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North Ayrshire Council expands house build scheme

North Ayrshire Council is expanding its ambitious masterplan to build hundreds of new council houses.

The newly-approved Strategic Housing Investment Plan (SHIP) will secure investment in a total of 1,695 properties across North Ayrshire over the period 2020-2025, working alongside Registered Social Landlords.

The plan includes a commitment for more new-build homes on top of the council’s already ambitious proposals as well providing a catalyst for the regeneration of towns and communities across the area.

Yvonne Baulk, Head of Service (Physical Environment), said: “We already have one of the biggest council house building projects in the UK and our new Strategic Housing Investment Plan really underlines that commitment to provide modern, affordable homes for our residents.

“Our ambitious house-building programme has delivered 345 news homes so far and, by 2025, we will have built 1,575 high-quality, new council homes, with the Registered Social Landlords adding to that total.

“These new homes will be built in every single part of North Ayrshire, from Irvine to the Garnock Valley, from the North Coast to the Three Towns, and even on our islands of Cumbrae and Arran.

“This is all part of our transformational ambitions for North Ayrshire. Major construction projects like this are crucial in our drive to regenerate our towns and will also secure new and existing jobs and training opportunities for North Ayrshire businesses and residents.”

By Adam Todd

Source: Ardrossan Herald

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Bexley is home to the lowest level of new homes in capital

The London borough of Bexley is in the most need of new build housing stock out of any borough in London, research from Stone Real Estate has found.

Stone Real Estate looked at what proportion of homes listed on the major property portals were new build as a percentage of all stock listed, as well as the boroughs with highest demand based on the largest number of new build properties already listed as sold.

With just 2.5% of all stock currently listed as new builds, Bexley is home to the lowest level of new homes in the capital.

Other boroughs to rank with some of the lowest levels of new build stock are Redbridge (3.1%), Kensington and Chelsea (4%), Waltham Forest (4.2%) and Richmond (4.3%).

The City of London is home to the highest level of new homes with 29.9% of all stock listed for sale falling into the category. Tower Hamlets also ranks high at 23.6%, with Hackney (19.8%), Newham (15.9%) and Lambeth (14.7%) home to a good amount of new build stock.

The only borough to see a higher level of homebuyer demand for new build homes is Bromley with 40% of all new build homes already listed as sold. Sutton (30.2%), Kingston (26.9%) and Waltham Forest (26.8%) were also home to a large appetite for new builds.

While the City of London is home to the largest proportion of new build stock, it’s also home to the lowest level of new build homebuyer demand, with just 3.4% of all new builds listed marked as sold.

Michael Stone, founder and CEO of Stone Real Estate, said: “There’s no denying that we are in desperate need of more housing across the capital and a large proportion of that needs to be affordable, a factor that can often be overlooked when trying to balance the books.

“While house building is a complex task and certainly can’t be done overnight, the data does suggest that perhaps some of our new build efforts across the capital have been poorly targeted and in fact, some of the areas with the lowest level of new homes are the areas where buyers are crying out for them.

“It really is vital that we address the current housing crisis but we do so in a sensible manner to ensure that what we are building is available to those that need it, and doesn’t spend months languishing on the portals due to an unobtainable price tag, or a lack of buyer appetite.”

Westminster was the second-lowest at 7.7% and again, while Hackney and Tower Hamlets are home to some of the highest levels of new build stock, they also ranked low for buyer demand at 8.3% and 8.9% respectively.

By Ryan Fowler

Source: Mortgage Introducer

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Build-to-rent sector up 20% in Q3

The build-to-rent sector grew by 20% year-on-year to 148,000 homes in Q3, research from the British Property Federation (BPF) has revealed.

This includes all build-to-rent homes completed, under construction or in planning across the UK.

The number of units in planning has increased by 23% alone to 77,446.

The average size of build-to-rent developments is also growing.

In Q3 2019, the average size of each completed build-to-rent scheme was 133 units, this increases to 245 units for the schemes under construction, while the average size of schemes in the planning system is higher still at 325 units.

Geographically, growth of the sector is spread evenly between London and the regions, with both areas seeing total growth of 20%.

The number of build-to-rent units inside the capital and in the regions is also similar at 63,200 and 60,337 respectively.

However, in terms of units completed the regions saw the biggest increase, with a significant rise of 41% over the year to Q3 2019.

Ian Fletcher, director of real estate policy at the British Property Federation, said: “The build-to-rent sector continues to attract investment and deliver much needed homes.

“Not only do we have an impressive 31% growth in completions between Q3 2018 and Q3 2019, but the pipeline of new projects is also strengthening.

“Right across the country we are seeing growth in the sector, allowing people to access high quality, institutionally-managed rental properties.

“With both Labour and the Conservatives prioritising house building during their recent party conferences, our data shows build-to-rent is making an important contribution to housing delivery and often on difficult to develop and large urban sites.”

Jacqui Daly, director of Savills Residential Research who conducted the research for the BPF, added: “As individual households increasingly cannot afford to access the housing market, particularly once help to buy is withdrawn, so demand for the quality rented homes the sector provides will rise.

“Built-to-rent already makes a significant contribution to housing delivery, and we project this will increase to one in five new homes as more and more people rely on renting.

“This will change the housebuilder model, with bulk sales to investors growing their share of housing delivery.

“In our opinion, in 10 years, the customer lists of housebuilders will see pension funds and life insurers alongside first-time buyers and second steppers.

“Rather than shouldering the full burden of risk, housebuilders will act as master contractors, forging long-term partnerships with landowners and investors.”

By Ryan Fowler

Source: Mortgage Introducer

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Housing minister announces £38m for modular houses across England

Housing minister Esther McVey has said she wants a green housing “revolution” in the North of England composed of hi-tech, prefabricated, modular houses.

Modular housing involves building the majority of a property in a factory beforehand, allowing for mass production and for the main structure to be transported in one go to the site and fitted into place.

Backers of prefab construction point to the need for less construction traffic and the need to address the sector’s ageing core workforce, which is currently being topped up by migrant workers.

She has announced £38m for the initiative, but Labour has criticised it noting that only two of the councils benefiting from the extra cash are situated above the Watford Gap, the theoretical divide that separates the north and south of England.

Hull City Council and Cheshire West and Chester Council will take a slice of the funding, along with North Somerset Council and Bristol City Council in the south west, and Bournemouth, Christchurch and Poole Council and Hastings Borough Council on the south coast.

The money will help with the construction of 2,072 homes and McVey used a speech in Sheffield to say she believes the industry could be worth £40bn post-Brexit and become Britain’s hi-tech manufacturing answer to Silicon Valley.

Of the potential in the north of England she said: “We must invest in this new technology. It’s as simple as that. The benefits are clear. Some modular homes can be built in a factory over a week. And assembled on site in a day.

“Industry has told us some homes built using modern methods can have 80 per cent fewer defects and heating bills up to 70 per cent lower.

“Homes built using modern methods can be of higher quality, greener and built to last. I want to see a housing green revolution. In the north of England where the first industrial revolution began.”

The deals are the latest to be awarded through the government’s £350m Local Authority Accelerated Construction programme, which was launched to accelerate the delivery of local authority housing schemes.

Labour’s shadow housing minister John Healey said McVey had “been caught out” during the announcement.

“The Tories’ pathetic housing proposals have nothing to offer the north of England,” said the Opposition frontbencher.

“The Housing Minister has been caught out making promises to the north, but then giving most of this paltry pot of cash to areas in the south.”

Critics of the new housing tech say smaller suppliers are overlooked in the process and imported materials are favoured, whereas traditionally constructed homes contain 80 per cent of UK-produced materials.

Mike Leonard, from Building Alliance, said modular houses would last for only half the time of a masonry-built home – approximately 60 years – and were “fire prone” given their timber structures.

“They are not designed to last. To put it bluntly, they are caravans without wheels,” he said.

By Jack Loughran

Source: E&T

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Number of new builds registered in England and Wales up almost 8%

There was a 7.9% increase in new builds submitted with the Land Registry for registration in England and Wales in August this year compared to the same month in 2018, official data shows.

Of the 93,574 sales received for registration in August 2019 some 72,806 were freehold, a 4.5% decrease on August 2018, and 12,411 were newly built, a 7.9% increase on August 2018.

The number of detached properties registered reached 22,213, up from the 21,968 recorded in July and 18,523 in June. Semi-detached were the most popular with 25,283 registered in August, up from 24,848 in July and 21,623 in June.

But terraced homes were equally popular with 25,244 registered in August, up from 25,115 registered in July, but this was down on the 21,721 registered in June, the data also shows.

There were 15,565 flats and maisonettes registered in August, down from the 15,915 registered in July but up from the 14,393 registered in June.

The most expensive residential property sold in August was in the City of Westminster for £16.5 million while the cheapest residential property sold in August was in Sunderland for £18,500.

The most expensive commercial sale taking place in August 2019 was in Southwark for £129.3 million and the cheapest commercial sale was in St. Helens for £105.

There were 743 residential properties in England and Wales for £1 million and over registered, of which 410 were in Greater London, five in the West Midlands, six in Greater Manchester and one in Wales.

Source: Property Wire

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UK Construction Industry in Sharp Slump

UK construction firms saw another tough month in September, according to the latest IHS Markit Construction PMI, which fell to its lowest level since April 2009 on Wednesday after activity fell at its second fastest pace for a decade last month and suggests the sector is in danger of another brush with recession.

The IHS Markit Construction PMI came in at 43.3 for September, down from 45.0 previously and when markets had been looking for no change. This marked the third consecutive decline for the index, which has zig-zagged lower ever since topping out at 55.8 in July 2018. It comes after commercial, civil engineering and residential construction firms all suffered in September.

Commercial firms were again the weakest link, with many suffering due to client hesitancy, which is said to be the result of the Brexit process. Civil engineering activity was reported sharply lower while housebuilders, long the star of the UK construction show given the home supply and demand disparity, saw their fourth consecutive decrease in building. Input costs rose due to higher charges for fuel and some raw materials while employment across the sector fell at its fastest pace since the end of 2010.

“Falling demand from investors and brutal, margin-slashing competition among contractors have sent confidence skittling. Many contractors are now fighting on two fronts, and are being squeezed by rising input costs just as new orders fall sharply,” says Gareth Belsham, director of national property consultancy and surveyors Naismiths. “Britain’s construction sector has become adept at riding out both feast and famine. But even by its volatile standards, the rapid slowdown in demand is causing concern.”

PMI surveys measure changes in industry activity by asking respondents to rate conditions for new orders, production, hiring intentions, prices and inventories. A number above 50.0 indicates industry expansion while a number below 50 is suggestive of contraction. The survey results often correlate with official measures of output, although they can often be wide of the mark too.

The UK construction industry has struggled since the June 2016 Brexit referendum, which has hit the commercial construction sector particularly hard, leading the industry to fall into recession in 2017. Output contracted for three consecutive quarters that year before seeing only a tepid and short-lived recovery in 2018, which has since unwound as the Brexit saga rolls. But the under-the-cosh industry is also now having to cope with the impact that an uncertain global economic backdrop is having on clients.

“The downturn in the construction sector is continuing to worsen, with the risk of a no-deal Brexit largely to blame. The PMI is consistent with construction output falling by about 2.0% in Q3, building on Q2’s 1.2% decline,” says Samuel Tombs, chief UK economist at Pantheon Macroeconomics. “The construction sector could revive quickly if the risk of a no-deal Brexit subsides; in aggregate, the corporate sector has ample cash reserves.”

Tombs, who’s been rated one of the UK’s top forecasters by Bloomberg and Reuters, says the housing market could soon experience a revival because of a decline in the cost of borrowing, which is now feeding through into lower mortgage rates. However, his forecasts suggest the overall construction sector has now seen two consecutive quarters of decline, which is enough to return it to recession at a time when the broader economy is also weak.

UK GDP growth was 0.3% in July, up from 0% previously and marking a strong start to the third quarter for an economy that shrank by 0.2% in the three months to the end of June. The earlier result had seen economists fret about the prospect of a technical recession, which is defined as two consecutive quarters of contraction, although the probability of that happening is now tipped as low.

“We’re revising down our forecast for quarteron-quarter GDP growth in Q3 to 0.3%, from 0.4%, in response to signs that the rebound in industrial production is shaping up to be smaller than we had anticipated. Nonetheless, our forecast still exceeds the MPC’s 0.2% expectation and likely would be sufficiently strong to persuade the Committee that lower interest rates are not warranted,” Tombs wrote, in a recent note to clients.

The UK economy has slowed in recent years amid elevated inflation that’s at times crimped consumer purchasing power, slowing business investment and more recently, a global economic slowdown that’s put the German economy on the door of recession and left the Eurozone at risk of stagnation. Amid that latter slowdown, central banks the world over have rushed to support their economies with lower interest rates and other assistance measures, although the Bank of England (BoE) is yet to follow suit.

Written by James Skinner

Source: Pound Sterling Live

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Supply of new housing increases by 15% in 2018-19

Total new housing supply in Scotland (new builds, refurbishments and conversions) increased by 15% in 2018-19, to 22,273 new housing units, or 2,953 more homes than the previous year, the sixth consecutive annual increase in total housing supply, and the highest annual figure since 2008-09.

Two sets of housing statistics have been released today by Scotland’s Chief Statistician. The Annual Housing Statistics update includes information on total new housing supply in Scotland across all sectors to end March 2019, and on stock by tenure estimates up to end of March 2018, along with information on various elements of local authority housing in 2018-19 such as stock, lettings, house sales, evictions, housing lists, and housing for older people and people with disabilities.

The Quarterly Housing Statistics update includes latest quarterly information on new build housing and affordable housing supply. The affordable housing supply statistics are used to inform the Scottish Government target to deliver 50,000 affordable homes, including 35,000 homes for social rent, over the period 2016-17 to 2020-21, and reflect the number of affordable homes delivered that have received some form of government support through loans, grant or guarantees. A new section has been added that compares how the level of affordable housing supply per head of population varies between Scotland and other UK countries, to help meet demand for cross country analysis on this.

Key findings from the Annual Housing statistics update:

New housing supply: New housing supply (new build, refurbishment and net conversions) increased by 15% between 2017-18 and 2018-19, from 19,320 to 22,273 new homes.

Housing supply figures include private-led and social sector new builds, as well as conversions and rehabilitations. Housing association new builds increased by 1,041 homes (33%) and private-led new builds increased by 2,679 homes (21%), whilst local authority new builds decreased by 51 homes (3%), refurbishments decreased by 642 homes (67%) and net conversions decreased by 74 homes (10%).

New house building: In 2018-19, 21,292 new build homes were completed in Scotland, an increase of 3,669 homes (21%) on the 17,623 completions in the previous year, the sixth consecutive annual increase and the highest annual number of completions since 2007-08. During the same time-period the number of homes started increased by 3,160 homes (16%) from 19,604 to 22,764.

Affordable housing: (As previously reported on 11 June 2019): In 2018-19, there were 9,554 units completed through all Affordable Housing Supply Programme (AHSP) activity, an increase of 994 units (12%) on the previous year. Approvals decreased by 547 units (5%) in the latest year to 11,130 in 2018-19, and starts increased by 303 units (3%) to reach 10,872. This activity represents the first three years in the target period to build 50,000 affordable homes, including 35,000 for social rent, over the five year period from 2016-17 to 2020-21.

Stock by tenure: As at 31st March 2018, there were an estimated 2.6 million dwellings in Scotland, an increase of 1% (20,000 dwellings) compared to 2017. The number of owner occupier households increased by an estimated 3%, and the number of housing association homes increased by 1%, whilst the number of local authority homes showed little change year on year (0%), and the number of dwellings rented privately (including with a job/business or rent-free) decreased by an estimated 6%.

Sales of local authority dwellings (Right to Buy): Sales of public authority dwellings (including local authorities with total stock transfers) fell by 96% between 2017-18 and 2018-19, to 76. This decrease follows the Right to Buy scheme closing to all new applicants in July 2016. It is expected that sales will continue to fall further in the next year as the number of applications remaining in the system falls closer to zero:

Local authority housing stock: At 31 March 2018, there were 315,625 local authority dwellings in Scotland, an increase of 1,192 units (0.4%) from the previous year, and the first annual increase in local authority stock seen in this time series since 1980.

Vacant stock: Local authorities reported 7,409 units of vacant stock at 31 March 2019, 269 units more than the 7,140 vacant units in the previous year. There were increases in units awaiting demolition (an increase of 141 units), and vacant normal letting stock (an increase of 171 units), with vacant units used as temporary accommodation for the homeless and vacant units in low demand areas showing similar totals to the previous year, and vacant units as part of a modernisation programme falling by 55 units.

Lettings: During 2018-19 there were 26,455 permanent lettings made, an increase of 789 units (3%) compared to 25,666 lettings in the previous year. There were 10,952 lets to homeless households in 2018-19, which equates to 41% of all permanent lets by local authorities.

Evictions: Eviction actions against local authority tenants resulted in 1,440 evictions or abandoned dwellings in 2018-19 (1,007 evictions, 433 abandoned dwellings). This is down 1%, or 20 actions of evictions or abandonments, on the 1,460 in the previous year.

Housing Lists: Household applications held on local authority or common housing register lists increased by 0.4% or 633 households to 158,439 at March 2019, the first annual increase since 2008, although the latest figure is 22% below the 202,235 applications recorded in 2008.

Scheme of assistance: There were 8,655 scheme of assistance grants paid to householders in 2018-19, 394 grants (4%) fewer than in 2017-18. Spend on scheme of assistance grants totalled £28.6 million, around £1.1 million less than in 2017-18. The majority of grants in 2018-19 were for disabled adaptions; 5,458 grants totalling £21.8 million.

Key findings from the Quarterly Housing statistics update to end June 2019

Latest quarterly social sector new build figures up to end June 2019 show that:

between April and June 2019, 856 social sector new build homes were completed (19% less than the 1,060 completions in the same quarter in 2018), and 1,193 were started (5% more than the same quarter in the previous year). This brings the total completions for the 12 months to end June 2019 to 5,378 (a 13% increase on the 4,778 social sector homes completed in the previous year). Total starts over the 12 months to end June 2019 are now at 6,776 (2% more than the 6,611 started in the previous year)
Latest quarterly Affordable Housing Supply figures (new builds, rehabilitations and off-the-shelf purchases) up to end June 2019 show that:

affordable housing supply completions have totalled 9,128, up 7% (633 homes) on the previous year. This includes increases in social rent completions (up by 23% or 1,189 homes) and affordable rent completions (up by 21% or 187 homes), and a decrease in affordable home ownership completions (down 30% or 743 homes)
there were 10,844 affordable housing approvals over the year up to end June 2019, down by 9% or 1,088 homes compared to the previous year. This includes decreases in affordable rent approvals (down 55% or 1,403 homes) and affordable home ownership approvals (down 25% or 620 homes), with an increase in social rent approvals (up 14% or 935 homes)
there were 10,370 affordable houses started in the year to end June 2019, down 2% or 246 homes compared to the previous year. This includes decreases in affordable rent starts (down by 43% or 792 homes), and affordable home ownership starts (down by 10% or 237 homes), but an increase in social rent starts (up 12% or 783 homes)
The affordable housing supply statistics are used to inform the Scottish Government target to deliver 50,000 affordable homes, including 35,000 homes for social rent, over the period 2016-17 to 2020-21, and reflect the number of affordable homes delivered that have received some form of government support through loans, grant or guarantees.

Background

Note that the new build starts figures quoted in this Statistical News Release contain information on approvals rather than starts for housing associations. This is because the data held on approvals for housing association new builds is considered to be a more robust measure than the data held on starts. An approval is the point in time at which Scottish Government funding is granted through the Affordable Housing Supply Programme. Further information on this is available in the explanatory document providing background information on the quarterly statistics.

The Affordable Housing Supply Programme statistics include off-the-shelf purchases and rehabilitations as well as new build.

Social Rent includes Housing Association Rent, Council House Rent as well as Home Owner Support Fund Rent
Affordable Rent includes Mid-Market Rent (MMR), National Housing Trust (NHT) Rent as well as other programmes such as the Empty Homes Loan Fund (EHLF) and Rural Homes for Rent (RHfR)
Affordable Home Ownership includes Open Market Shared Equity (OMSE), New Supply Shared Equity (NSSE), Shared Ownership (LCHO) as well as other programmes such as Home Owner Support Fund Shared Equity
The Housing Statistics for Scotland 2019: Annual Key Trends Summary, which presents information on new house building, public sector house sales, local authority lettings and evictions, stock and vacancy rates, supported housing, housing lists, scheme of assistance and houses in multiple occupation, can be found at this address: http://www.gov.scot/ISBN/9781787812307.

The Housing Statistics for Scotland Quarterly Update September 2019, containing details of new house building and the Affordable Housing Supply Programme, can be found at this address: http://www.gov.scot/ISBN/9781787812314.

Background information including Excel tables and an explanatory note on the Quarterly Housing Statistics can be found in the Housing Statistics webpages.

Housing Association and most Local Authority led new build activity is funded through Scottish Government funding programmes. Several changes to these funding programmes in recent years have affected both the trends and seasonal quarterly pattern of new build approvals, so care should be taken when making comparisons over time. These same changes will also impact on the Affordable Housing Supply Programme.

The supply statistics break down new build construction activity into private-led and social sector starts and completions, with the social sector further broken down between local authority and registered social landlord (housing association). The figures are as recorded by Local Authority administrative systems and the Scottish Government Affordable Housing Supply Programme (AHSP) system. Private sector construction activity includes not only homes built for private sale but also some homes which are used in the affordable housing sector and self-build activity by local builders.

Source: Scottish Government

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Why new homes are key to UK prosperity

The U.K. faces a significant housing challenge. In simple terms, there are not enough new homes being built each year to meet the demands of the population.

The U.K. government has set a target to see 300,000 new homes built annually by the mid-2020s in an attempt to solve the national housing shortage. So there is serious work to be done.

Lloyds Banking Group has an important role to play in helping people across Britain to get a home. The organization has made several pledges around housing as part of its most recent prosper plan and is making good progress towards them. A healthy housing market is a key indicator of broader economic strength and that’s why housing is core to the Group’s commitment to help Britain prosper.

Forming a new type of partnership

Housing Growth Partnership (HGP) is a social-impact equity investor. It was established in 2015 as a joint venture between Lloyds Banking Group and Homes England. The formation was unique — the first housing focused public—private partnership with the U.K. government.

When we established the partnership, we had two very clear and specific goals in mind: to support the sustainable growth of regional residential developers across the U.K. through investment and mentoring; and to accelerate housing delivery. We know that one of the chief obstacles preventing small firms from growing and developing in the housing industry is capital constraints, and we established the partnership to help with this. HGP invests in residential projects, freeing up housebuilder equity that can be used on other schemes.

HGP was founded with an initial £100 million of seed capital and, following additional investment, now has nearly £1 billion-worth of homes under construction across the U.K. — over 3,000 new homes.

We’ll kick start the construction of another 1,000 homes by 2020 and aim to have delivered 10,000 homes by 2025.

First and foremost we’re focused on building homes. We’re already funding the build of thousands of new houses across the country. We’ll kick start the construction of another 1,000 homes by 2020 and aim to have delivered 10,000 homes by 2025.

Funding is one part of the puzzle, but the role of HGP goes beyond simply investing money. It seeks to be a genuine partner. We’re developing long-term relationships with smaller housebuilders, helping them to grow their businesses and the number of homes they are able to build across Britain. In fact, over the last 12 months our senior adviser panel of housing experts from across the U.K. has delivered more than 1,000 hours of free mentoring to small housebuilders. We all benefit when these firms can overcome those initial entry barriers, establish themselves in the industry and grow.

Addressing systemic challenges in the housing industry

It’s clear through the conversations we have with U.K. housebuilders that they face challenges at all stages of the development process.

A fundamental issue is the supply of skilled labor. I’m meeting with more and more of our partners who are looking to address this by employing apprentices. Many have formed connections with their local colleges and education centers, and are actively encouraging young people into the sector. Getting youngsters involved and engaged in housing helps create a pipeline of future leaders and also brings in a diverse range of innovative thinking.

This is where the partnership can make the most impact. By investing in companies across the housing supply chain, we can help firms employ more people, develop specialist skills and create more opportunities in the future.

We also lobby for crucial change across the industry and drive financial innovation in the sector. The determination of planning permissions, alongside the growing number of consented conditions to satisfy ahead of starting work on-site is a particular area of concern for housebuilders.

It’s clear through the conversations we have with U.K. housebuilders that they face challenges at all stages of the development process.

This complex and often difficult process limits their ability to grow their businesses and, in turn, increase the supply of new homes to the U.K. market. We are working hard with our partners to understand the key issues within the U.K. planning system and identify what can be done to address them. Alongside this, we are also looking at how we can support developers to introduce Modern Methods of Construction into their building processes.

Finding new solutions to the challenge of a skills and labor shortage, alongside the need to increase the speed of production and develop more energy-efficient homes will be key to the future success of the industry.

New solutions to housing challenges

We’re often asked ‘what comes next?’ There is so much innovation and development in housing at the moment and it’s evolving quickly. At the moment we are seeing a strong focus on Modern Methods of Construction.

What’s fascinating about this type of production is how efficient it is to produce units in a controlled environment — an environment that crucially, is weather proof. This could be a real game changer in the U.K.

What’s clear though is that the U.K.’s housing challenges cannot be solved in isolation. Genuine collaboration, both across the industry and in partnership with the U.K. government, will be crucial in driving further innovation and overcoming the challenges that the industry faces.

By ANDY HULME

Source: Politico

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Affordable green homes in the Scottish Borders could soon be a reality

Warmer, cheaper, more affordable homes is something we all want, and this could be a reality as Eildon Housing look at future house building and its impact on the environment.

They are investing millions of pounds as part of their strategy to make sure everyone has access to somewhere they can call home.

The need for affordable housing in the Borders has hit an all-time high, with recent figures showing, on average, 17 people bidding for every home that becomes available.

To meet this need it is important to be able to build a house quicker and make it cheaper to heat and therefore eradicate fuel poverty especially in rural parts of the Borders reducing our use of fossil fuels.

An exciting building project will start construction in the New Year that they hope will tick all those boxes as they look to test different construction methods across four new sites.

Working in partnership with Scottish Borders Council, Construction Scotland Innovation Centre (CSIC) and Glasgow School of Art (MEARU) the new developments will be part of a study to compare construction costs, time to build, living quality, and whether the homes are financially viable to build.

The developments at Westruther, Broughton, Denholm and Innerleithen will see up to 50 new green homes built and will test different building methods from Passivhaus, Energiesprong, Volumetric and the traditional build we’re all used to.

Potential new tenants will be heavily involved in the study for a period of time when they move in, as the results will be used to determine not only the future building programme for Eildon, but also lead the way for how Scottish homes are built and lived in, in the future.

By DAWN RENTON

Source: Scotsman

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UK construction output declines for third consecutive month

Output in the UK construction sector declined for the third month running in July as lower volumes of work were recorded across all three broad categories of activity.

The IHS Markit/CIPS UK Construction Total Activity Index recorded 45.3 in July – below the 50 no-change value – to mark the third consecutive monthly fall.

The latest reading was up from June’s ten-year low of 43.1 but still signalled a marked downturn in total construction activity.

The latest survey also revealed a sharp drop in new order intakes, which survey respondents mainly attributed to subdued economic conditions and domestic political uncertainty. Weaker demand contributed to a slide in business optimism towards the year-ahead outlook for construction activity, with the degree of confidence the lowest since November 2012.

Commercial construction was the worst-performing category in July, followed closely by civil engineering activity. Anecdotal evidence suggested that risk aversion among clients in response to Brexit uncertainty continued to hold back work on commercial projects. At the same time, some survey respondents noted that delays to contract awards for infrastructure work had acted as a headwind to civil engineering activity.

Housebuilding fell for the second month in a row during July, but the rate of decline was only modest and eased from the three-year record seen in June. Reports from construction companies suggested that sluggish housing market conditions had a negative influence on residential work during the latest survey period.

July data pointed to a downturn in total order books across the construction sector for the fourth successive month, which is the longest continuous period of decline since 2016. Lower volumes of new business were often linked to a lack of tender opportunities amid weaker domestic economic conditions and ongoing political uncertainty.

Employment numbers were cut back in response to deteriorating order books, although the rate of job shedding was only modest and largely reflected the non-replacement of voluntary leavers. Sub-contractor usage meanwhile decreased for the sixth consecutive month.

Demand for construction products and materials continued to soften, as signalled by a solid drop in purchasing activity during July. This helped to alleviate some of the pressure on supplier capacity, with lead times lengthening to the smallest extent since September 2016. A robust rate of input cost inflation persisted in July, partly reflecting rising prices for imported items and those in short supply (particularly insulation and plasterboard).

Construction companies meanwhile reported a sharp drop in their confidence regarding the year-ahead outlook for business activity. The latest reading was the lowest since November 2012. Survey respondents often cited Brexit uncertainty, the prospect of a General Election and delays to infrastructure work.

Tim Moore, economics associate director at IHS Markit, said: “UK construction output remains on a downward trajectory and another sharp drop in new orders has reduced the likelihood of a turnaround in the coming months.

“Total business activity declined at a softer pace than the ten-year record seen in June, but this should not detract attention from the challenges ahead for the construction sector. Customer demand has been squeezed on all sides in recent months, which has pushed down business expectations to the lowest since the second half of 2012.

“July data revealed declines in house building, commercial work and civil engineering, with all three areas suffering to some degree from domestic political uncertainty and delayed decision-making.

“Construction companies have started to respond to lower workloads by cutting back on input buying, staffing numbers and sub-contractor usage. If the current speed of construction sector retrenchment is sustained, it will soon ripple through the supply chain and spillovers to other parts of the UK economy will quickly become apparent.”

Responding to the statistics, the Federation of Master Builder (FMB) called for a delay to the implementation of Reverse Charge VAT.

Brian Berry, chief executive of the Federation of Master Builders, said: “The fall in construction activity for the third month in a row and business optimism being at its lowest levels since 2012 means the building industry is heading towards crunch time. The Government must immediately postpone its plans for a complex and burdensome tax change if the supply chain is to start to turnaround its consistent decline. The time is not right to implement Reverse Charge VAT, which would restrict cashflow and add extra administrative burdens which risk sending small businesses to the wall. The government’s guidance on the policy is confusing and complex, and it wasn’t published with enough time for companies to prepare.”

Berry added: “Reverse Charge VAT, Making Tax Digital and a no-deal Brexit will create the perfect storm for construction’s small businesses, and today’s PMI data shows that the resilience is not there to weather it. If we are to deliver the housing and infrastructure that we need now and in the future, we will need to maintain capacity in the construction industry which means looking after the supply chain. The government must support the industry by delaying Reverse Charge VAT for six months at least.”

Mark Robinson, Scape Group chief executive, added: “New work and business optimism dropped in July as customer demand plummeted for the third month in the row, in response to the increasingly gloomy economic outlook and heightened political uncertainty.

“A no-deal Brexit in October is looking more likely than ever – which is terrible news for the sector. Not only is the knock-on effect on the pound likely to make the cost of construction materials shoot up even more, but an end to free movement will see thousands of skilled workers return home, further deepening the skills shortage that the sector faces.

“All eyes are now on Boris to get Britain building again. Bold decision making, clear commitments, and guaranteed funding for infrastructure investment all have a proven track record of igniting economic recovery and growth. We are counting on his ‘can do’ attitude to cut through the paralysis on decision-making we are experiencing in the public sector.

“With just three months until our Brexit date, there is no room for error. Boris’ government now hinges on a majority of one, but right now a general election will only further distract Whitehall from the issue at hand – securing a deal that works for all.”

Source: Scottish Construction Now