Tag Archive for: construction

Housing

House-building starts down 8% year-on-year

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In the second quarter of 2019 new build dwelling starts in England are estimated at 37,220 units (seasonally adjusted), which is a 2% decrease compared to the first quarter and 8% down year-on-year.

New house-building starts are 24% below their peak in Q1 2007 but 117% per cent above the trough Q1 of 2009.

According to the numbers released by the Ministry of Housing, Communities & Local Government, annual new build dwelling starts totalled 160,640 in the year to 30th June 2019, a 1% decrease on the previous.

During the same period, completions reached 173,660 in the year to June, an increase of 8% on the previous year.

Secretary of state for housing Robert Jenrick preferred to focus on the rise in completions rather than the fall in starts. “The data released today is hugely welcome, with the number of new homes built reaching an 11-year high,” he said. “We are moving in the right direction, but there is still much more to do if we are going to deliver the numbers needed by communities up and down the country.”

Clive Docwra, managing director of construction consultant McBains, said: “Today’s figures show the amount of new homes being started or completed are still nowhere near the number required to meet the government’s target of building 300,000 homes a year by the mid 2020s.

“Brexit uncertainty continues to bite, with many housebuilding projects on hold until the picture on the UK withdrawal from the EU becomes clearer, while the weak pound means the high cost of imported materials is holding back construction.

“Demand for housing is far outstripping supply, but today’s figures prove there is still no light at the end of the tunnel in terms of solving the housing crisis.”

Source: The Ministry of Housing, Communities & Local Government

Source: The Construction Index

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Recession fears as EU workers leave the UK

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There are clear signs that the construction sector is bracing itself for a downturn.

According to the Federation of Master Builders (FMB), an independent, non-profit trade association that represents 8,000 small- to medium-sized building firms, companies are already reducing their headcount of direct employees in favour of subcontractors who are easily removed if the work dries up.

The FMB’s most recent State of Trade survey showed that employment among construction SMEs had dropped for the first time in more than five years.

“Their thinking is that if the worst happens and a recession hits later this year, they need the size of their workforce to be flexible in order for their firm to survive,” said Arthur McArdle, the FMB’s national president. “However, this strategy is not without risk, as if construction bosses are employing more subbies, they might not always be certain of their quality. Rebalancing the workforce may seem like a good idea at the time, but it could lead to reputation-damaging mistakes.”

Another body, the Home Builders Federation (HBF). meanwhile. said however that delays in the planning process and a lack of available land were of more concern at the moment to its members, who account for 80% of all new homes built in England and Wales.

Buyer confidence was cited in March as a major constraint by only 7% of members of the Home Builders Federation (HBF), well down on the 48% who said it was a challenge of a similar scale at the end of last year.

Stockpiling, which has been taking place in other sectors ahead of Brexit, is meanwhile less of an indicator in the building trade. Smaller and medium-sized companies do not have the necessary storage space in the first instance. When shortages have occurred, such as problems in relation to bricks last year, they have been rectified relatively quickly.

Results from a survey of over 10,500 construction workers carried out by recruiter Randstad has revealed that one in three EU nationals have considered leaving the UK because of the Brexit referendum.

The truth is that it’s the potential drop in construction projects, subsequent funding, and availability of jobs that’s the biggest driving force influencing the 39% who are expressing concern. This is followed by uncertainty over trade deals with the EU (19%), new findings suggest.

A no-deal Brexit raises the prospect of delays and cost increases, as employers face difficulties to get vital EU workers to UK building sites, threatening timing of projects. With 7% of construction workers in the UK and over a quarter of London’s construction workforce coming from other EU countries (ONS), plus the £10bn (15%) of building materials coming from the EU, it’s clear that action needs to be taken. The good news is that there is still time to make a difference and retain highly-skilled workers.

As the country gets closer to withdrawing from the EU, it is becoming clearer that employers and employees are sceptical of what the industry will look like later this year in terms of workforce and materials supply. Of all of those surveyed, one fifth admitted that they have considered leaving the country amid Brexit uncertainties.

 

Source: The Guardian / Showhouse.co.uk

hm revenue

How will the October VAT change affect the construction industry?

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Construction workers are calling upon chancellor Sajid Javid to delay VAT changes which many say will cripple firms’ cashflows this autumn.

In June, the government published guidance about the so-called reverse charge on the way VAT is collected in the building and construction industry.

It comes into effect on 1 October and will see the customer receiving the services having to pay the VAT due to HMRC instead of paying the supplier – meaning companies will no longer receive their 20% VAT payment when they submit their bills.

HMRC said it has introduced the change to crack down on companies charging and collecting VAT payments before disappearing and owing the taxman.

But critics say the new rules will hit firms’ cashflows and push many into the red as they struggle to keep up with payments to HMRC.

Last week 15 trade bodies, including the Federation of Master Builders, the Federation of Small Businesses and the Civil Engineering Contractors Association (CECA), wrote to Javid asking him to push back the changes by at least six months.

The British Constructional Steelwork Association said firms with a turnover of £15m could be hit with a negative cashflow of £262,500 by month three of the charge.

“This could be the end for many subcontractors who are already experiencing late payment, difficulties in agreeing final payment amounts,” said the group’s director-general Sarah McCann-Bartlett.

CECA chief executive Alasdair Reisner said: “Civil engineering contractors are extremely worried about the impact of the forthcoming new rules on their immediate cashflow and the impact that this will have on business sustainability. Small contractors do not have the resources to manage the immediate impact of the legislation change.”

In its June guidance, HMRC admitted: “HMRC understands that implementing the reverse charge may cause some difficulties.”

But it told firms: “[We] will apply a light touch in dealing with any errors made in the first six months of the new legislation, as long as you are trying to comply with the new legislation and have acted in good faith.”

For information on the changes and what you need to know, please click here

Source: building.co.uk

carbon

Zero carbon by 2050?

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The UK is to become the first G7 nation to set a legally-binding target to achieve net zero carbon emissions by 2050.

Prime Minister Theresa May announced Government will tomorrow lay a statutory instrument before Parliament that will amend the Climate Change Act and introduce a  net zero emission target.

Presently the country is committed to cut greenhouse gas emissions by 80% by 2050.

According to the Committee on Climate Change, which recommended the move in its recent report, the industry has little more than 10 years to take all new buildings over to net zero carbon if the goal is to be met.

The commitment will also need wholesale changes to energy generating infrastructure and big changes to new buildings and improvements to existing buildings.

This will require a switch away from fossil-fuel based heating, increasing the energy efficiency of the building stock, and improving the energy efficiency of lighting and electrical appliances.

It will also necessitate the widespread use of heat pumps to replace boilers and accelerating district heating and hydrogen technologies.

Julie Hirigoyen, Chief Executive at UKGBC said: “This is a powerful and positive move by the Prime Minister that will give her time in office a legacy beyond Brexit.

“UKGBC knows that the built environment contains some of the biggest opportunities to slash emissions.

“We must accelerate action in all areas including improving the efficiency of our aging building stock, and overcoming the challenge of decarbonising heat.

“To do this, we need to see both policy and industry leadership to ensure the built environment is at the vanguard of emissions reductions. There is no time to lose, now is the time to act.”

Paul Reeve, director of the Electrical Contractors Association, said: “No-one should expect the feat of resolving the UK’s carbon footprint to be anything other than daunting, but the Government has issued a truly remarkable response to the ‘zero carbon’ challenge set out by the CCC in May.

“The task ahead is immense: the UK is drastically short of the infrastructure, supply and installation capacity needed to introduce low-carbon building heating at scale.

“There are also major ‘low carbon’ skills gaps across building design, construction and installation. We also need to ensure that whatever happens in the years ahead delivers the quality and performance necessary for whole-life low carbon buildings.”

Building upwards will bring big benefits

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With the government’s recent revisions of the National Planning Policy Framework (NPPF), it is now easier for homeowners and developers to create homes above existing residential and commercial properties. Since these revisions, rooftop home developers have received funding to generate much-needed affordable homes across the UK.

Insulation Express have uncovered the benefits of building upwards, from saving the Green Belt to overcoming the current housing shortage, and why this could create a future trend in construction.

Building upwards could heighten the development growth in dense cities

The shortage of available properties has long been recognised as an issue affecting our society but building upwards could ease the demand in areas with less space and at a faster pace. In dense urban areas where there is a lack of development sites, rather than forcing people out of the city, upward extensions could allow people to live and work in city centres.

To see where there’s a demand and opportunities for development growth, Insulation Express analysed just how many people share a sqm in cities of the UK.

Surprisingly, Brighton and Hove has 10 people packed into just a sqm, even more than London (seven people per sqm). In such a densely packed city, there are limitations on where to build, but skyward extensions could be hugely beneficial in this seaside town.

There has also been a wider focus on the capital of the housing crisis, London, with seven people per sqm. Most London residents have the option of crippling rent prices or long commutes from outside London. According to the developers a whopping 180,000 rooftop homes could be created in London, even housing up to 720,000 people.

Notably, Liverpool is one of the least dense cities, with just four people sharing a sqm, yet the city has the most expensive plots.

Upward extensions could boost the productivity of the UK’s construction sector by 50%

Research has identified a critical challenge in the industry – a shortage in the workforce, and this was before the UK voted to leave the EU.

As of May 2019:

  • The total workforce is made up of 90% UK nationals, 7% EU nationals and 3% non-EU nationals.
  • Construction workers in the UK are ageing – Nearly half (47%) of UK nationals are aged 45 and over.
  • In comparison, non-UK nationals are much younger, with those aged 45 years and over making up 18% of the workforce.

Unfortunately, once we leave the EU, this shortfall could end up being worse as it becomes difficult for EU workers to live and work in the UK.

This shortage coupled with the fact that the UK’s construction industry already lags behind in productivity (15% less than Germany and 25% less than France), means the UK urgently needs to solve its issues.

But rooftop homes could be the answer. Generally, upward extensions use the modular construction process. This means building the home off-site before craning the property on top for less disruption. These techniques are massively quicker and require less workers. With new legislation making it easier to gain planning permission for building above, we could see the UK’s construction productivity grow by 50%.

How building up could stop the rapid increase (34% in two years) of homes on the green belt

The Green Belt is the neighboring countryside for more than 30 million people, covering 13% of the land in England – 1,639,560 hectares to be exact. However, the pressures on Green Belt land are mounting – there are calls for reforms to release the land in the UK to ease the housing demand.

For many, the loss of Green Belt land is also the loss of an escape from urban life, that’s why this countryside is generally protected. While building on this land is supposed to be extremely difficult to get planning permission. But since 2013, there has been a 62% increase in the loss of greenfield Green Belt (part of the Green Belt that previously, had not been built on before). Just in 2017/18 alone, there was huge 34% increase of residential units on Green Belt land.

The number of homes proposed to be built on Green Belt land has increased from 425,000 in 2017 to 459,000 in 2018, that’s an 8% rise in just one year. With the increased demand of homes needing to be built threatening our Green Belt further, one solution could be building above. London needs 66,000 homes a year, yet 22% of the land is designated Green Belt – upward extensions could allow developers to alleviate housing pressures without restrictions.

Rooftop homes can reduce construction waste by up to 90%

The majority of rooftop developers use modular homes to create these extensions. This is a major advantage in itself, especially to our environment. Why? Modular homes use marginally less materials than traditional construction, which makes them quicker to build and less damaging to the environment.

Traditional methods of construction normally use a vast array of materials (400 million tons each year), much of which has a negative impact on the environment, due to the emissions created when manufacturing these materials. But another damaging effect of this is the waste, the industry wastes 120 million tons of material per year and accounts for almost a third of the UK total of waste production.

Off-site construction for upward extensions helps the industry battle this. Modular homes use less materials in general and with modular construction being built off-site, in a controlled environment, using standard sizes and even layouts, this means this method can reduce waste by up to 90%.

The challenges of building upwards

Even with all these advantages, there are certain limitations, mainly because it means you are building on top of an existing structure. This presents various design challenges and you need to ensure the existing property is structurally sound. Not least that you have to generate a solution that creates a useful space without interfering with the function of the existing development.

Developers also need to abide to planning regulations despite the new planning permissions for building upwards. Neighbouring properties have the right to object to proposed building plans if they believe it infringes on their rights, which could mean anything from lack of light to nuisance, this all falls under the Party Wall Act of 1996.

Source: buildingproducts.co.uk

Construction growth

SME contractors agree 2.75% pay deal for workers

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Employers and unions have agreed a 2.75% pay rise for construction workers under the Building and Allied Trades Joint Industrial Council (BATJIC) agreement.

The increase is below last year’s 3.1% rise and will come into effect from June.

The one-year-deal follows successful talks between the the Federation of Master Builders (FMB) and Unite the union.

BATJIC has also secured tax dispensation from HM Revenue and Customs for Lodging Allowance and Daily Fares Allowance for this year’s Working Rule Agreement after several years’ hiatus.

The deal in detail:
• BATJIC has agreed a one-year deal involving a 2.75% pay rise over the next year;
• All apprentices and trainees will also benefit from a 2.75% pay increase;
• The adult general operatives’ rate increases by 26p per hour to £9.78;
• The NVQ3 advanced craft rate increases by 34p per hour to £12.79;
• The changes will come into effect as of Monday 24th June 2019.

Brian Berry, Chief Executive of the FMB, said: “This agreement strikes the right balance as it recognises the hard work that employees are putting into their work but at the same time, it reflects the uncertainty that many construction firms are facing.

“This increase is above last year’s rate of inflation, according to all three of the leading indexes, and sends out a strong message to tradespeople that we value them and want to retain them.

“It’s no secret that economic forecasts are quite conservative for the years ahead, given the unknown impact of Brexit, but I feel this is a good compromise from the perspective of both employers and workers.”

Jerry Swain, the National Officer for Construction at Unite the union, said: “Unite welcomes this agreement which recognises inflation levels from last year and the high employment levels that we have at present.

With construction skills shortages impacting on the industry, a 2.75 per cent pay rise will help encourage tradespeople to remain in the industry at a time when the current political uncertainty and drops in construction output are affecting confidence in the industry.

“I’m pleased that BATJIC has been further strengthened this year by successfully jointly lobbying for tax dispensation on key employee expenses.

“It was important that we secured the dispensation from HMRC in respect of lodge payments, as this now formalises the position regarding taxation of lodge payments.

“The dispensation gives peace of mind to our members and ensures that they will not face any claims for retrospective payment of tax when receiving lodge payments while working away from home.”

Source: Construction Enquirer

22 million

New pre-qualification system aims to save £1bn a year

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Build UK and the Civil Engineering Contractors Association (CECA) have launched the first phase of a new pre-qualification (PQ) system that they claim will cut bureaucracy in the sector.

The trade bodies said the current PQ system is complex and estimated that it costs the industry up to £1bn a year. Currently, the multitude of schemes in operation see around 180,000 specialist contractors producing two million pieces of paper every year for 5,000 contractors, the organisations claimed.

The roll-out of the first phase of their new system, which aims to make the industry more efficient, includes:

Publication of the Common Assessment Standard used to pre-qualify companies. Based on existing PQ questionnaires, including BSI’s PAS 91, this covers 10 key areas and includes desktop and site-based assessment standards.

Confirmation of the first recognised assessment bodies to certify companies against the Common Assessment Standard. These organisations are Achilles, CHAS and Constructionline.

The system is being overseen by an interim cross-industry body consisting of experts from organisations across the sector, including public and private sector clients, contractors and trade associations.

Once the new system is fully up and running, companies will not have to be certified by more than one recognised assessment body. A data sharing arrangement is currently being developed which will allow contractors to obtain PQ information from any one of the recognised assessment bodies. Contractors will be transitioning to the new system over the coming months.

Jo Fautley, deputy chief executive of Build UK, said: “The construction industry is making great strides towards more collaborative working and this new PQ system has been developed by industry, for industry, based on standards that clients, contractors and the supply chain have all agreed on. We look forward to the industry getting on board with it over the coming months so we can realise the efficiency gains for everyone’s benefit and boost overall productivity.”

Marie-Claude Hemming, director of external affairs at CECA, said: “CECA has long advocated an industry standard approach to PQ and the new system which builds on PAS 91 will simplify the process and reduce duplication and cost. Change takes time and there will be a transition period, but this marks the start of the rollout of the new system which we anticipate will play a key role in the future delivery of world-class infrastructure.”

Ann Bentley, chair of the Construction Leadership Council business model workstream, said: “The Construction Leadership Council welcomes and supports the proposed reform of the current PQ process – it is a real and practical way of reducing bureaucracy and improving quality in the procurement process. Companies will be able to demonstrate that they meet an agreed industry standard and clients and contractors will be able to rely on the certification. The CLC will be encouraging adoption of the revised standard throughout Government construction procurement.”

Source: Construction Enquirer

gas heating

Low-carbon heating to replace gas in new UK homes after 2025

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Gas boilers will be replaced by low-carbon heating systems in all new homes built after 2025 in an attempt to tackle the escalating climate crisis, Philip Hammond has said.

In his spring statement, the chancellor said new properties would use alternative systems, such as heat pumps, to help the UK reduce its carbon emissions.

However, Hammond appeared to row back on implementing the full recommendations from the government’s advisory committee on climate change last month, which called for new homes to have no gas for cooking or heating from 2025.

The move away from gas heating in new homes was given a cautious welcome by environmental groups, although they said the chancellor had to be more ambitious, systemic and radical if the government was to get to grips with the climate emergency.

domus

New energy efficient Domus Ventilation MVHR wall units launched

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Domus Ventilation, part of the Polypipe group, has launched the HRXE range of high performance Mechanical Ventilation with Heat Recovery (MVHR) units for small to medium size residential properties.

MVHR systems combine supply and extract ventilation in one system.  They efficiently recover the heat typically lost in waste, stale air and use it to temper the fresh air drawn into the building via a heat exchanger.  The filtered, pre-warmed air is distributed to areas of the home such as living rooms and bedrooms, effectively meeting part of the heating load in energy efficient dwellings.

Building on its success in MVHR, Domus has developed the HRXE units to provide even greater efficiency through advanced heat exchange proficiency and low Specific Fan Power (SFP).  When used with a kitchen and one wet room, at typical installation, the HRXE provides a 90% heat exchange performance and boasts a very low SFP down to 0.57W/(l/s).

The new HRXE range is not only efficient, but also exceptionally quiet, with background (normal) ventilation at 24dB(A) (typically whisper quiet).  Noise reduction can be further reduced through the use of an Anti-Vibration tray, which isolates the unit from the wall to reduce any low levels of vibration induced noise which can be distracting to residents.

There are four models in the HRXE range, all with a two year warranty and all featuring 100% thermal (summer) bypass which automatically activates when the air temperature reaches a pre-set level, allowing in cooler, fresh, filtered air without warming it through the heat exchanger.The smart design of the HRXE means there is no reduction in airflow when operating in bypass mode.

Within the range, models are available with integral humidity sensors, which is much in demand.By accurately measuring air humidity, the HRXE’s extract speed automatically changes from background to boost as the level of humidity increases, thereby providing optimal ventilation performance.

When it comes to installation, Domus Ventilation has designed the HRXE units to be even smaller than their predecessors making them ideal for wall-mounted cupboard installation, with opposite handed models available to meet different on-site requirements. Spigots on the top of the HRXE are 125mm, but with Domus Ventilation’s extensive duct portfolio, adaptors are available to enable direct connection to the most common ducting size – 204x600mm flat channel duct –for quicker and more cost-effective installation.  Furthermore, integrated controls are accessed via a front panel for easy commissioning.

The HRXE range has been designed to work most efficiently when used with Domus duct systems, including its Flow Control Plenum and High Efficiency Green Line Bends, which reduce duct bend resistance by up to 60%.  Domus duct systems offer improved system performance through the exacting tolerances and engineered fit of the system, whereby pressure drops are minimised and air leakage virtually eliminated.

Domus Ventilation has a well-deserved reputation for quality, supported by excellent technical support, from a market leading manufacturer and designer.  It is well placed to offer immediate, practical solutions to Building Regulations Parts F & L.

Source: UK construction week

uk construction

168,500 new jobs to be created

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CITB experts are predicting an extra 168,500 new construction jobs will be created over the next five years despite the uncertainty of Brexit.

The training body’s annual Construction Skills Network (CSN) report anticipates average annual industry growth of 1.3% until 2023.

That is down a third of a percent on last year’s forecast and is based on the scenario that the UK agrees an exit deal with the EU, rather than a ‘No Deal’ Brexit.

Despite the wider economic uncertainty approximately 168,500 construction jobs are to be created in Great Britain over the next five years – 10,000 more than in last year’s forecast.

Construction employment is expected to reach 2.79m in 2023 – just 2% lower than its peak in 2008.

Steve Radley, Policy Director at CITB, said: “Assuming that a deal is agreed, we expect low but positive growth for construction.

“Even as infrastructure slows, sectors like public housing and R&M are strengthening.

“This will see the number of construction jobs increase over the next five years, creating growing opportunities for careers in construction and increasing the importance of tackling the skills pressures we face.”

The CITB and industry trade bodies have published a plan to help brace the sector for tighter migration controls after Brexit.

Building After Brexit: An Action Plan for Industry identifies the need for construction to adopt a twin-track strategy: growing investment in the domestic workforce and driving up productivity, while working with Government to agree how to maintain access to migrant workers to give it the breathing space to adapt.

Recommendations include:

  • Attract talent by raising apprenticeship starts and completions, creating pathways into construction for under-represented groups and providing better work experience opportunities.
  • Retain the workforce by supporting older workers to stay in the industry, upskilling the existing workforce and offering improved mental health support.
  • Be productive by developing a Future Skills Strategy to identify the skills required to modernise the industry, drive digitalisation forward and boost investment in modern methods of construction.

Steve Radley, Policy Director at CITB, sayid: ‘Construction needs a twin-track strategy, increasing investment in the domestic workforce and working with Government to agree how we can maintain access to migrant workers to give it the breathing space to adapt to changing rules.

‘The latest forecast has revealed over 168,000 new jobs will be created over the next five years and with a likely post-Brexit reduction to the availability of foreign workers, the industry must act now to avoid widening the skills gaps.

‘We must do more to attract new talent to the sector and get better at retaining and upskilling the current workforce. Finally, the sector must fully embrace digital skills in order to become more productive and mitigate the widening skills gap.’

Alasdair Reisner, Chief Executive at CECA, said: “The date for leaving the European Union is rapidly approaching and employers are finding it harder and harder to recruit the right people for their business.

“Recruitment is already very difficult for some key roles and this will be exacerbated once migration from the EU is reduced post-Brexit.

“We must work together, as an industry and with Government to target these gaps; boosting UK-based recruitment and training while looking to sensible migration from the rest of the world to meet demand.”

Brian Berry, Chief Executive of the Federation of Master Builders, said: “The single biggest issue keeping construction employers awake at night is the skills shortage.

“If we’re going to address this skills gap post-Brexit, the whole industry needs to step up and expand their training initiatives. Even Sole Traders can offer short term work experience placements and large companies should be aiming to ensure at least 5 per cent of their workforce are trainees or apprentices.

“But realistically speaking, the UK construction sector can’t satisfy its thirst for skilled labour via domestic workers alone.

“With record low levels of unemployment, we’ll always need a significant number of migrant workers too – particularly in London and the south east.

“The Government needs to work with construction to amend its Immigration White Paper and rethink the current definition of low-skilled workers.

“Level 2 tradespeople play a vital role in the sector and would currently be excluded, which is wrong. We urge Ministers to engage with the construction industry to help improve these proposals.”

Source: Construction Enquirer.com