Brexit: UK construction “could lose 8pc of workforce”

Research from the Royal Institution of Chartered Surveyors suggests that the UK construction industry could potentially lose almost 200,000 EU workers post-Brexit.

8 per cent of UK construction workforce comes from the EU, according to the RICS. Post-Brexit, should UK lose access to single market, 176,500 jobs could therefore be under threat, with the industry already facing skills shortages.

RICS has cautioned that for Brexit to succeed, it is essential to secure continued access to the EU Single Market or to put alternative plans in place to safeguard the future of the property and construction sectors in the UK.

Jeremy Blackburn, RICS Head of UK Policy, comments: “These figures reveal that the UK construction industry is currently dependent on thousands of EU workers. It is in all our interests that we make a success of Brexit, but a loss of access to the single market, has the potential to slowly bring the UK’s £500 billion infrastructure pipeline to a standstill. That means that unless access to the single market is secured or alternative plans are put in place, we won’t be able to create the infrastructure needed to enable our cities to compete on a global stage. We have said before that this is a potential stumbling block for the Government, which is working to deliver both its Housing White Paper and Industrial Strategy.”

“A simple first step would be to ensure that construction professions, such as quantity surveyors, feature on the ‘UK Shortage Occupations List’,” adds Blackburn. “Ballet dancers won’t improve our infrastructure or solve the housing crisis, yet their skills are currently viewed as essential, whereas construction professionals are not.”


New apprenticeship standards a “welcome boost” for UK builders

13th March 2017

Apprenticeship standards in construction are set to increase following the Government’s approval for two new apprenticeships in bricklaying and plastering, says the Federation of Master Builders (FMB).

Brian Berry, Chief Executive of the FMB, comments: “We feared that the Government’s ambition to deliver three million apprenticeships by 2020 would lead to an emphasis on quantity over quality. Today the Government has demonstrated that it really is committed to working with the industry to increase the quality of apprenticeship training by approving these new standards. Research by the FMB shows that two-thirds of construction SMEs believe that the overall quality of construction apprenticeships has decreased during the past 30 years. Furthermore, over 70% of small construction firms would be more likely to train an apprentice if the quality of construction apprenticeship standards were improved. Given that it’s construction SMEs that train two-thirds of all apprentices, the Government is right to back the FMB’s mission to increase the quality of apprenticeships.”

David Kehoe, Technical Support and Training Representative at British Gypsum, said: “This is the best thing to happen to the plastering industry for a number of years.”


Half of householders more likely to hire builders who employ apprentices

6th March 2017

Consumers prefer to hire firms that train apprentices, according to new research from the Federation of Master Builders.

The research, which was commissioned by the FMB to mark National Apprenticeship Week in England, highlights the importance of training up younger workers in the construction sector – not just to help tackle the growing concern of workforce levels in the UK’s housebuilding industry, but also to demonstrate a firm’s strong values.

The survey found that almost two thirds of home owners would have a more favourable image of a building firm knowing they train apprentices, while half of home owners would be more likely to actually hire a building firm knowing they train apprentices. More than two in five would also be more likely to recommend a building firm to a friend or family member based on the fact they train apprentices.

Brian Berry, Chief Executive of the FMB, says: “This new research confirms what many of us already knew – apprentices are good for your business. The building industry is extremely competitive and these results suggest that training an apprentice will help a firm stand out from the crowd. Home owners aren’t just concerned about the craftsmanship of their builder, they want to know they are hiring a firm with strong values. It therefore makes sense that a business that invests in young people is seen in a better light. If the burgeoning skills crisis in the construction industry wasn’t enough to motivate those firms not already training to start doing so, hopefully this evidence will do the trick.”

“In construction, two-thirds of all apprentices are trained by SMEs and it is our hope that the new Levy will encourage the larger firms to also engage more readily in training the future workforce,” he adds.


100,000 of London’s construction workforce come from the EU

28th February 2017

New figures show almost 100,000 of London’s construction workforce are from the European Union. What would a Hard Brexit mean for them?

A report released today by the Mayor of London, Sadiq Khan, reveals that more than a quarter of London’s construction workforce is from the European Union – and their future in the UK will be uncertain if the government goes ahead with a so-called ‘Hard Brexit’.

The report sets out that of those working in London’s construction sector – the workforce behind building much-needed new infrastructure, affordable homes and office space in the capital – 95,000 are from the EU.

According to the figures, there are 350,000 people who work in London’s construction sector, of which just over half are from the UK, while 27 per cent are from the EU. The remaining part of the workforce is from other European countries (3 per cent), while 14 per cent is from the rest of the world.

The Mayor today sets out why he believes these figures underline the enormous contribution that Europeans make to London. He has been clear that retaining and having access to a highly skilled workforce is absolutely essential to protecting jobs, growth and tax revenues across Britain over the decades ahead.

The Mayor is also “concerned about the impact Brexit could have on the housing industry, with the government refusing to guarantee the status of EU workers currently living in the UK”.

“London is in the grip of a serious housing crisis – and fixing it is going to be a marathon, not a sprint,” says Khan. “While we are working to train up more Londoners to have the skills to work in construction, you can’t escape the fact that a ‘Hard Brexit’ could leave a quarter of the skilled construction workforce in the capital high and dry which would have a crippling effect on our plans to build the homes Londoners so desperately need.”

Mark Farmer, CEO of Cast Real Estate & Construction Consultancy, adds: “It’s very clear that the construction industry is far more reliant on migrant labour than anywhere else in the UK. To safeguard against this, London will require at least short to medium term continued access to EU migrant labour and early protections given to its existing migrant workforce.

“As part of a longer term plan, the construction sector, in partnership with developers and supported by the GLA, needs to come up with a clear strategy for attracting and training more home grown talent and also developing more modern, higher productivity construction techniques which are less labour intensive, helping to future proof the industry.”


UK construction slows down, but Brexit not to blame

12th August 2016

UK construction slowed down in the run-up to the UK’s EU referendum, but the Brexit vote is not entirely to blame, say experts.

The latest figures from the Office for National Statistics show that construction output dropped 0.9 per cent in June 2016. Output for new housing, in particular, fell 3.6 per cent in Q2 2016 from Q1 2016.

The figures follow a survey from the Royal Institute for Chartered Surveyors, which saw housing activity at its lowest level since 2013, while a Reuters poll of economists predicted that the UK economy will decline by 0.1 per cent for the next two quarters.

Analysis by the National Housing Federation showed a slowdown in housebuilding similar to that of the 2008 recession over the next decade would wipe out almost 120,000 construction jobs.

The National Housing Federation has warned that Brexit may be affecting the industry, noting that a slowdown in 2008 following the rcession cost over 100,000 construction jobs.

David Orr, Chief Executive at the National Housing Federation says in a statement: “We know that an uncertain economic environment will cause builders to put the brakes on. Our country’s prosperity and thousands of citizens’ livelihoods depend on a strong building sector – we cannot let a slowdown take hold.”

“Housing associations have a track record of building through tough times, having upped their output through the last recession when private developers could not. With the right flexibility from Government, and at no extra cost to the taxpayer, housing associations can keep the nation building.”

Nonetheless, mood from from some developers is relatively upbeat, not blaming Brexit as the sole bringer of moderating activity.

“It would be easy to say that this decrease is down to Brexit, but if you read far enough into the ONS report you’ll see that other countries have decreasing markets as well and now, more than ever, global construction is a market from which international businesses will buy on a data driven, systematic way,” Michael Conroy-Harris, of Eversheds, tells The Telegraph.

“While the location of where projects are carried out will continue to be impacted by tax and similar considerations, businesses now capture data about, for example, the cycle time it takes to negotiate and sign contracts. Unsurprisingly, balanced contracts that are not heavily negotiated get businesses working earlier and there is no more valuable commodity than time.”

Shraga Stern, Director of Decorean, based on London, also insists there is no neeed for panic.

“Historically, the broader industry experiences a dip in the summer months anyway, so we do not necessarily believe this has been caused by Brexit,” he comments. “In our day-to-day operations as a housebuilder, we have still seen an appetite and believe that other markets within construction will recover very soon.”

“As is the case with any slowdown or dip in a market, patience is key. We firmly expect the entire market to recover as the year progresses.”


House-building hits highest level since 2007

29th July 2016

UK house-building enjoyed its best quarter in almost 10 years in the run-up to summer.

A total of 41,222 new homes were registered in Q2 2016 throughout the UK, according to the National House Building Council’s latest new home registration statistics.

31,753 new homes were registered in the private sector, a 6 per cent increase on the 30,086 a year ago. The public and affordable sector was down 13 per cent with 9,469 new homes registered compared to 10,845 in Q2 2015.

Overall, the figures represent a 1 per cent increase year-on-year (40,931 new homes were registered in Q2 2015) and the strongest quarter for the sector since 2007.

The figures arrive despite the looming EU referendum, with some concerned that the vote for Brexit could impact the construction industry at a time when new homes are more needed than ever.

Nonetheless, half of the 12 regions showed an increase in registrations during Q2, including the South East (up 37 per cent) and the North East (34 per cent).
The NHBC data shows a mixed picture across the UK, though, with the other half reporting a decline in numbers, such as Wales (down 30 per cent) and London (down 29 per cent) compared to the same period last year.

In the long-term, though, the sector is enjoying healthy growth: the number of new home completions for the rolling 12 months to June 2016 increased by 6 per cent when compared to the previous 12 months (July 2014 – June 2015). This mirrors the strong growth seen in registrations in recent years, resulting in these new homes being completed over the past twelve months.

Commenting on the Q2 figures, NHBC Chief Executive Mike Quinton says: “Our latest statistics show that the industry continues to consolidate on the strong growth in registrations seen over recent years. These registrations reflect continued industry confidence in the run-up to the EU Referendum at the end of June.”

As the leading warranty and insurance provider for new homes in the UK, NHBC’s registration statistics are a lead indicator of UK house-building activity, with approximately 80 per cent market share.

Planning permission for new UK homes hits eight-year high

4th July 2016

The number of planning permissions granted for new UK homes has hit an eight-year high, according to new figures.

The number of planning permissions granted for new homes in Q1 2016 totalled 66,102m according to HBF and Glenigan’s latest Housing Pipeline report. This is a rise of 4 per cent year-on-year, just short of the pre-crash peak in the 12 months to March 2008 and ahead of the levels in 2006 and 2007.

This suggests house building can continue increasing to meet the very high level of demand for new homes, although many of the approved projects have “some way to go” before construction can actually begin.

Inded, permissions have risen steadily every year since 2009, with actual housing supply also increasing markedly over the past two years as more of the permissions have progressed to the point where builders can begin building. The last 12 months have seen a 66 per cent increase in permissions granted on the nadir of the recession in 2009. Numbers are now only 0.3 per cent below where they were at the highest point in early 2008.

However, many of the permissions counted in the report still have many hurdles to cross as they navigate the complexities of the planning system – for example, discharging planning conditions.

The HBF says the industry will “continue to urge government to streamline the planning process and ensure Local Authorities have the capacity to deal with the volume of applications now being processed”.

Indeed, demand for new homes remains extremely strong, with HBF estimating there is a shortfall of “well over” 1 million homes in England. Almost a third of young people (3.35m) are living at home with their parents and 1.24 million people are on housing waiting lists. Permissions rising is a promising start, but completions need to keep climbing too.

UK housing completions hit seven-year high

27th May 2016

The number of newly built homes is now at the highest level since 2008 to 2009, new figures released from the Department for Communities and Local Government show.

139,690 new homes were completed in the year to March – a rise of 12 per cent on the previous year. The number of new homes started is also at its highest level since 2007 to 2008, with 139,680 homes started in 2015 to 2016.

This continues the upward trend as both starts and completions have continued to grow for the last 2 years, albeit gradually.

Housing and Planning Minister Brandon Lewis says the rise is “real progress” but admits that is “more to do”.

The positive sentiment is echoed by the NHBC, which reports that more than 14,000 new homes were registered to be built in the UK in April – an increase of 17 per cent compared to a year ago.

A total of 14,228 new homes (11,258 private sector; 2,970 public sector) were registered in April, compared to 12,201 (8,988 private sector; 3,213 public sector) 12 months ago. Completions were also up 4 per cent for the month compared to last April (10,378 in 2016; 10,005 in 2015).

There were 40,399 new home registrations in the rolling quarter (February 2016 – April 2016), a slight decrease of 1 per cent on last year’s figures (40,877).
During these three months several regions experienced a notable growth in registrations, compared to 2015, including the North East (up 47 per cent), South East (23 per cent) and Yorkshire & Humberside (18 per cent).

As the leading warranty and insurance provider for new homes in the UK, with 80 per cent of the market, NHBC’s registration statistics are a lead indicator of UK house-building activity.

Commenting on the latest figures, NHBC Chief Executive Mike Quinton says: “April’s new home figures show that the industry enjoyed a successful month, with registration numbers well ahead of this time last year. For the rolling quarter, new home registration volumes are virtually identical, demonstrating further consolidation on last year’s levels.”

The uptick in starts and completions arrives despite a recent period of cooling activity and confidence in the building sector, due to both a skills shortage and possible uncertainty surrounding the upcoming EU referendum.

Growth in private housebuilding slows at start of 2016

29th April 2016

Growth in private housebuilding in the UK slowed at the start of 2016, according to Royal Institution of Chartered Surveyors.

Despite the Government promising to deliver 200,000 new homes by 2020, the latest RICS UK Construction Market Survey revealed that growth in the private housing sector slowed down “considerably” during the first quarter of 2016.

Private housing workloads rose at their slowest pace since Q2 2013, with only 36 per cent more of those working in the sector reported a rise in growth rather than a fall over the first quarter of 2016. During the first quarter of 2015 that figure was close to 50 per cent.

Simon Rubinsohn, RICS Chief Economist, comments: “On the surface, it might seem surprising that we are witnessing a slowdown in the construction sector just a few months after hearing the Chancellor’s ‘We Are The Builders’ speech, given the Government’s significant commitment to this sector. One might well ask why growth in private housing workloads is softening at a time when policy is firmly focussed on the creation of new starter homes. We have long held the view that starter homes cannot be the only solution. There is an issue around the availability of land on which new houses can be built, and we would like to see more being done to free up private brownfield sites.”

The figures arrive as the NHBC also reveals its own report, which shows that new home registrations dipped 9 per cent year-on-year in Q1 2016.

A total of 36,566 new homes were registered by NHBC, with 28,398 new homes registered in the private sector, a 7 per cent decrease on the 30,560 a year ago.

However, for the financial year 2015/16, registrations remained in line with the previous year with 152,329 new home registrations, marginally ahead of the 152,262 registered in 2014/15. There was also a 10 per cent increase in the number of new home completions for the financial year up to the end of March, compared to 2014/15, with 137,396 completions in total.

“This increase mirrors the strong growth seen in registrations in recent years, resulting in these new homes being completed over the first few months of 2016,” says the NHBC.

As the leading warranty and insurance provider for new homes in the UK, NHBC’s registration statistics are a lead indicator of UK house-building activity. Indeed, HBF and Glenigan’s latest Housing Pipeline report shows that initial planning permission for 255,032 new homes was granted in England in 2015 – up 57 per cent from a low point of 162,204 in 2009. Permissions have risen steadily every year since 2009, says the HBF, with actual housing supply also increasingly markedly over the past two years as more of the permissions are progressed to the point that infrastructure work can start and house builders can begin building new dwellings

“Whilst the increase in the number of permissions is welcome – and a strong indicator of future supply – many still have to navigate the complexities of the planning system,” comments Stewart Baseley, Executive Chairman of the HBF.

“This is a further sign that house builders continue to step up investment in future housing supply but we need to see these permissions being processed to the stage where we can get onto site and start building more quickly and really start to meet demand for housing.”

The RICS also pinpoints the planning system as a major headwind for the construction industry.

“Our survey tells us that planning delays are one of the biggest barriers to growth in the construction sector,” agrees Rubinsohn. “We have recommended that councils work together to create a team of emergency planners who can parachute into boroughs that are experiencing significant delays, therefore reducing a major growth barrier.”

Rubinsohn adds, though, that the climate of uncertainty caused by the upcoming EU referendum could also be a factor.