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.

Foundations laid for new state-of-the-art power link between Great Britain and France

A major new project to install a one Gigawatt (1000 MW) Direct Current interconnector linking the electricity markets of Britain and France via the Channel Tunnel has just put down its foundations. The foundation stone of the Folkestone Converter Station was laid this morning by Jesse Norman, Minister for Industry and Energy.

ElecLink, for which the investment in the construction is estimated at approximately €580 million, is based on a proven economic model and represents a strategic opportunity for the Eurotunnel Group. The project will generate approximately 300 new jobs during the construction phase together with ongoing jobs needed for the operations and maintenance throughout the life of the project.

The interconnector will provide enough capacity for more than 1.65 million homes per year, increasing the current Anglo-French exchange capacity by one half, and enhancing the security of electricity supply for industrial and business consumers. ElecLink will help to solve the ‘energy trilemma’ identified by the World Energy Council by maintaining security of supply, transitioning to a ”cleaner” economy and keeping prices low for consumers as future electric demand increases and adapts to population growth and the adoption of new transport modes for example electric cars.

ElecLink will have a very low environmental impact by making use of the existing Channel Tunnel infrastructure for its cable system, thus avoiding any interference with marine life. It is also expected to reduce carbon dioxide emissions by approximately 6 million tonnes by enabling demand in Britain and France to be met by the most efficient generating plants.
A project endorsed by the French and the British government and the European Commission, the project has been granted a 25 year exemption by regulators enabling ElecLink to operate as a private interconnector and to sell its electricity capacity over time.

It will be delivered with world leading partners. Siemens has been designated to construct the converter stations in both UK and France; the fabrication and installation of the DC cables inside the Channel Tunnel and the underground AC cables on the UK side is allocated to Balfour Beatty / Prysmian; RTE will undertake the installation of the underground AC cables in France.

Jesse Norman, Minister for Industry and Energy: “’As a Government, we are strongly supportive of greater electricity trading with our European partners in order to lower household bills and deliver energy security as part of our modern industrial strategy. We’ve created the right environment for cooperative projects like ElecLink to attract investment and compete in the market without needing financial support from our tax and bill payers.”

Jacques Gounon, Chairman and Chief Executive Officer of Groupe Eurotunnel, said: “ElecLink further underlines how important the Channel Tunnel is to Britain and France. Not only is it a vital transport link, it is set to play an instrumental part in the supply of electricity to the UK, France and continental Europe. With the debate over the future of energy security brought into focus recently, ElecLink delivers a smart and environmentally friendly way to secure the electricity supply. We are proud to be inaugurating ElecLink this great project which will significantly benefit the economies and consumers in both France and the United Kingdom.”

The ElecLink interconnector is one of the most advanced new interconnection projects across Europe and the first of its kind between Britain and France since 1986, when the existing IFA (Interconnection France-Angleterre) interconnector was commissioned. It will use state of the art, tried and tested technology designed to achieve the highest possible standards of availability and reliability.

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Salaries of property professionals rise, but gender pay gap worsens

Salaries for property professionals remained robust in 2017, according to the latest survey by RICS & Macdonald & Company, but the gender pay gap has increased from last year.

  • Male property professionals earn, on average, £11,000 more than female counterparts (£7,000 in 2016)
  • Sector salary pay rises up 7.2% overall, above UK wage inflation
  • Average salaries down, but due to changing demographics of the survey

An evident gap

Male property professionals earn, on average, £11,113 more than their female colleagues (£54,931 versus £43,818). The gap is evident across the majority of age groups and is greatest for those aged 46–55, where the difference in average salary is 25.7%.

Encouragingly, the gender pay gap is now less evident in those starting out in property with females earning slightly more than males, a turnaround from last year where the pay gap was most evident in 18–22 year olds.

The survey indicates the attraction of property as a career choice. Of those who received a pay rise in 2017 in the industry, the average increase was 7.7% (up from 7.1% in 2016); this is far above UK-wage inflation, which sits at 2.7%. Considering the sample as a whole, the industry experienced an increase of +7.2% (6.5% in 2016), with 32% also believing that their pay and benefits will be positively affected by market conditions over the next 12 months.

The benefits of being qualified

Once again, the survey also shows the benefits of being professionally qualified. RICS professionals earn 40.6% more than those who are “not professionally qualified” — this has increased by 29.5% since 2016. Those with an FRICS designation earn 83.3% more than those who are not professionally qualified.

The survey recorded the average salary in 2017 as £52,362. While this is a 4.5% decrease compared to 2016, this may be largely explained by changes in the demographics of the survey this time around. Respondents with 10 years’ experience or fewer rose by 9% (from 31% to 40%), while those with 16 years’ experience or more fell 10% (from 56% to 46%).

Respondents working in Greater London continue to earn the highest average salary (£61,141) and command a premium of 15.5% over the South East, and 41.0% over Northern Ireland/Republic of Ireland. The majority of regions have seen a decrease, but East Anglia (+3.4%), South West/Wales (+2.6%) and Northern Ireland/Republic of Ireland (+1.4%) buck this trend with growth in average wages.

More positively, over half of respondents (53%) believe their organisation will increase headcount in 2017. 47% of respondents expect their organisation to modestly increase headcount, while 6% expect a significant increase in headcount in 2017.

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UK’s most polluted cities urge Prime Minister to act on air quality

Mayor of London, Sadiq Khan, and the leaders of the five UK cities worst affected by air pollution (Leeds, Derby, Southampton, Birmingham and Nottingham) have called on the Prime Minister to take urgent action to clean up the country’s toxic air.

Every year in Britain 40,000 people die early as a result of air pollution and research from London demonstrates the resulting health effects disproportionately impact the most deprived communities.

For the first time, Sadiq Khan and the leaders of Derby, Nottingham, Leeds, Birmingham and Southampton have written to Theresa May urgently calling for:

  • making vehicle manufacturers more accountable for emissions – with a zero-tolerance approach to malpractice, following the recent Volkswagen scandal;
  • national minimum emissions standards for private hire vehicles to ensure local requirements are not undermined;
  • greater regulation powers over the use of diesel generators;
  • a new 21st century Clean Air Act which will update existing legislation;
  • enshrining the ‘right to clean air’ in law after the UK leaves the European Union; and
  • unlocking new powers for local authorities, particularly regarding limiting construction and river emissions.

The letter describes the government’s current £3 million fund for local authorities to clean up their air as “woefully inadequate” and criticises the uncertainty around funding for transport schemes for preventing accurate and detailed planning in the long-term.

It also underlines the fact air pollution is not a problem local authorities can solve alone, they need government to devolve powerful fiscal incentives such as Vehicle Excise Duty and create a national diesel vehicle scrappage fund.

It comes as the government prepares to consult on a new national air quality plan to meet legal limits for nitrogen dioxide as soon as possible, following the recent High Court ruling against its previous plan.

The Mayor of London, Sadiq Khan, said “The quality of the air we breathe, both in London and in major cities across the UK, is killing thousands of people every year and is creating a national health emergency. As city leaders, we are doing what we can to tackle this problem, but the fact is we are fighting with one arm tied behind our backs and lasting progress will only be made if national government matches the ambitious action we are taking. The time for urgent action is now.”

Leader of Birmingham City Council, Councillor John Clancy, added “Air pollution is now a public health crisis in this country and we need real leadership from the Government. Our towns and cities are keen to tackle this issue but we must be given the tools and funding needed to secure the future health of our citizens. The time for action is now.”

The Mayor of London has proposed to implement a wide-ranging package of measures to clean up London’s air, including a £10 toxicity charge – or ‘T-charge’ – for the most polluting vehicles later this year.

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Strong start for construction in 2017 as housebuilding flourishes

The construction industry has started 2017 strongly, with an increase in activity levels as the value of new building contracts awarded in January reached £6 billion, spearheaded by strong figures from the housebuilding sector.

According to the latest edition of the Economic & Construction Market Review from industry analysts Barbour ABI, housing figures increased sharply across January, with construction contract value reaching £2.7 billion, a massive 83 per cent increase compared with January 2016.

Housebuilding

Of all the type of projects across housebuilding, it was private housing that dominated in January, with 91 per cent of the total construction contract value in January, compared to just 66 per cent a year ago. Market conditions for private housing were also favourable for housebuilders in 2016, with Crest Nicholson recently reporting a 27 per cent increase in full year profits.
There are also currently £5.8 billion worth of housebuilding contracts that are nearing award status, suggesting this month’s growth is likely to continue over the next few months and beyond.

London unsurprisingly led all regions based on total construction contract value in January, accounting for 26 per cent. This was helped greatly by the £900 million One Nine Elms Twin Towers development, the largest project recorded on the month.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “Whilst the housebuilding sector is performing admirably, we expect to see its growth continue to flourish across 2017. However, other sectors now need to start producing more auspicious figures, such as the commercial & retail sector, which saw a year-on-year decrease of 40 per cent last month. Infrastructure, another traditionally big performing sector, is also in a slump with January figures being the lowest for 12 months.”

“On the positive side, the number of projects awarded in January jumped by 50 per cent compared with December and 25 per cent when looking at January last year. These figures are encouraging and would suggest that work is most certainly on the way.”

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Offshore wind sector reaches record high

Activity in the offshore windfarm sector reached a record high in 2016, as the total construction value for projects reached £4.1 billion, increasing from £2.45 billion in 2015.

According to the latest data from construction industry analysts Barbour ABI, offshore windfarms alone accounted for 42 per cent of UK construction contract value in the utilities and power sector and 21 per cent of the entire infrastructure sector. This trend is likely to continue with the pipeline for future offshore wind developments looking healthy, with Barbour ABI reporting that £23.2 billion pounds worth of construction contract value is in planning.

Offshore

Three major projects that made a significant difference to the increase in construction contract value for offshore wind farms in 2016 were the Beatrice, Galloper and East Anglia one offshore wind farm projects, together worth a combined £3 billion pounds, which once constructed will produce over 1,600 MW of renewable energy per hour.

Commenting on the figures, Michael Dall, lead economist at Barbour ABI, said: “Back in 2013 offshore windfarms accounted for only 7.5 per cent of the annual construction value for the utilities and power sector, which increased to 42 per cent in 2016, on the back of significant investment in this type of project.

“With reports showing that the cost of producing electricity in this way have fallen significantly, the increase in construction value makes sense.”

“We have also seen a large uptake in the planning pipeline for future offshore windfarms with £23.2 billion worth of construction planned over the coming years, suggesting this burgeoning sector will continue to expand in 2017 and beyond.

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RIBA reveal what UK architects really think about Brexit

Results from the most comprehensive post-referendum survey of architects have been published by the Royal Institute of British Architects (RIBA). The RIBA Members Brexit Survey results give an insight into the major concerns and opportunities from architects across the industry.

  • 60% of architects have seen projects delayed, cancelled or scaled back
  • 40% of UK-based non-British EU nationals are now considering leaving the country
  • Architects think Brexit offers chance of wholescale reform of the UK’s inefficient public procurement system
  • Strong support amongst architects to maintain high product and environmental standards and ensure that UK architects’ qualifications continue to be recognised in the EU and are in future recognised in other key markets too.

Over 65% of architects are concerned about the impact of Brexit on their business and any uncertainty is unsettling. However, as agile and business-savvy professionals, architects have been quick to see the potential industry benefits from the UK exiting the European Union. From trade agreements with new markets, reform of the UK’s public procurement system and increased public sector and private sector investment, our members have made it clear that with the right decisions the short-term impacts of Brexit can be mitigated, and the UK can position itself as a global facing nation.

In response to the concerns and opportunities raised by its chartered members, RIBA has today published a set of five priority recommendations for Government: Global by Design: How the government can open up new opportunities for UK architects. In order to maintain and strengthen the UK as a global hub for architecture, the Government must ensure the UK:

  • Has access to the best talent and skills
  • Signs trade agreements that open access to foreign markets
  • Provides support for education, research and innovation
  • Takes action to address the UK’s competitiveness crisis including infrastructure investment
  • Maintains common standards and low compliance costs.

RIBA President Jane Duncan said “Architects recognise that the UK must shape a new role for itself after we exit the EU – and we are already responding to that challenge. But we need leadership and support from the Government if the UK is going to maintain and strengthen its role as a global centre for architecture, responsible for innovative and inspiring buildings in the UK and across the world.

“To do that we need the Government to secure the agreements that ensure that our qualifications continue to be recognised in the EU and increasing access to new markets outside of the EU, maintain high common product and environmental standards consistent with brand UK abroad and address the structural challenges that threaten the UK’s attractiveness as a place to live, work and invest.”

“I’m pleased that the Government’s Brexit White Paper highlights a number of the key issues that we’ve been raising with ministers, but there is still a long way to go – particularly on the issue of who can work here. We can’t shut our doors to talent and expect the world to open its markets to us. The UK needs an immigration system that recognises the benefits and importance of the UK being an attractive place to work for ambitious architects from around the world. It’s vitally important that the Government acts to confirm that those already working and studying in the UK will be able to remain.”

The RIBA Members Brexit Survey report and the RIBA’s Brexit recommendations, Global by design: How the government can open up new opportunities for UK architects, can be viewed at www.architecture.com/brexit.
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VIDEO: Quintain’s plans for Wembley

With funding and planning secured, construction at Wembley Park will be at a pace not seen at any other major development site, with 5,000 homes under construction over the next 7 years.

Wembley Park will be the largest single-site purpose built PRS (private rental sector) development anywhere in the UK after Quintain announced its intention to deliver the remaining private homes at Wembley Park as build to rent. 5,000 homes for rent will be available at Wembley Park, all under Quintain’s ownership, and will be delivered in phases over the next seven years.

By the end of 2017, there will be 3,000 homes under construction, alongside a new seven acre public park, a new landscaped London square, a three-form entry primary school and a wide range of shops, restaurants and workspaces to complement the existing Wembley Park shopping and entertainment offering. Quintain’s next Tipi apartment building will be available for occupation this summer.

Quintain has already invested £900 million in the transformation of Wembley Park and has a further £800 million of funding secured, with planning permission in place. It is expected that on completion, Wembley Park will have created over 8,500 permanent new jobs across a range of sectors, in addition to the jobs created during construction.

Angus Dodd, Chief Executive of Quintain, said “Our commitment to build to rent at Wembley Park means we can deliver the homes London needs far faster than if we were selling homes privately and ensures they will be occupied very shortly after they are complete.

“This long term commitment also means we can design homes specifically for the needs of today’s generation of renters and provide fantastic shared facilities and professional management arrangements which our residents love. We will ensure no apartment is left empty.”

Sadiq Khan, Mayor of London, added “This development will provide 5,000 much-needed private rented homes for Londoners. It will take time to fix the housing crisis, but at City Hall we are committed to help deliver schemes like this that will increase the supply of homes across the capital.”

Build-to-rent can help fix ‘broken housing industry’

A new report, produced by the British Property Federation (BPF) and Savills in conjunction with the London School of Economics, proposes that the purpose-built rental sector could deliver as many as 240,000 new homes by 2030.

If, for example, just one fifth of the large residential sites currently being built on incorporated build-to-rent, it could increase annual home delivery by 6%. Put into context, this is around 10,000 new homes a year relative to the 164,000 new homes completed in England in 2015/16.

In conjunction with the supply already set for delivery over the next three years, it would take total build-to-rent output to 15,000 new units a year, and to 240,000 over the next 13 years.

Ian Fletcher, Director of Policy at BPF, explained “By measuring build-to-rent’s growth and the other benefits it delivers, and what gets in its way, we want to show to government the sector can be an important partner to its ambitions to build more homes.”

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Offsite construction expected to feature in Housing White Paper

Communities Secretary Sajid Javid will set out the details of the housing White Paper in a statement to MPs today. The Minister admitted that the current market is “broken” and if we are to fix it we need to consider modern methods of construction such as offsite and modular.

Javid’s speech intends to highlight the need for more homes (at least 250,000 new homes each year) as a matter of priority. Over the weekend Housing Minister Gavin Barwell admitted that the government were currently behind schedule on its goal of building one million new homes in England by 2020.

When unveiling the paper, Javid will say: “Walk down your local high street today and there’s one sight you’re almost certain to see. Young people, faces pressed against the estate agent’s window, trying and failing to find a home they can afford.

“With prices continuing to skyrocket, if we don’t act now, a whole generation could be left behind. We need to do better, and that means tackling the failures at every point in the system.

“The housing market in this country is broken and the solution means building many more houses in the places that people want to live.”

In an interview with BBC Radio 4, the Communities Secretary also indicated the need for a shift in focus on increasing home ownership, an ambition of most post-war Conservative governments. He said “It is a false choice. The reality is we need more homes, whether to rent or buy.”

The White Paper is expected to contain the following measures for meeting demand:

  • A £3bn fund will allow housing associations and councils to fully utilise the skills and facilities of smaller building firms, including support for modern methods of construction, such as modular and offsite
  • Councils will be required to provide the government with an up-to-date plan for housing demand
  • The delivery time for housing will reduced from three to two years between planning permission being submitted and construction works beginning
  • Green Belt is expected to be protected, only to be built on in exceptional circumstances
More on this following the release of the paper later today.
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Government needs to take note of worsening construction skills shortage now, warn industry experts

The skills shortage in the construction industry has got worse and has now spread beyond bricklayers and carpenters to other key trades, according to recent research by the Federation of Master Builders (FMB).

The FMB’s State of Trade Survey for Q4 2016 shows that:

  • Almost half of construction SMEs are reporting difficulties hiring roofers (46%)
    Shortages of electricians and plasterers are at their highest point in four years
    The SME construction sector has experienced fifteen consecutive quarters of growth.

Brian Berry, Chief Executive of the FMB, said “We’ve been experiencing a severe shortage of bricklayers and carpenters for quite some time – these latest statistics show that skills shortages are now seeping into other key trades such as roofers and plumbers. Indeed, of the 15 key trades and occupations we monitor, 40% show skills shortages at their highest point since we started to feel the effects of the skills crisis in 2013 when the industry bounced back post-downturn. This growing skills deficit is driving up costs for small firms and simultaneously adding to the pressure being felt by soaring material prices linked to the weaker pound.

“The Government needs to be taking note of the worsening construction skills shortage now that we know that the UK will be negotiating a hard Brexit. The Prime Minister must ensure that the immigration system that replaces the free movement of people serves key sectors such as construction and house building. Our sector relies heavily on skilled labour from the EU, with 12% of the British construction workforce being of non-UK origin. As the construction industry represents around 7% of UK GDP, it’s in no one’s interest to pull the rug out from under the sector by introducing an inflexible and unresponsive immigration system.

“On a more positive note, construction SMEs reported steady growth in the final three months of 2016, capping off a generally positive year for the industry. In particular, demand for private refurbishment work was robust throughout 2016 and in terms of private and social house building, builders expect workloads to grow in the first three months of 2017. However, if the Government wants the objectives of its Housing White Paper to be realised, it will need to ensure the construction sector has the skilled workers it needs to build these new homes.”

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Expectations for construction workloads regain lost ground

Expectations across the construction sector have now regained the ground lost post the EU vote, according to the latest Royal Institution of Chartered Surveyors (RICS) Construction Market Survey, Q4 2016.

  • National workloads still positive with the private housing displaying strongest momentum
    Road and rail set to be the fastest growing infrastructure sectors over next twelve months
    Expectations for workloads, employment and profit margins improve

An overview

Following a noticeable dip around the time of the EU referendum, expectations for output growth over the year to come strengthened for the second consecutive report. Indeed, the twelve month workloads expectations series improved to post a reading of +57% (following +49% and +23% in Q3 and Q2 respectively).

Alongside this, employment expectations improved for the second straight report, with 41% more respondents anticipating a rise in construction sector employment over the year to come. As such, both employment and workload expectations have now recovered to their pre-referendum levels.
The latest results point to modest growth across the sector in the final quarter of 2016, with 18% more respondents reporting an increase in total workloads. However, while the data is broadly positive, the anecdotal comments left by chartered surveyors do continue to highlight uncertainty surrounding the departure from the EU to be dampening investment and activity.

During Q4, output increased in most sub sectors except public non-housing. Following the pattern of the last three quarters, the strongest quarterly rise in workloads was reported in the private housing sector. 27% more respondents cited an increase in private housing workloads (rather than a decrease). A rise in workloads was also reported in the private commercial and infrastructure sectors.

Meanwhile, both output and input costs rose in Q4 2016 with input prices extending a run of uninterrupted growth stretching back to Q2 2010.

Forthcoming

Over the next twelve months, respondents continue to expect the road and rail sub categories of infrastructure to post the most significant increases in construction output at the national level. Regionally, expectations for growth in railway output lead the way in London, the North West, Yorkshire & Humberside, Wales and the West Midlands. Meanwhile, expectations for growth in road construction activity come out on top in all other areas of the UK.
Skill shortages continue to be a key impediment to growth in the sector, although they have eased in five consecutive reports. Interestingly however, the one area that remains a particular concern is the shortage of quantity surveyors with 66% of respondents highlighting a gap. This is the highest figure since 2008.

Jeremy Blackburn, RICS Head of Policy said “Many firms are currently having to bring construction professionals in from outside the UK. The lack of quantity surveyors consistently apparent in our survey is also underscored by the fact that, at the moment, under the government’s Shortage Occupation List, it is easier to employ a ballet dancer than a quantity surveyor.

“Even if we were to reverse this and also ensure that through Brexit we maintain access to EU workforce, we would still have a domestic shortfall of skills. The Industrial Strategy is a golden opportunity to align education, training and employer work paths – along with modern methods of construction – to ensure we have the skilled workforce to meet our building targets.”

Simon Rubinsohn, RICS Chief Economist, added “The latest results suggest that the construction sector has shrugged off concerns about the effect of Brexit with key workload indicators remaining firm around the country. Indeed, feedback regarding the outlook over the next twelve months is now rosier than it was back in the autumn with more building anticipated as 2017 unfolds.

“That said, there remains some unease about access to skilled labour in the emerging new world and financial constraints still remain a major challenge for many businesses. And significantly, we are being told that a shortage of quantity surveyors is impacting on the development process at the present time.”

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