  • Improve construction productivity
  • Create a more resilient and competitive market by supporting smaller builders and new entrants, and promoting better design and higher quality homes
  • Offer expert support for priority locations, helping to create and deliver more ambitious plans to get more homes built
  • Effectively deliver home ownership products, providing an industry standard service to consumers

Speaking about the updated plans, Communities Secretary Rt Hon James Brokenshire MP said “This government is committed to delivering 300,000 homes a year by the mid-2020s and help more people get on the housing ladder. Homes England is at the heart of these plans.

“I welcome their comprehensive vision that sets out how through their powers and expertise they will maximise Government investment to deliver the homes communities need.”

Sir Edward Lister, Homes England Chairman, added “Ultimately, we need to disrupt the housing market. Homes England plans to be bold, creative and think big. We hope the whole of the housing sector – big and small, up and down the country – will join us for the next five years and beyond.”

Nick Walkley, Homes England Chief Executive, concluded “The new Homes England is all about making homes happen – and our new 5-year plan sets out our ambitious new approach. We are committing to boosting housing supply, productivity, innovation, quality, skills and modern methods of construction to help make a more diverse and resilient market. In return, we are calling for partners and the wider industry who share our ambition to challenge traditional norms and build better homes faster.”

The five-year Strategic Plan follows the Budget announcement of seven more strategic partnerships with housing associations, which will deliver an additional 13,475 affordable homes by March 2022.

The new partnerships will secure a total of £653m in funding from the Affordable Homes Programme, delivered through Homes England, including homes for social rent in areas of high affordability pressures.

This is in addition to the first eight strategic partnership deals announced in early July, bringing the total number of additional affordable homes that will be delivered to 27,755.

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Price-hikes on skips and diesel prove problematic for builders

According to the latest construction industry research, nearly two-thirds of builders have had to pass skip price increases on to clients and a fifth have had to pass on diesel price rises, making home improvement projects more expensive for home owners. Building Specifier delve into the details provided by experts the Federation of Master Builders.

The key results from the FMB’s research into skip prices are as follows:

  • Three quarters of builders have said that the price of skips has risen over the past 12 months
  • The average cost of an eight yard skip has gone up by £24 over the past year, meaning an additional cost of £360 for the average extension
  • Nearly two-thirds of builders have had to pass skip price increases on to clients, making home improvement projects more expensive for home owners
  • Three quarters of builders said that skip price rises have squeezed their margins

The widely-reported hike in diesel prices is also starting to bite and is having the following impact on small and medium-sized (SME) construction firms:

  • Nearly half of construction SMEs have made lower margins on projects
  • Nearly a fifth (17%) have been forced to raise the prices they charge clients
  • More than one in ten have had to turn down jobs they would have normally accepted as they are too far away
  • 10% have taken steps to reduce vehicle use

Commenting on the research, Brian Berry, Chief Executive of the FMB, said “The increase in the price of skips and diesel is bad news for builders and home owners alike. Nearly two-thirds of builders have had to pass skip price increases on to clients and a fifth have had to pass on diesel price rises. This has made home improvement projects more expensive for home owners. What’s more, the impact of the rising price of skips could have an impact on our communities through a rise in fly-tipping. No matter how much the price of skips might increase, there is never any excuse for fly-tipping and any individuals found doing so should be severely reprimanded. In 2016 and 2017, more than one million incidences of fly-tipping were dealt with by councils in England and the last thing anyone wants is for this number to increase.”

“The increase in the price of skips and diesel have come at a bad time for the UK’s builders. The cost of doing business is rising more generally for construction firms. Wages and salaries are all rocketing because of the ever-worsening skills shortages in construction. What’s more, material prices have been rising because of the depreciation of sterling following the EU referendum. Looking ahead, material prices are expected to cause an even bigger headache going forward, with recent research from the FMB showing that almost 90 percent of builders believe that material prices will rise in the next six months. We are advising builders to price jobs and draft contracts with this plethora of price rises in mind to avoid a further squeeze on already razor thin margins.”

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OPINION: Materials handling industry is at the mercy of Brexit

Building Specifier caught up with a leading expert in materials handling who warns of the impact Brexit will have on his industry.

Paul Casebourne, who has years of experience in creating engineering solutions and runs the Materials Handling Hub, believes that the industry has been forgotten as one of the potential casualties of the UK leaving Europe.

He claims the industry is already suffering as a result of the uncertainty about the country’s relationship with the EU.

The materials handling industry currently accounts for some of the biggest imports and exports in the UK, with machinery and vehicles accounting for a combined worth of £55b.

Half of this business is done with Europe and Mr Casebourne believes that if it is more expensive to trade with EU states post-Brexit, the outcome could be catastrophic.

He also warned “there are at least two major global materials handling companies who await the results of the troubled Irish Border question where skills are drawn from both sides of the divide.”

“The UK currently benefits from the free movement of goods within the EU. This means imports from other EU member states have no import duties, taxes or customs clearance,” he said.

“More to the point the harmonisation of engineering standards requires representations if we are to keep up with international projects. We currently have EU rights to be included in tenders within the EU, I have heard of no plans to make up ground in this respect.

“Forty years of work in the balance and not a word of comfort from the political structure.”

Casebourne also expressed his concern on the situation in the UK around export and import duties.

“Following Brexit, the UK will be back to custom clearing its EU imports as well as paying taxes and import duties on them and it’s possible that some goods will require an import license after Brexit,” he said.

“The extra tier of administration simply makes it harder to compete and adds unnecessary delays to international trade.

“Companies will have to revert to commercial invoices which determines the import duty they have to pay – all of which can have a huge impact on a business.”

Paul Casebourne

Mr Casebourne believes that while many industries have expressed their concern about what Brexit means now nobody seems to have looked at the impact this will have – and that it is already having – on the materials handling industry.”

Mr Casebourne, who has worked in the industry for more than 40 years and supplies equipment to a range of industries and also creates bespoke solutions, added that “we’ve already seen a number of big projects put on hold and people are reluctant to invest in new equipment.”

“Across the board business is not as good as it could be in the industry and the uncertainty about the future is not helping” he added, who via his Materials Handling Hub website shares best practice and brings together customers and suppliers.

“The whole situation really is intolerable at the moment while we are neither in or out. The UK has launched itself headlong into a 20-year project with no plan B, in fact without any plans at all whilst still handcuffed to the EU, powerless to put the plans in place that we need to get on with investing in our future.”

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