UK construction and property
- Office activity | Deloitte’s latest crane survey shows that office projects in London have slowed. New office construction was down 12%, and refurbishments were down by more than 50%. This is the first time new builds have been more dominant than refurbishments in nearly five years. Life science schemes – made up of both laboratory space and office workspace – were responsible for 35% of new starts, driving the bulk of new activity in King’s Cross and Docklands.
- Rebound | Glenigan forecasts construction output to increase next year as the recent Budget adjusted fiscal rules to allow for higher levels of capital investment, expected to unlock significant investment in public sector and infrastructure projects. The rebound could be further supported if economic growth strengthens, and further interest rates buoy private housing activity.
- Apprenticeships | The government has announced plans to invest £140m to create 5,000 more construction apprenticeships in England. Up to 32 new Homebuilding Skills Hubs will be set up in areas that need more housebuilding. The hubs will train people in trades such as bricklaying, roofing, plastering, scaffolding, electrical, and carpentry, in association with the Construction Industry Training Board, the National House-Building Council, Civil Service and Skills England. The fast-track apprenticeships will be completed in 12-18 months, approximately half the time of a traditional construction apprenticeship.
- Housing supply levels have fallen by 6% year-on-year according to the ONS. Figures from the Ministry of Housing, Communities, and Local Government (MHCLG) show there were 221,070 net additional dwellings in 2023/24, down from 234,290 the previous year. It is the lowest number since 2015/16 (excluding the pandemic). Furthermore, the number of new homes built fell by 7% from 212,360 to 198,610. Affordable housing starts in London fell by 88% year-on-year.
- Guarantees | Building on the Budget, the MHCLG has started to develop more than 20,000 homes by providing a £3bn funding package for SME and build-to-rent (BTR) developers. The package is intended to reduce risk for lenders and encourage them to increase the supply of credit for housebuilders.
- Government spending | The Crown Commercial Service – part of the Cabinet Office – has given notice of a single, seven-year framework for £80bn of construction work and associated services, including healthcare and offsite solutions.
- Cladding deadline | The government has set a new deadline for the remediation of cladding on tall buildings. Dangerous cladding now needs to be replaced by the end of the decade, on buildings taller than 11 meters. A report by the National Audit Office recently warned that fixing all tall buildings would probably not be finished by 2035.
