Issue 249 | 5 October 2020 - Turner & Townsend alinea

Construction and property news

Housing | Mortgage approvals reached a near 13-year high in August as buyers sought homes outside of large urban centres during the stamp duty holiday. Nationwide reported that house prices rose at the fastest since 2016. The average UK house price rose 5% in the year to September. Average prices within London hit a record high, 57% above 2007 levels.
Housing output | New build starts and completions fell 52% in Q2, demonstrating the impact that the early shutdown had on output.
Upgrades | The government has launched a £3bn fund to upgrade the energy performance of homes, schools, and hospitals in England.

Shortage Occupations | The latest paper from the Migration Advisory Committee has urged the Government to ease visa controls on bricklayers, masons, and welders due to skills shortages. Trades such as carpenters and roofers failed to make the Shortage Occupation List due to high levels of self employment, and there was little evidence of shortages in window fabricators and fitters, plumbers, or painters and decorators.
Lifetime Skills | The Prime Minister gave a speech from Exeter College, announcing a new Lifetime Skills Guarantee to help people train and retrain at any stage in their life. His speech highlighted a shortage of construction workers, questioning whether funnelling students into university courses is the best fit for the economy.

Iron ore | Prices rose as Vale paused output at a minor waste plant. Vale has seen persistent problems at waste sites and this latest announcement hasn’t convinced investors that these were being managed properly.
Coal | The first deep coal mine in 30 years was granted planning permission, a move that could undermine the government’s carbon neutral 2025 pledge. West Cumbria Mining said that the mine would extract coking coal used in steel and chemical plants, not for fuel.
Port Talbot | Jingye Group, new owners of British Steel, operating the Scunthorpe steelworks plant, is now turning its attention to Port Talbot. Tata has repeatedly tried to sell the plant, and is currently in rescue talks with the government as it says it cannot afford to keep funding losses.
Sterling fell against both the dollar and the euro as Brexit trade talks soured.

VAT and tourism | The Association of International Retail has warned that plans to scrap VAT-free shopping for international shoppers at the end of 2020 could put 70,000 jobs at risk. If maintained, and under a no-deal Brexit scenario, it is thought that the scheme would have to extend to EU visitors.
Asda sale | Walmart has sold Asda, in a deal valuing the chain at £6.8bn. Under the new owners, Asda will invest £1bn in the supermarket over the next three years.
Shell has announced that it plans to cut up to 9,000 jobs as part of a major overhaul, explaining that Covid-19 is accelerating the global transition to green energy.
Cineworld has confirmed a “temporary suspension” of its UK and US venues, impacting 5,500 people in the UK. The chain recently wrote to government ministers warning that the industry has become “unviable” as major releases have been delayed.

Future of work | Germany is preparing to give employees the legal right to work from home. The draft law will also aim to regulate home workers’ welfare.
Emerging Economies | The IMF has warned that Covid-19 could result in a number of sovereign bankruptcies.
Inflation in Europe | Prices fell more than expected in September, prompting debate over whether the European Central Bank should increase stimulus. Core inflation fell to a record low of 0.2% whilst total inflation was -0.3%.

Legal action | The EU has launched legal action against the UK over the Internal Market Bill, having given the UK until the end of September to remove the problematic clauses in the draft legislation. The Bill passed its final vote in the House of Commons on Wednesday, moving to the House of Lords.
Financial services have been given a 15-month grace period by the FCA to comply with post-Brexit rules, acknowledging the scale, complexity and magnitude of some of the changes. The EU also warned on Friday that whatever happens in the trade talks, the City of London will experience less fluid trade with the EU.
Port Infrastructure Fund | The Government announced a new £200m fund for ports to build new customs checking facilities, which will be needed whether the UK achieves a deal or not.