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UK construction sector suffers worst output in 10 years

Activity in the UK construction sector “dropped like a stone” last month as suffered its steepest fall in output since the height of the financial crisis, according to a closely followed industry index.

Construction activity plummeted to its lowest level since April 2009 in June, on the back of the sharpest drop in UK housebuilding demand for three years.

IHS Markit’s UK Construction Purchasing Managers’ Index (PMI) revealed that total construction activity fell to a reading of 43, sharply down from 48.6 in May.

Anything below a measure of 50 marks a decline in activity on the PMI index.

Commercial construction dropped for the sixth month in a row, recording its steepest fall since December 2009 in the process.

Construction firms told IHS Markit that delays to projects as a result of Brexit uncertainty had hurt commercial activity, leaving it the worst performing area in the sector.

Civil engineering output also declined at the quickest rate since October 2009. Political uncertainty, delays to new projects and longer waiting periods for the award of new contracts all hurt activity.

Meanwhile new orders dried up, sinking to their lowest level in a decade.

“Purchasing activity and new orders dropped like a stone in June,” said Duncan Brock, group director at the Chartered Institute of Procurement & Supply.

“This abrupt change in the sector’s ability to ride the highs and lows of political uncertainty shows the impact has finally taken its toll.”

IHS Markit pointed to “weakness across the board”, but warned that political uncertainty over whether the UK leaves the EU with a deal or not has spread to the housing market.

It came as UK house prices endured another “subdued” month of growth, according to today’s Nationwide house price index.

Tim Moore, associate director at IHS Markit, warned the figures were so bad it was “almost impossible to sugarcoat” the industry’s performance.

“While the scale of the downturn is in no way comparable that seen during the global financial crisis,” he said, “the abrupt loss of momentum in 2019 has been the worst experienced across the sector for a decade.”

Sterling fell 0.22 per cent against the dollar to $1.261 this morning.

The UK’s manufacturing sector recorded its worst month in six years in June, IHS Markit said yesterday.

By Joe Curtis

Source: City AM

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Homes England delivers four year high of housing completions

From 1 April 2018 to 31 March 2019 there were more houses being built and completed, including affordable homes, Homes England’s housing statistics have shown.

There were 45,692 housing starts, the highest level for nine years, and 40,289 housing completions delivered through Homes England programmes, excluding London, the highest for four years.

Some 30,563 or 67% of housing starts on site in 2018-19 were for affordable homes, up 10% year-on-year and the highest for five years.

Mark Dyason, managing director of the development finance specialist, Thistle Finance, said: “Based on this evidence, homes in England are finally starting to be built in earnest.

“For housing start levels to be the highest in nine years, despite the ever-present uncertainty of Brexit, shows there’s hope for the property market yet.

“So extreme is the supply deficit that developers are proceeding with projects as they feel hedged against the political headwinds. Crucially, homes are not just being built in greater numbers but are selling in greater numbers, with the increase in affordable housing especially welcome.

“Help to Buy is attracting growing criticism at present but it has without doubt had an impact on purchase levels in recent years. It helps that for experienced and financially strong developers there are opportunities aplenty and no shortage of finance options.

“While there is political stasis, the development finance market remains fluid and this is showing through in these strong numbers.”

Some 17,772 affordable homes started in 2018-19 were for affordable rent, an increase of 4% on the 17,159 started in 2017-18. A further 11,560 were for intermediate affordable housing schemes, including Shared Ownership and Rent to Buy, 24% more year-on-year.

The remaining 1,231 were for social rent, a decrease of 12% on the 1,406 started in 2017-18.

Of the affordable homes started in 2018-19, the highest delivering programmes were: Shared Ownership and Affordable Homes Programme (SOAHP) with 89%, up from 71% in 2017-18, and the Affordable Homes Programme (AHP) with 4.6%, down from 21% in 2017-18.

Some 28,710 (71%) of housing completions in 2018-19 were for affordable homes, 11% more year-on-year and the highest for four years.

In addition, 18,895 affordable homes completed in 2018-19 were for affordable rent, 4% fewer than the year before. A further 8,854 were for intermediate affordable housing schemes, including Shared Ownership and Rent to Buy, an increase of 75% on the 5,069 completed in 2017-18.

The remaining 961 were for Social Rent, a 1% reduction on the 970 completed in 2017-18. Of the affordable homes completed in 2018-19, the highest delivering programmes were the SOAHP 2016-21 with 55% and the AHP 2015-18 with 39%.

Joseph Daniels, founder of modular developer Project Etopia, added: “Homes England are taking on the housing crisis with a sustained dose of horsepower.

“The nine-year high in its house building rate sends a clear signal that it has built up a head of steam, which is helping to propel the market and housing supply forward.

“Good progress in the past four years, with starts rising year-on-year, takes its building levels almost back to the high seen just after the financial crisis although there is still a long way to go to satisfy the existing deficit.

“All eyes are on this rebound, in the hope it marks the start of a concerted push to new levels of affordable home building in England, coinciding as it does with a renewed political focus on the housing crisis in recent years.

“Although the government’s overall pace of building remains roughly 10,000 homes off target, Homes England could make considerable inroads here and close this gap significantly over the next few years.”

By Michael Lloyd 

Source: Mortgage Introducer

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UK construction market suffers sharpest decline since March 2018

Business leaders across the UK construction industry have blamed a combination of political uncertainty and Brexit for the gloomy figures in the latest IHS Market / CIPS UK Construction Total Activity Index report.

The report stressed that business optimism amongst the construction industry is its weakest since October 2018, with survey respondents also widely citing concerns that domestic political and economic uncertainty would dampen business activity growth over the next 12 months.

The reports key findings include:

  • Another fall in construction output in May means the sharpest decline since the snow-related downturn in March 2018.
  • Commercial work remains the weakest performing category, with output falling to the greatest extent since September 2017.
  • The sharpest decline in workforce numbers since November 2012.

Tim Moore, associate director at IHS Markit, said: “May’s data reveals another setback for the UK construction sector, as output and new orders both declined to the greatest extent since the first quarter of 2018. Survey respondents attributed lower workloads to ongoing political and economic uncertainty, which has led to widespread delays with spending decisions and encouraged risk aversion among clients.”

Duncan Brock, group director at the Chartered Institute of Procurement and Supply, said: “With the continuing uncertainty around Brexit and instabilities in the UK economy, client indecision affected new orders and particularly affected commercial activity. Policymakers will need to pull a large rabbit out of the hat, and fast, to improve these difficult conditions and prevent a further entrenchment of gloom and contraction this summer.”

Blane Perrotton, managing director of property consultancy and surveyors Naismiths, said: “There is precious little to cheer in this altogether bleak PMI report. New orders, confidence levels and recruitment are all down. Housebuilders have managed to keep growing, just. But their modest expansion in output has been dwarfed by the declines in commercial property and infrastructure building. While the residential sector is stoically grinding on, the industry as a whole is running to stand still. With investor confidence being pummelled by a double whammy of Brexit and political uncertainty, what work there is dominated by the completion of existing projects rather than new ones.”

Jonathan White, UK head of infrastructure, building and construction at KPMG, said: “The steady stream of infrastructure work across the UK had strengthened order books and buoyed confidence, but there is a clear sense that the market is slowing down in the commercial sector as the Brexit impasse puts a halt on decision-making. The hope is that the forthcoming Infrastructure Finance Review, for which the consultation closes later this week, will offer some clarity on how to finance the projects that will feed contractors’ pipelines in the future.”

Mark Robinson, Scape Group chief executive, said: “The lack of clarity over the future leadership of the current government is hurtling us into uncertainty. We thought progress in infrastructure and safeguarding the future of the construction industry was a low priority before. It will be even further from ministers’ minds now. This government won its mandate on a commitment to invest in UK plc, ensuring the country continues to attract business and good jobs across the whole country. But now a reluctance to spend and a lack of decision making is holding the UK back, stopping the country reaching its potential.

“The only way to increase confidence is to treat today’s economic and political climate as the new normal. That means we need to get on with the business of building. Firms should take advantage of the easing of raw material costs while they can and press ahead with planned projects. Only then can we ensure that this weak period for the sector does not turn into a prolonged and painful slump.”

By Rob O’Connor

Source: Infrastructure Intelligence

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New homes set for Nottingham city centre

Twenty new homes are being built in The Meadows area of Nottingham which will go to local families on Nottingham’s council house waiting list.

On behalf of Nottingham City Council – Nottingham City Homes (NCH) and contractor Woodhead Group will develop the homes on the site of the former Clifton Miners Welfare on Ainsworth Drive.

The two-bed houses are expected to be completed in spring 2020.

After planning permission was approved last year, these new homes are the latest for the Meadows area which form part of the city’s Building a Better Nottingham programme and follow the completion of 55 homes in June 2018.

Nick Murphy, chief executive at Nottingham City Homes, said: “There has been significant regeneration in the Meadows and we have invested in creating new homes there over the last few years. We are now creating a further 20 good quality new council homes – homes that people can be proud of and that they want to live in.

“Not only is it a busy year for us in terms of developments, we are also celebrating 100 years of council housing, when councils were first given the task of developing where it was needed. A hundred years later this is still our vision; we want to build warm and secure family homes that the people of Nottingham can afford to live in and these new properties will be no exception”.

Cllr Linda Woodings, portfolio holder for planning and housing at Nottingham City Council, said: “Working together with Nottingham City Homes and other partners, we are transforming Nottingham’s neighbourhoods, by regenerating sites which are no longer fit for purpose and replacing them with new, warm, safe and quality homes.

“Together we’re giving sites like the one in the Meadows a new purpose whilst creating opportunities for jobs and training and providing much needed housing which Nottingham people can afford to buy or rent in communities where people want to live and work”.

Leo Woodhead, director at Woodhead Group said: “Nottingham City Homes and Nottingham City Council share our commitment to deliver social value while building quality new homes. Having delivered the first ever CCS housing UltraSite together, we learned a lot and are really looking forward to working closely with the community and our supply chain partners to create a better experience for all.”

By Sam Metcalf

Source: The Business Desk

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This is where 6,800 homes could be built in Tunbridge Wells borough

Tunbridge Wells town would be better protected from large scale new house building if the council proposal goes ahead to put 6,800 homes at Tudeley and Paddock Wood.

The controversial proposal for the tiny village in the heart of the countryside and the small town were officially unveiled this week to parish councils.

Residents were getting to grips with the shock of the proposition put forward by Tunbridge Wells Borough Council. which is grappling with a housing target more than doubled by the Government, to reach 13,500 new homes in the 20 years up to 2036. This is around 680 each year.

But while two areas could be changed forever during a timescale council leader Alan McDermott put at “probably 25 years” – Tunbridge Wells, which for years has seen controversial infilling, office conversions to residential, sizeable brownfield developments and new estates built or under way, might get something of a breather.

The proposals are in the draft Local Plan which will go out for public consultation in the early autumn.

Head of planning Steve Baughen said: “These strategies reduced the impact on the area of outstanding natural beauty compared to some of the other potential options, for example a more dispersed pattern of development across the borough.

“Similarly, this option does not add such intense pressure to the existing infrastructure as much as other options would – for example, if the vast majority of the development were to be around the main urban area, Tunbridge Wells and Southborough.”

Mr McDermott said new infrastructure, potentially including schools, drainage, utility links, a road off the A228, doctors’ surgeries and employment development, would be built as part of the Tudeley and Paddock Wood proposal.

Talking of the council’s track record in Tunbridge Wells as the planning authority, Mr Baughen said: “We always look to prioritise previously developed land and the redevelopment of previously developed land but as you are seeing, a lot of the sites which have been identified as suitable for redevelopment sites in the previous Local Plan and the Site Allocation Local Plan now have planning permission or indeed are being built out.”

 Why so many homes? 4,000 in Paddock wood and 2,800 here in Tudeley. Tunbridge Wells borough has to build 13,000 new homes but why 6,800 in a four square mile radius? What about the rest of the district
‘Why so many homes? 4,000 in Paddock wood and 2,800 here in Tudeley. Tunbridge Wells borough has to build 13,000 new homes but why 6,800 in a four square mile radius? What about the rest of the district?’ asked resident Petrina Lambert (Image: Lewis Durham)

He added: “This is a finite resource but this Local Plan looks again to make sure that suitable sites within the urban areas are being identified and allocated but a number of them have permission already.”

Petrina Lambert, who lives in Brampton Bank, Tudeley, said: “Our first reactions were shock, distress, upset then extremely angry.

“The whole idea made us feel sick. We moved here to live in a rural community that was now going to be destroyed.

“Why so many homes? 4,000 in Paddock Wood and 2,800 here in Tudeley. Tunbridge Wells borough has to build 13,000 new homes but why 6,800 in a four square mile radius? What about the rest of the district?

“There is also the development at Woodgate Way in Tonbridge only two miles away and no infrastructure in place to support this and a new development with a sudden and large increase in this area’s population.

“It is the destruction of a small and happy community and that of an area of outstanding natural beauty that upsets us most and there are not the right words to describe the loss.”

 Head of planning Steve Baughen said: “These strategies reduced the impact on the area of outstanding natural beauty compared to some of the other potential options, for example a more dispersed pattern of development across the borough.
Head of planning Steve Baughen said: “These strategies reduced the impact on the area of outstanding natural beauty compared to some of the other potential options, for example a more dispersed pattern of development across the borough. (Image: Christopher Furlong/Getty Images)

The Local Plan will go out to public consultation

The original housing target of 6,000 new homes for Tunbridge Wells was more than doubled by the Government to 13,500 during the past few years.

The Local Plan, an evergreen and constantly updating document, is in its 2016 to 2036 planning period.

In order to work out how many homes need to be built in the future, the council must take account of the housing which has already been built or permitted since 2016.

This leaves 9,000 homes – and the council is putting forward Tudeley, which is little more than a large cluster of homes, and Paddock Wood, which had a 8,253 population in 2011, for around 6,800 of them.

The explosive proposal was unveiled officially to parish councils on Monday and Tuesday nights, although the borough council said it had been working with the parishes behind the scenes.

The council said by building homes on such a large scale rather than ad hoc, proper planning could go into infrastructure.

The Local Plan will go out to consultation in September/October and again a final consultation on the final Local Plan next September before submission to the Planning Inspectorate in December 2020. It will be examined formally in the spring or summer of 2021.

By Mary Harris

Source: Kent Live

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New housing and more schools feature in ‘vision for the future’ for East Renfrewshire

A VISION of how East Renfrewshire will develop over the next 10 years has been set out by council chiefs.

Councillors will consider a draft strategy outlining the local authority’s long-term ambitions at a meeting today.

The revised ‘Vision for the Future,’ originally launched in 2015, reveals how the council will address five key outcomes.

These are early years and vulnerable young people; learning, life and work; environment and economy; safe, supportive communities; and older people and people with long-term conditions.

A report to councillors states: “East Renfrewshire is a modern, ambitious council, creating a fairer future with all. Our mission is simple: to make lives better for the growing numbers of residents who choose to live here.

“East Renfrewshire, however, faces many of the same challenges as the rest of Scotland over the next 10 years.”

These challenges include population growth, changes in the world economy, climate change and rapid developments in technology.

“The financial landscape for the public sector has become increasingly challenging, with councils having to find significant year-on-year savings while continuing to deliver services that meet the growing and more complex needs of local people,” the report adds.

In East Renfrewshire, this has meant making savings of over £54million since 2011, with a further £22m to be made by 2021.

Over the next decade, the council plans to significantly expand nursery provision, increase support for young people with additional support needs and ensure fewer children and families are in the care system.

The draft strategy states that increasing demand for places in schools will see a growth in the number of classrooms.

The council also wants East Renfrewshire to be a key tourist destination, with better rail and bus services and improvements to park and open spaces.

In addition, it plans to build at least 4,350 houses by 2029.

Vision for the Future also commits to continuing work to reduce CO2 emissions, as well as encouraging electric cars and ensuring any new-build housing is as energy efficient as possible.

And, for older people, there will be a shift away from hospital wards to community alternatives for those who require long-term or round-the-clock care.

Source: Barrhead News

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UK construction buoyed by house-building: surveys

UK construction industry is being shielded from the uncertainty about Brexit by modest growth in house-building, industry surveys showed on Thursday.

Builders registered 37,672 new homes for warranties and insurance from the National House-Building Council (NHBC) between January and March, up 3 percent compared with a year earlier.

NHBC’s figures, which cover 80 percent of the new homes market, are viewed as a lead indicator for the housing sector.

Separately, the Royal Institution of Chartered Surveyors (RICS) said private house-building supported the otherwise subdued construction industry, with overall confidence at an almost six-year low.

While the commercial construction sector has been hurt by falling business investment ahead of Brexit, efforts to narrow a shortfall in the number of residential homes on the market has helped the house-building sector.

Construction represents about 6 percent of British economic output.

“We are pleased to report good numbers for the start of the year, although we do need to bear in mind the situation 12 months ago when freezing conditions caused major hold-ups in registrations as well as build-rates across the bulk of the UK,” NHBC chief executive Steve Wood said.

Uncertainty around Brexit had caused “some dampening” of the housing market for new homes in early 2019, he said.

Prime Minister Theresa May has failed to get her European Union divorce deal through parliament, forcing her to delay the original Brexit date of March 29. A new deadline has been set for Oct. 31, more than three years since the 2016 referendum.

House-building was the only source of growth for Britain’s construction industry during the first three months of 2019, according to the most recent purchasing managers index from IHS Markit/CIPS. The survey for April is due at 0830 GMT.

Reporting by Andy Bruce; Editing by William Schomberg

Source: UK Reuters

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Plans for council homes at former Dumbarton school approved

Plans to build 55 affordable new council homes on the site of the former primary school site in Dumbarton have been approved by councillors.

The 1.9-acre area has been empty since the former Aitkenbar Primary School was demolished in 2016, following its relocation to a purpose built shared campus nearby.

The new development will see the site transformed into mixed housing including 24 one-bedroom flats, two-, three- and four-bedroom semi-detached houses, two three-bedroom accessible bungalows and four-bedroom detached homes.

A tree-lined road will be formed through the centre of the site, from Howatshaws Road, and a new footpath will connect the site with the adjacent children’s play area and woodland path.

At a meeting of West Dunbartonshire Council’s planning committee yesterday, councillors were also told how new tenants in the homes would benefit from a community garden, which will have shrubs, a seating area, and community art designed in partnership with local schools and an artist.

Councillor Diane Docherty, vice chair of the planning committee, and convener of housing and communities, said: “I was really impressed with the plans for the new use of this site. It has been well thought out to ensure that this new development can fit in with the existing community and I’m sure it will bring a great deal of benefit to the surrounding area.

“The facilities on offer, including the Community Garden and its close proximity to schooling, is bound to make this site very popular when complete.

“We are committed to providing affordable and efficient new homes for our residents, and it is exciting to see how this development will take shape.”

Source: Scottish Construction Now

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New Wrexham developments feature as part of £63m affordable housing plans across region

A social housing provider has unveiled plans for new developments in Wrexham County Borough.

Clwyd Alyn says it is set to create 380 affordable, sustainable homes for local people across the region costing around £63 million.

The developments have been financed with £37 million of Welsh Government funding secured in partnership with local authorities, together with private finance arranged by Clwyd Alyn.

In Wrexham this involves new developments in both Pontfadog and the Brymbo areas.

Clwyd Alyn, which currently manages over 6,000 homes and employ more than 700 people across seven county areas, completed a total of 277 new homes and one community hub in the last financial year, including 200 specialist extra care apartments across North Wales.

Locally this includes Maes y Dderwen, a million pound extra care housing scheme for older people in Wrexham, which welcomed its first tenants in 2018.

Located on Grosvenor Road near the town centre, it is specifically designed for local people aged 60 or over who wish to live independently in a home of their own with the peace of mind of 24-hour access to care support.

The total number of homes developed by the organisation over the last two years, combined with those currently being built, or proposed for the years ahead, represents a total investment of £221 million covering the creation of a of 1,435 homes.

Commenting on both current and future developments locally, Craig Sparrow, executive director of development for Clwyd Alyn said: “In Wrexham County last year we completed Maes Y Dderwen, a state-of-art extra care development with 60 apartments, promoting independent living for older people and we’ve recently also welcomed new residents to a development of 50 general apartments in Rivulet Road.

“We’re also currently creating new homes in Pontfadog and we are proceeding with proposals for 70 homes in Brymbo.”

Clare Budden, group chief executive of Clwyd Alyn added: “We know there is a significant shortfall of social and affordable housing across Wales, with increasing levels of homelessness, growing waiting lists and too many people living in poor quality and short-term housing.

“We are working in partnership with local authorities and other agencies and working hard to deliver our mission; – ‘Together to beat poverty.’

“We firmly believe that by building new affordable homes, working in partnership, and through delivering a range of support services, we can encourage and help people to live well and build their own strong communities.

“We have a total of 792 homes either completed during the last two years, in progress, or about to start on site. We have proposals for another 643 homes for the years to come, representing an overall investment total of £221 million and 435 homes.

“We would like to thank the Welsh Government and all our Local Authority partners from across the region for their support in helping us to provide these vital homes bringing hope and joy to local people for generations to come.”

Source: Wrexham

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Affordable homes to be built on site of former sports club

Work is under way to build 48 new affordable homes on the site of the former Barton Lane Sports and Recreation Club in Eccles, Salford, which had sat unoccupied since November 2016.

ForHousing is transforming the disused site at Barton Lane into 48 modern apartments for affordable rent, comprising 24 one-bedroom and 24 two-bedroom homes.

The landlord owns and manages 24,000 homes across the North West of England, in Fylde, Knowsley, Oldham and Salford, and provides housing management services on behalf of Cheshire West and Chester Council.

Mangrove Estates is the developer on the site with Watson Homes responsible for the build and Grays Architecture leading on the scheme design.

Nigel Sedman, group director of homes said: “It’s really good news that the Barton Lane development has started on site.

“It will provide greatly needed affordable homes for 120 people and takes our investment into new homes in Eccles to over £20m.”

He added: “At ForHousing we are committed to building high-quality homes, stronger neighbourhoods and working together with tenants to make more things possible for more people.

“In the North West we have developed over 900 new homes to date across a mix of tenures and will be building a further 540 by 2020.”

The Barton Lane development is part funded by a £1.68m grant from Homes England. It is earmarked for completion by Winter 2020.

By Neil Hodgson

Source: The Business Desk