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.

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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VIDEO: Crossrail’s quarterly update

Crossrail have released the latest video in their “Moving Ahead” series, which is issued four times a year to inform of how much progress has so far been made on what has been described as Europe’s largest construction project.

Construction work on Crossrail began in May 2009. Once completed, the Crossrail route will run over 100km from Reading and Heathrow in the west, through new tunnels under central London to Shenfield and Abbey Wood in the east.

Crossrail is considered to be among the most significant infrastructure projects ever undertaken in the UK. From improving journey times across London, to easing congestion and offering better connections, Crossrail say that their project will change the way people travel around the capital.

The total funding envelope made available to deliver Crossrail was a staggering £14.8bn, however, the new railway is expected support regeneration across the capital and add an estimated £42bn to the economy of the UK.

Watch the latest update below:

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Tougher building regulations required to protect future communities

We must stop building houses that are simply not covered or prepared for future flood events, warns Know Your Flood Risk’s Mary Dhonau OBE.

With the Environment, Food and Rural Affairs Committee’s (Efra) this week criticising Government for “missing opportunities to act on” Efra’s Future Flood Prevention report that was published in November, Mary Dhonau OBE, chief executive of the Know Your Flood Risk campaign has publicly responded to urge Government to “toughen up on building regulations” so that flood resilient measures are automatically included in all new-build properties that are deemed to be within a flood risk zone.

Following Efra’s formal response on what it calls a “disjointed flood management system”, Mary Dhonau said: “I think it is now a matter of urgency that the Government toughens up on its planning and building regulation processes to make sure that any new builds located in ‘at risk’ areas automatically include measures to make the property flood resilient.

My concern is that Flood Regulation does not cover new build properties and therefore we must stop building houses that are simply not covered or prepared for future flood events; it’s not fair on the future generations who will have to deal with the dreadful aftermath that flood waters bring.”

Landmark Information, the data partner for the Know Your Flood Risk campaign, has undertaken some cross-analysis of flood risk data from the Environment Agency (EA), Natural Resources Wales (NRW) and planning application data from Barbour ABI to determine the percentage of planning applications for new build properties (residential and commercial) that are deemed to be within an EA/NRW Flood Zone 3 (assessing sea or river flooding only), by county.

Between September 2015 and September 2016, 9 out of 10 new build applications in the City of Kingston upon Hull were deemed to be within an EA/NRW Flood Zone 3. This is followed by Thurrock in Essex at 48%, Casnewydd-Newport at 37% and North Somerset at 32%.

Adds Mary Dhonau: “Having reviewed the data analysis from Landmark, it is clear that there are hundreds of applications submitted each year that fall in to a designated flood risk zone according to the Environment Agency and Natural Resources Wales’ parameters. These stats don’t even take into account groundwater or surface water risks and so I fear the volume is greater still. I therefore agree with Efra’s call to Government to create far stronger planning rules, and penalties for those that breach them, to ensure future communities are not blighted by today’s failure to act.”

The Know Your Flood Risk Campaign’s mission is to raise awareness of the risk of flooding from all sources. It is a well-regarded online resource for helping people find out the flood risk related to their current or future home and provides access to free-to-download information guides and a smartphone app.

To download a free copy of the Homeowners’ Guide to Flood Resilience or the new supplement for businesses, visit www.knowyourfloodrisk.co.uk. For more information, follow the Know Your Flood Risk campaign on Twitter. For more information regarding Landmark Information Group, visit www.landmark.co.uk.

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Investment demand in UK commercial property continues to rebound post-EU vote

The rebound in investment demand continues post-EU referendum, according to the Q4 RICS UK Commercial Market Survey 2016.

Despite some concern surrounding potential relocation of companies based in the UK, demand from overseas buyers was up notably across all areas of the market in Q4 2016. Demand increased for a second straight quarter with the growth in enquiries gaining momentum, as 21% more respondents saw a rise in demand in Q4 up from 9% more in Q3.

Foreign investment also saw a rebound, with the weaker exchange rate likely an important factor. 20% more respondents saw a rise in demand in foreign investment enquiries up from 7% more seeing a rise in Q3 (this reading has recovered significantly from -27% in Q2 2016).

At the same time, the supply of property for investment purposes fell in both the office and industrial sectors, but was broadly unchanged in the retail segment.

London investment trends

Investment trends in the capital remain mixed. Industrial assets attracted a solid rise in investor interest during Q4 but overall enquiries were flat in the office sector and declined modestly in the retail segment. That said, foreign investment demand did in fact grow strongly across each sector of the capital, with the sharp decline in sterling since June particularly prominent in enticing overseas demand. Nevertheless, having stabilised during Q3, all-sector capital value expectations slipped back into negative territory in London.

Rises predicted in capital values

Back at the national level, near term capital value expectations remained mildly positive across all sectors in Q4, with 14% more respondents projecting values to rise (rather than fall) over the coming quarter. Over the next twelve months, respondents anticipate capital values will increase across the majority of sectors, led by the prime industrial market. In terms of the headline picture, 28% more respondents expect to see a rise rather than fall in capital value over the next 12 months.

Occupier demand

Occupier demand is less buoyant than that from investors, with demand increasing only modestly at the all-sector level. However, this was driven entirely by industrial property with demand flat in both office and retail sectors. The lack of demand prompted landlords to increase the value of incentive packages on offer to prospective tenants in both these sectors. In the office sector, inducements have now risen in each of the last two quarters at the headline level (the first time this has happened since 2013) with 14% more respondents seeing a rise in Q4 2016.

Lack of availability

On the supply side, a lack of availability continues to be a key feature of the industrial occupier market with a net balance of 32% of respondents reporting a further decline in leasable space during Q4. Industrial supply, in net balance terms, has now fallen in eighteen successive quarters. As a consequence, near-term rent expectations in the industrial sector have been pushed higher and are now pointing to strong growth, with 30% more respondents envisaging a rise in industrial rents in the coming three months. In comparison, only very marginal gains are expected across office space and modest declines are now anticipated for retail sector rents.

Simon Rubinsohn, RICS Chief Economist said “The results for the Q4 survey suggest that the commercial property market is continuing to attract investor interest despite ongoing concerns about pricing in the capital and the prospects for the economy more generally. Indeed, the feedback we have received is consistent with a renewed appetite from overseas buyers for UK assets.

“Meanwhile the results for the occupier market highlight the resilience of the economy in the wake of the vote to leave the EU, but also clearly demonstrate the demand for large warehouses to support the development of the distribution industry as consumers increasing go online to make their purchases.”

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Trump expected to give the order to begin constructing wall today

The new President of the United States Donald Trump is expected to give the order to begin works on building his controversial wall between the US and Mexico today. Buildingspecifier investigates:

Mr Trump is visiting the Department of Homeland Security today, purportedly to order federal funds to be allocated towards the building of the giant wall in question. Yesterday he tweeted:

How big will it be?

Reports of how big the wall will actually be vary, but the length of the border itself is around 1,900 miles in total. Trump himself has said that the wall will cover roughly 1,000 miles, with natural obstacles protecting the remainder of the distance.

In comparison, the Berlin Wall was 96 miles long and the Great Wall of China is 13,000 miles long.

How much will it cost?

There is already some fencing in place between the borders, which cost approximately $2.4 billion to build. Reoports estimate that to building the rest of it would cost between $15-$25bn. THEN there’s maintenance, which is expected to run up to a whopping $700m per annum, according to deputy director of the US Immigration Policy Program at the nonpartisan Migration Policy Institute, Marc Rosenblum.

After offending their neighboring country with racial slurs such as “When Mexico sends its people, they’re not sending their best… They’re sending people that have lots of problems, and they’re bringing those problems with us. They’re bringing drugs. They’re bringing crime. They’re rapists. And some, I assume, are good people”, Donald Trump added further salt to the wound by insisting that Mexico would foot the bill for the construction of his ludicrous wall.

Mexico have repeatedly insisted that they will do no such thing, forcing the President to find alternative methods of payment. Earlier this month, he announced that the wall would instead be paid for initially with a congressionally approved spending bill, which would eventually be reimbursed by Mexico. He has yet to explain how he intends to make that happen.

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