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Keep calm and carry on: development sector remains robust

Only a little while ago, the Bank of England base rate was at a record low, ultra-cheap mortgages were in abundance and property prices were climbing strongly on the back of soaring demand.

Fast-forward to today and the market looks like a very different place, indeed.

In an article I wrote a few months ago, I warned of an impending slowdown in the UK’s property market. However, the pace at which conditions have changed has taken us all by surprise.

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In those few months, the Bank of England has hiked rates to a high of 3.5%, the economy is heading for recession and, according to surveyors, demand for property is falling. That has had a knock-on effect on house prices, which fell on a monthly basis in October for the first time since July 2021, according to Nationwide’s House Price Index. On top of that, some have predicted a sharp fall in house prices next year, as households grapple with rising mortgage rates and soaring inflation.

But while the outlook may seem gloomy, let’s not forget the fundamentals that underpin the housing market in this country.

The UK is property-obsessed and therefore, while transactions may dip in the short-term, history suggests that the market will recover.

It’s also worth remembering that we, as a country, do not build enough houses. Experts often say we need to build 300,000 new homes a year to keep up with household formation, but we haven’t done that since the 1970s. Until that happens, house prices will continue to be supported by the imbalance between supply and demand.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Another thing to note is that we’ve seen foreign investment in the UK’s property market hold up well, proving that the asset class remains attractive to investors. Softening house prices and a weak pound will actually boost the attractiveness of UK property to foreign investors even further, which might offset lower activity from domestic investors.

If anything, then, I expect the specialist end of the market, such as bridging and development finance, to remain fairly robust, even if activity tails off in the mainstream market. However, that is not to say conditions will remain the same for investors and developers as they had been.

Specialist lenders retain an appetite to lend despite the worsening economic outlook, but it’s clear that developers will have to pay more for finance in the future than they did in the past.

Truth be told, development finance has arguably been artificially cheap for too long, so a correction was due at some point. The rates developers pay have gone up, but with most of the expected increases now priced in, we should see them begin to settle.

Lenders may also want to see proof that developers are controlling costs in a high-inflation environment. That means not overpaying for land and developing good relationships with builders’ merchants to ensure you can lock-in your long-term costs.

However, like I said, I am confident that lenders will not turn off the taps. While they will want to manage the increased risk that comes with a challenging economic environment, they will also want to compete hard for the business that is left.

Although conditions do look challenging, I do believe that the development sector will hold up relatively well in the coming months.

By Guy Murray

Source: Development Finance Today

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House builders call for changes in planning process

If developers are to build more and better homes, the planning process and the attitude of planning authorities need an overhaul.

That’s the views of developers and property experts attending the third roundtable in TheBusinessDesk.com’s series on the Future of Yorkshire, sponsored by Womble Bond Dickinson, which considered housing delivery and modern methods of construction (MMC).

Boris Johnson in 2019 announced a target of 300,000 new homes a year to alleviate housing shortages in the UK. Completions have remained a mere fraction of that, with around 37,000 homes in England in the year to March. Affordable housing schemes accounted for 26,500 of those. Meanwhile average UK house prices remain high, rising to nearly £295,000 in June.

And while demand fuelling high prices might seem ideal for developers, they are also facing rising construction costs, and delays in planning applications in the wake of the pandemic increase costs and can lead to loss of funding for a project.

“It’s very difficult to sell virtues to those who are invested in schemes when we’ve gone through such a period of change that we have,” said Will Martin, strategic land lead at Commercial Estates Group, citing not only the pandemic, but political uncertainty. “In my mind we need a period to settle down and get some more certainty in terms of delivery.”

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Rob Gill, head of acquisitions at Casa by Moda, put part of the blame on planning authorities, saying determinations of planning applications by his firm were at a 15 or 20 year low. “I do think we’re getting more and more polarised, the public-private sectors looking at each other and saying, ‘What’s going on? Why is this happening? Why are you doing it this way? You should be doing it that way.’ And it does seem to me politically there needs to be something to bring the two together.”

Shelley Williams, associate residential development lawyer at Womble Bond Dickinson, said planning authorities would have to be more forward thinking and consider commercial interests in future. “It’s the red tape that’s the barrier, in terms of who makes the decision. The private sector can just make their decisions, whereas local authority it has to go to committee. The person you’ve been working with on a specific deal might not be the one who can make the decision. That compounds the delay. It’s quite archaic.”

Emma Gomersal, associate director of real estate at Deloitte, said it was crucial for local authorities to update their framework plans. “That’s what has created such huge delays within many local authorities. They haven’t got an up-to-date plan and officers are constantly having to battle applications coming on green belt land. It’s sapping so much time and resource and effort at that local authority level.”

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Tim Reeve, director of Advent Developments, questioned whether local councillors were qualified to judge planning matters objectively. “I’m a great believer in democracy, but if it’s a policy compliant application, why can it not be approved? It’s very simple – if it’s policy compliant, where’s the harm? And that’s the problem. It’s the subjective interpretation of where the harm is that’s the problem. The delay might be existential to your funding.”

But if planning matters were sorted out, what would future homes look like?

James Lewis, Leeds studio lead at Buttress Architects, was clear. “It’s creating a community and environment that people want to live in, with a central square, a green space in the middle. It’s not about getting as many houses on a site as possible any more. You just can’t do it.

“It’s got to be more sensitive and more environmentally friendly. And people are aware about their energy bills, so they want to understand it’s energy efficient.”

Ryan Shepherd, senior development manager at South Yorkshire Combined Authority, added that infrastructure and connectivity played an important part in creating those desirable spaces, particularly in urban areas where SYCA wanted to attract more professionals and families.

“Our overarching aim is supporting the economic growth of the region. It’s implicitly tied to housing and how you can develop those spaces that retain students from the region and bringing more people in who want to live in those areas.”

The roundtable was part of a series on the Future of Yorkshire sponsored by Womble Bond Dickinson, Mott Macdonald, Buttress Architects and Deloitte. The next in the series, in November, will consider devolution.

By Andrew Staples

Source: The Business Deck

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£3.6m funding deal enables housing scheme at former social club site

Specialist lender, Together, has agreed a £3.6m funding facility for a family-orientated homes development in South Yorkshire.

Housebuilder Walshaw Homes is constructing 22 homes on a plot of land on the site of a demolished social club in Main Street, Hackenthorpe, Sheffield.

The developer’s funding partner, Together, provided the finance package for the “Valley View” scheme of three and four-bedroom luxury homes. The homes are available for between £225,000 and £350,000.

Walshaw Homes managing director, Joel Richards, approached Together – which provides commercial and development finance and has a loan book of £4.8bn – after his firm acquired the site of the long since demolished Cherry Tree Social Club.

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Becky Hall, head of origination at Together, said: “We agreed to provide the funding after seeing the potential of the location and having been really impressed with the vision of Walshaw Homes and its managing director, Joel Richards.

“I already had a strong business relationship with the developer, having worked with them in the past, so it’s great to help Joel and the team realise their ambitions for this latest scheme as it begins to take shape – it will bring quality housing to meet the needs of Sheffield’s growing population.”

Planning permission for the housing scheme was granted in November last year, allowing construction to begin in June. It is expected to be completed by August 2023.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Richards said: “Construction is now well underway, with foundations in place for five of the plots, and there has been a huge amount of local interest.

“These new, modern two and three-storey homes will be ideal for couples and young families and are next door to local shops with other amenities such as the Crystal Peaks shopping centre and the Rother Valley Country Park just on the doorstep.

“It’s fantastic that Together has agreed to support us. It’s particularly beneficial to have a lender on board which really understands the needs of developers like us and is willing to help turn our exciting vision into a reality.”

By Miran Rahman

Source: The Business Desk

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UK construction output growth surges to two decade high

UK construction output growth reached its highest level for over two decades, according to a closely watched business survey released today.

The latest IHS Markit/CIPS UK construction PMI for June was 66.3, up from 64.2 in May, the strongest rate of output growth for exactly 24 years.

Sharp rises in business activity across the three main sectors of the construction industry drove the over two-decade high expansion.

Housebuilding was the strongest sector, reaching 68.2 in June, the fastest pace of growth since November 2003.

Strong demand in the UK housing market and record price rises is likely to have prompted housebuilders to begin new projects.

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Commercial work recorded a reading of 66.9, notching another long-term high – output growth was the strongest since March 1998.

Civil engineering activity rose sharply in June (60.7), but the speed of growth eased to a three-month low.

Total new orders across the construction industry have now increased for 13 successive months, although the latest expansion was slower than May’s survey-record high.

Tim Moore, economics director at IHS Markit, says: “June data signalled another rapid increase in UK construction output as housing, commercial and civil engineering activity all expanded at a brisk pace.”

“The headline index signalled the fastest rise in business activity across the construction sector for 24 years. Total new orders expanded at one of the strongest rates since the summer of 2007, mostly reflecting robust demand for residential projects and a boost to commercial work from the reopening UK economy.”

Strong demand in the industry prompted constructors to rapidly scale staffing levels to boost production capacity in order to cope with swelling backlogs of work.

The rate of job creation moderated since May but remained among the fastest seen over the past seven years.

Read about the UK Housing Market via our Specialist Residential & Buy to Let Division

Input inflation climbs at record pace

Despite the strong growth in output, prices for raw materials rose at their fastest pace on record, caused by severe supply and demand imbalances.

Average prices paid for products and materials increased at a survey-record pace, caused by firms competing with each other to secure key inputs amid severe shortages, IHS Markit said.

Widespread scarcity of essential products resulted in a slowing down of completion times as construction firms had to deal with poor availability of construction components.

The survey recorded its worse month for supplier delays since the it began just over 24 years ago, and over 77 per cent of constructors reported longer lead times among suppliers.

“Supply chains once again struggled to keep up with demand for construction products and materials, with lead times lengthening to the greatest extent since the survey began in April 1997” Moore said.

“Escalating cost pressures and concerns about labour availability appear to have constrained business optimism at some building firms.”

Duncan Brock, group director at the Chartered Institute of Procurement & Supply, said: “A wave of new orders overwhelmed supply chains again this month where stock levels could not keep up with building work accelerating at the fastest rate since June 1997.”

“The meagre availability of raw materials placed obstacles in the path of stronger workflows where supplier delivery times extended into record-breaking territory once again and surpassed the height of disruption when the pandemic first hit.”

Concerns about intense inflationary pressures among producers is fuelling concerns that firms may start passing on higher costs to consumers.

Latest data from the ONS shows annual UK inflation is already running higher than the Bank of England’s target, reaching 2.1 per cent last month.

By Jack Barnett

Source: City AM

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PM promises thousands of new homes and radical planning reform

PM Boris Johnson (pictured) has pledged that, as part of a suite of measures to rebuild the economy following the COVID-19 crisis, the government will aim to build thousands of new homes on Brownfield sites and others.

Johnson also flagged ‘radical’ upcoming planning reform at levels that he claimed have not been seen since the end of World War 2.

He also promised that the economic crisis would not be met with a return to austerity measures.

During the announcement, Johnson said: “We’re preparing now slowly, cautiously to come out of hibernation, and I believe it’s absolutely vital for us to set out the way ahead, so that everyone can think and plan for the future, short, medium and long-term.”

In reference to home building, specifically, he added: “There has been an intergenerational injustice and the government will now help to get the young on the housing ladder just as their parents did.

“Build, build, build. Build better. Build faster.”

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Managing Director of estate agent Barrows and Forrester, James Forrester, commented:

“Today’s announcement by the Prime Minister is a rallying call to commerce, industry, the property sector and finance, to piggy-back his huge spending plans and literally put Britain back together again.

We seem set to spend our way to fiscal health and to ensure, in particular, that there is finally a genuine home-building revolution to match similar investment intentions in the transport, education and health sectors.

What a welcome relief this is and at just the right time.”

Marc von Grundherr, director of lettings and estate agent Benham and Reeves commented: “Like many areas of life, the severe lack of homes being built has understandably taken a back seat.

“However, it now stands as one of the pillars on which the government is forming its economic recovery plan.

“Hopefully, this added emphasis on such a burning issue will result in some action and this will be nothing but positive for the UK property market.

“Of course, there is always the danger that, like many before him, the Prime Minister’s words will equate to little more than just that.

“With the UK property market still facing a very uncertain landscape, we certainly hope this isn’t the case.”

Jeremy Leaf, north London estate agent and a former residential chairman of the Royal Institution of Chartered Surveyors (RICS), said: “While, of course, the announcement of more building is very welcome we want to see more specifics, not just on desperately-needed affordable housing projects but a strict timetable for delivery, especially of sites with planning.

“So many of the larger schemes in particular are mired in planning or lending red tape so certainly the concentration on infrastructure will help to release many from that log jam by improving connectivity.”

Mark Hayward, chief executive at NAEA Propertymark, said: “Propertymark welcomes the Prime Minister’s ambition to bounce back as we enter the new phase of this pandemic.

“It is important that as we try to reboot the economy we build a greater supply of affordable houses that can rejuvenate urban areas most affected by this crisis.

“Simplification of the planning process will ease the pressures caused on the supply of homes and ensure the property market drives the UK’s economic recovery.

“We look forward to working with government during its White Paper process later this month to ensure the system has less red tape and is easier to navigate.”

By Jessica Bird

Source: Mortgage Introducer

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New housing projects announced by North Lanarkshire Council

North Lanarkshire Council has added further sites for new build homes, awarded new contracts to take forward more developments and outlined housing plans for villages and town centres as it drives forward its plans to deliver 5,000 new council homes across the region.

The four towns for which proposals are being sought are Motherwell (including Ravenscraig), Bellshill, Airdrie and Coatbridge. Other suitable locations may be considered on a site by site basis. Developers are being asked to contact the council to part of its plans.

According to the local authority, the new contracts, combined with the Development Pathfinder scheme to purchase more properties from private housebuilders, are helping to support North Lanarkshire’s economic recovery and sustain jobs as the region emerges from the COVID-19 lockdown situation.

The council’s teams have continued to progress housing projects during lockdown, ensuring contracts continue to move forward, and to prepare purchases of homes through the Open Market Purchase Scheme which will see the purchase of former council homes restart once restrictions are lifted.

Continuing to identify sites is seen as “crucial” to ensuring its phased plans to demolish existing tower blocks and build new accessible homes are met.

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Some of the recently approved proposals include:

  • Potential sites for new homes identified at Glenacre Drive, Airdrie; Gibb Street, Chapelhall and Graham Street, Wishaw, which will be developed in conjunction with the redevelopment of the social work office at King Street to support the regeneration of our town centres.
  • Approval to award contracts to take forward new build homes on the sites of the former Belhaven House, Wishaw; the former Chiltern’s House, Chryston at the former council flats in Northburn Avenue, Airdrie; Burnhall Place, Waterloo and Caledonian Avenue, Bellshill.
  • Ambitious plans to convert the former Municipal Buildings, Kildonan Street, Coatbridge, into new affordable homes

Other town centre housing projects are also progressing and include plans for the redevelopment at: Kingshouse, King Street (Wishaw) for town centre residential use; the former Methodist Church site in Wishaw for new town centre flats; the vacant YMCA building on Windmillhill Street, Motherwell and the future regeneration of the fire damaged site on Main Street, Coatbridge.

Plans to address the derelict building at the former Sharks Mouth pub, Bank Street, Coatbridge have also taken a major step forward. Planning permission is granted and approval given to progress with the procurement of the work, including demolition of most of the building while retaining some of the façade of the pub.

Councillor Pat O’Rourke, acting convener of communities and housing, said: “Due to the ongoing COVID-19 pandemic, construction work, in line with Scottish Government guidelines, has come to a halt. However, we’ve continued to work behind the scenes to push forward our ambitious housing programme to ensure we deliver our target.

“This means we’re ready to support the construction industry at this difficult time as soon as it’s safe to be up and running again.

“The contracts we’ve awarded also include a range of community benefits for local areas including careers events for school children, grants to local groups, new jobs and apprenticeship opportunities. By creating local jobs and training we’ll be strengthening our local economy over a sustained period.

“Improving the lives of our tenants and regenerating our local communities and town centres are the drivers behind our long term ambition. It’s an exciting time for North Lanarkshire and we’re committed to delivering on our ambitions and aspirations for the area and our residents.”

Source: Scottish Housing News

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Investment in construction can kick start the UK economy say experts

An £11.27bn investment in construction and a series of strategic decisions around new home building can kick start the UK’s economic recovery and deliver a £33bn return for the Government, according to experts at Birmingham City University.

The Build Back Better: Covid-19 Economy Recovery Plan features a blueprint for a safe return to construction, a set of recommendations to help stimulate demand for new homes and home improvement, and details on how to build essential infrastructure and train a new generation of skilled workers – acting as a catalyst for growth and delivering income for HMRC.

The plan also calls on the Government to stand by its commitment to “do everything it takes” to fight the virus and support the UK economy, by investing £11.27bn in a wide reaching programme, designed to create mass employment and produce a £33 billion return.

Written by Birmingham City University’s Dr Steve McCabe, Associate Professor at the Institute for Design and Economic Acceleration and Mike Leonard, Visiting Professor of Manufacturing and Construction and founder of the Get Britain Building campaign, the plan brings together all sectors of the construction industry for a solution-led approach.

Recommendations and observations in the plan include:

  • A phased return to work following specific guidelines can ensure the protection of construction sites during pandemic
  • Small house builders, often highly efficient and providers of local employment and procurement, must be given encouragement
  • Address fuel poverty through direct intervention by local authorities using local companies
  • Construction can offer long term skilled employment opportunities that can act as a catalyst in achieving inclusive economic growth
  • Provide incentives and highlight environmental benefits for consumers to replace inefficient and outdated gas boilers
  • 30,000 new social houses built per year for the next three years will address living standards, mobility and some shortfall
  • Proposed Building Regulation changes should be delayed in light of exceptional circumstances posed by pandemic
  • Construction must be made more attractive as a career choice to young people through regional marketing campaigns

Of particular focus in Build Back Better: Covid-19 Economy Recovery Plan are SMEs, who dominate the sector, with a suggestion that UK Plc fully engages such businesses in order to build the infrastructure and new homes the UK needs, alongside investments to deal with fuel poverty and the upgrading of existing housing stock to meet the net zero 2050 obligations.

Leonard, who is also CEO of Building Alliance, said: “History tells us that the construction industry is the tried and tested solution to drive economic recovery, not least due to the fact we manufacture the vast majority of building materials in the UK which provides resilience, skilled jobs and fast returns on investment. The upstream and downstream jobs in manufacturing, architecture, planning, engineering, distribution and construction, creates an unrivalled multiplier that can achieve inclusive growth, building back better and helping to rebalance our economy. Saving lives must remain our priority but we now have the signal to begin to safely unlock and begin the long path to economic recovery. Construction and the building materials manufacturers are now returning to work with the proper safeguards in place. We must now “Get Britain Building” and “Get Britain Working” delivering the scale of economic multiplier the county needs to bounce back stronger.”

Research carried out in 2018 by Birmingham City University and The Building Alliance calculated that building 300,000 homes a year using, as much as possible, British-made building materials and local builders, would generate an economic ‘uplift’ of more than £90 billion for the UK.

Dr McCabe added: “Covid-19 has resulted in the loss of over 30,000 lives. The Government, quite rightly, locked the nation down to reduce the spread of the virus. However, ONS data clearly demonstrates that effectively closing down the economy through ‘lockdown’ has caused profound economic shock. It’s estimated that at least £2bn a day is being lost during the pandemic. The overall cost to the UK economy will exceed £300 billion and, depending on the speed of recovery, could be significantly higher. As and when it is safe to do so, a return in construction activity as well as the building materials manufacturing supporting it will underpin a fast and effective way to begin to begin the process of recovery from what is the greatest shock to the UK’s economy in living memory.”

Source: BMJ

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Build-to-rent development launches in Wembley

HUB has completed Chesterfield House in Wembley, North London, a 239-home build-to-rent development designed by architects Maccreanor Lavington.

The landmark scheme, which comprises two buildings of 21 and 26-storeys, has been handed over to Realstar, which will operate Chesterfield House under its UNCLE brand.

The development is now known as UNCLE Wembley.

Alex Hall, senior development manager at HUB, said: “The new development brings 239 exemplar build-to-rent homes to Wembley under the UNCLE brand, including extensive public realm and retail from which the whole community will benefit.

“Not only is the project a fantastic new asset for the area, it is also an architecturally superb building that we believe represents a real step-change in quality for Wembley and acts as a regeneration marker for the High Road.

“As we now look ahead to delivering Wembley Link, HUB’s second development in the revitalisation of Wembley High Road, we would like to thank the people of Wembley for their crucial input during consultation for Chesterfield House.

“We would also like to thank our contractors Henry Construction for their commitment to the project in ensuring the extremely high-quality and timely delivery of UNCLE Wembley.

“Since day one, HUB has worked closely with local people to secure the best outcome for everyone – and we believe that UNCLE Wembley represents just that.”

The property will offer a choice of furnished and unfurnished apartments, with the furnished element provided by Danish brand Bo Concept.

UNCLE said it made sure the amenities are also focused around enhancing the physical and mental well-being of its residents.

These include a fitness studio with Technogym equipment and a TRX wall, a Zen Zone which incorporates an InHere Meditation Studio, a rooftop terrace and BBQ area as well as an indoor three-point basketball court.

The two main blocks are connected by a seven-storey building which frames a new public square at ground floor level. The square features seating, paved areas as well as new planting.

A public walkway through the link building also provides access to potential future phases of development behind the High Road.

The project was delivered via a partnership between HUB and specialist investor Bridges Fund Management. Building contractor Henry Construction completed work at the Brent site last month following a three-year programme to deliver Wembley’s tallest building.

BY RYAN BEMBRIDGE

Source: Property Wire

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New builds will drive residential property market revival

As the residential property market reopens it will be new builds that drive the market and lead its revival.

Here are six reasons why:

Resi Revival 1 – off-plan take off
Many new build sales are agreed off-plan with buyers not always viewing the physical property they are buying, perhaps relying on a visit to a show home before the lockdown, online brochures, virtual models, computerised images and other technology.

Resi Revival 2 – phased release
New build developments are often highly anticipated, with interested buyers’ already having decided on their preferred scheme. They will have done their research early in the year on the area on pricing and house types and will be ready to go.

Resi Revival 3 – mortgage valuations
New build mortgage valuations are not necessarily based on the finished home as it will still be under construction, but on comparable homes and market data. This means buyers will have mortgage offers ready to go, speeding up the sale process.

Resi Revival 4 – move-in ready
Completion on a new build property has the added benefit that no one has lived at the property leaving less cause for concern on COVID-19 contamination and the need for deep cleaning, giving buyers, and particularly those with children, peace of mind.

Resi Revival 5 – rental investors
New build properties are attractive as rental units as they require little to zero finishing work before tenants can move in and are low maintenance to look after.

Overseas investors are likely to play a key role on driving sales and injecting cash into the property market.

Resi Revival 6 – Help to Buy mark 2.
The existing Help to Buy scheme is due to end in March 2021 and will be replaced with the new scheme available only to first-time buyers.

There is still time for deals to be agreed with Help to Buy finance under the current scheme, with FTBs secure that help will be there when it is needed.

By Beth Heley

Source: Mortgage Introducer

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New home building can kick start the UK’s economic recovery, experts suggest

An £11.27bn investment in construction and a series of strategic decisions around new home building can kick start the UK’s economic recovery and deliver a £33bn return for the Government, according to experts at Birmingham City University.

Experienced regional economist Dr Steve McCabe and construction expert Mike Leonard have produced the Build Back Better: Covid-19 Economy Recovery Plan which features a blueprint for a safe return to construction, a set of recommendations to help stimulate demand for new homes and home improvement, and details on how to build essential infrastructure and train a new generation of skilled workers – acting as a catalyst for growth and delivering income for HMRC.

The plan, which follows a clear instruction from Prime Minister Boris Johnson that those in construction and manufacturing should now return to work, also calls on the Government to stand by its commitment to “do everything it takes” to fight the virus and support the UK economy, by investing £11.27bn in a wide reaching programme, designed to create mass employment and produce a £33 billion return.

Authored by Birmingham City University’s Dr Steve McCabe, Associate Professor at the Institute for Design and Economic Acceleration and Mike Leonard, Visiting Professor of Manufacturing and Construction and founder of the Get Britain Building campaign, the hard-hitting and wide-ranging plan brings together all sectors of the construction industry for a solution-led approach.

Recommendations and observations in the plan include:

  • A phased return to work following specific guidelines can ensure the protection of construction sites during pandemic
  • Small house builders, often highly efficient and providers of local employment and procurement, must be given encouragement
  • Address fuel poverty through direct intervention by local authorities using local companies
  • Construction can offer long term skilled employment opportunities that can act as a catalyst in achieving inclusive economic growth
  • Provide incentives and highlight environmental benefits for consumers to replace inefficient and outdated gas boilers
  • 30,000 new social houses built per year for the next three years will address living standards, mobility and some shortfall
  • Proposed Building Regulation changes should be delayed in light of exceptional circumstances posed by pandemic
  • Construction must be made more attractive as a career choice to young people through regional marketing campaigns

Of particular focus in Build Back Better: Covid-19 Economy Recovery Plan are SMEs, who dominate the sector, with a suggestion that UK Plc fully engages such businesses in order to build the infrastructure and new homes the UK needs, alongside investments to deal with fuel poverty and the upgrading of existing housing stock to meet the net zero 2050 obligations.

McCabe and Leonard – both based in the UK Midlands, an area KMPG has assessed as likely to be worst hit economically by the pandemic – also make strong recommendations to delay the introduction of non-safety related building regulations and provide a range of incentives to stimulate consumer demand, accelerate training and increase apprenticeship opportunities.

Mike Leonard, who is also CEO of Building Alliance, said, “History tells us that the construction industry is the tried and tested solution to drive economic recovery, not least due to the fact we manufacture the vast majority of building materials in the UK which provides resilience, skilled jobs and fast returns on investment. The upstream and downstream jobs in manufacturing, architecture, planning, engineering, distribution and construction, creates an unrivalled multiplier that can achieve inclusive growth, building back better and helping to rebalance our economy. Saving lives must remain our priority but we now have the signal to begin to safely unlock and begin the long path to economic recovery. Construction and the building materials manufacturers are now returning to work with the proper safeguards in place. We must now “Get Britain Building” and “Get Britain Working” delivering the scale of economic multiplier the county needs to bounce back stronger.”

Research carried out in 2018 by Birmingham City University and The Building Alliance calculated that building 300,000 homes a year using, as much as possible, British-made building materials and local builders, would generate an economic ‘uplift’ of more than £90 billion for the UK.

Dr Steve McCabe said, “Covid-19 has resulted in the loss of over 50,000 lives. The Government, quite rightly, locked the nation down to reduce the spread of the virus. However, recently published ONS (Office for National Statistics) data for GDP (Gross Domestic Product) in March clearly demonstrates that effectively closing down the economy through ‘lockdown’ has caused profound economic shock. It’s estimated that at least £2bn a day is being lost during the pandemic. The overall cost to the UK economy will exceed £300 billion and, depending on the speed of recovery, could be significantly higher. As and when it is safe to do so, a return in construction activity as well as the building materials manufacturing supporting it will underpin a fast and effective way to begin to begin the process of recovery from what is the greatest shock to the UK’s economy in living memory.”

Source: Birmingham Updates