UK construction and property
- Office availability | The latest data from Knight Frank shows that vacancy rates in London have fallen to near-record lows for newly built offices offering top-end tenant facilities and sustainability credentials. It calculates that just 380,000 sqft of space is available across St James and Mayfair, and the City of London – less than eight months of average take-up. However, across all stock, the vacancy rate is much higher and made up of mostly lower-quality buildings.
- Fire safety | A report commissioned by the government by Harlow Consulting and Edinburgh Napier University has called for more research into the fire safety performance of volumetric modular construction. The concerns come two years after the National Fire Chiefs Council asked for such tests and specific legislation to be introduced under the Building Safety Act. The new report does, however, suggest that there is “insufficient evidence to suggest whether a fire is more or less likely in a modular building”. The Health and Safety Executive / Building Safety Regulator also published a paper last week highlighting several risks associated with volumetric construction.
- Fair payment | The government launched the Fair Payment Code which introduces a bronze, silver, and gold award rating system related to the number of invoices paid in a certain time period. It comes as the government has promised to “crackdown” on late payments.
- Long-term strategy | The Construction Industry Council (CIC) has called on the government to produce a long-term construction and built environment strategy. This follows the Department for Business and Trade’s consultation on Invest 2035: the UK’s modern industrial strategy, which closed last week. The CIC said that construction should be seen as the country’s critical foundational sector, and a long-term strategy should be developed as a “living document” with meaningful input from built environment professionals.
- ISG impact | The National Audit Office has revealed that the collapse of ISG will add between three and 18 months to the prison expansion programme as ISG was the contractor on 17% of the expansion programme.
- Permitted development rights | Analysis by the Local Government Association has found that almost 24,000 affordable houses have been lost in office-to-residential developments as, without the need for full planning permission, there is no mechanism to allocate affordable housing or enforce infrastructure contributions from developers.
- Infrastructure decisions | In a speech outlining the government’s plans, the Prime Minister said the forthcoming Planning and Infrastructure Bill would streamline the approvals process promising to end delays caused by objectors. Starmer said the new target of 150 major infrastructure decisions throughout this parliament would triple the rate compared to the last parliament.
- Output | According to the S&P Global UK Construction Purchasing Managers Index (PMI), construction output increased in November as the index rose to 55.2, with 50.0 being the neutral value showing no growth. This increase in output was driven by commercial work with the strongest rise in two and a half years at 58.1 up from 52.8 in the previous month, driven by consumer demand and new opportunities to tender. However, housebuilding activity declined at its sharpest pace since June at 47.9 down from the previous month’s figure of 49.4 showing a further retraction in the sub-sector. S&P respondents blamed this on high borrowing costs and fragile consumer confidence.
