construction
Marketing No Comments

Construction work hits 9-month high, housebuilding falls: S&P

Construction work rose at the fastest rate in nine months in February, but this was tempered by a fall in housing activity for the third month running, data from S&P Global/CIPS shows.

UK building projects hit a “robust” 54.6 mark last month, up from 48.4 in January and above the neutral 50.0 threshold for the first time in three months, according to the latest S&P Global/CIPS Construction Purchasing Managers’ Index.

This is highest reading since May, ending two months of decline.

Commercial construction was the best-performing area, hitting a nine-month high, at 55.3, with civil engineering activity also returning to “modest” growth in February, at 52.3.

However, firms noted a fall in residential work for the third month in a row, which came in at 47.4, although companies said, “the speed of the downturn has eased since January”.

Housebuilding businesses said subdued market conditions were due to high interest rates, which caused cutbacks to new housebuilding projects in anticipation of weaker demand.

Across the sector, total new work picked up in February, the report says, leading to an improvement in order books for the first time since November.

It adds that overall business expectations for the year ahead improved further from the 31-month low recorded in December. Around 46% of the survey panel anticipate a rise in construction activity over the coming 12 months, while only 13% predict a decline.

The survey also pointed to the least widespread supplier delays since January 2020 and the slowest round of purchase price increases since November 2020.

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

S&P Global Market Intelligence economics director Tim Moore says: “Business activity in the UK construction sector returned to growth during February as a rebound in commercial work and civil engineering output helped to compensate for housing market weakness.”

MHA head of construction and real estate Brendan Sharkey adds: “Today’s PMI reveals that February was a very strong month for UK construction.

“However, in reality, the picture is very mixed. Some construction firms are coping well and some aren’t. At this time of year for many regional builders, a lot rides on local authorities.

“Some are pushing lots of work through before they close their 2022/23 books in March. This is boosting activity but the overall picture is a bit gloomy when looking forward.

He points out: “The London market feels like it is heading for a slowdown and all the big house builders forecast contraction over the next year.

“One or two well-established construction firms have already declared themselves insolvent. It looks like we’re straining to avoid a recession with new orders declining and the prospect of more interest rate rises.”

Beard finance director Fraser Johns adds: “After a two-month period of decline, it’s certainly encouraging to see a healthy rise in activity across the construction sector in February. Supply chain pressures softening and recession fears easing have been key drivers in boosting activity, new order levels and overall confidence.

“Last year, material costs in particular were much larger than expected, leading to a significant squeeze on live projects. It was one of many reasons why those without a strong balance sheet had nowhere to hide in 2022.

“So far this year though, increases – while still present, have started to come down and are closer to expectations, providing less volatility than in the previous 12 months.

Johns says: “One area that is expanding is more specialised infrastructure projects in the likes of healthcare, education and local authority for both local and central government. This has certainly been the case at Beard.

“Although the economic outlook is far from rosy, it is less doom and gloom than what we have come to expect. This is helping to shift sentiment and encourage more clients to commit to projects once again.”

“While this is all positive news, we are certainly not out of the woods yet, especially with high energy costs remaining a key factor. Businesses across the construction sector must still remain agile, especially those that rely on housebuilding projects.

“With high interest rates still stifling housing activity, residential housebuilding remained a weak spot, decreasing for a third month running.”

By Roger Baird

Source: Mortgage Strategy

construction
Marketing No Comments

Hayfield Homes submits plans for £35m GDV sustainable scheme in Gloucestershire

Hayfield Homes has submitted a reserved matters planning application to Tewkesbury Borough Council for a £35m GDV sustainable residential scheme in Gotherington, Gloucestershire.

The proposed scheme will sit on a 6.27 ha site, which was acquired from L&Q Estates.

Once approved and completed, the fossil fuel-free development will provide 50 two-, three- and five-bedroom homes and bungalows, 20 of which will be designated for affordable housing.

All dwellings will feature solar PV panels, air source heat pumps, energy-efficient underfloor heating, increased insulation, water efficiency measures and an electric vehicle charging point — in line with Hayfield’s zero-carbon-ready design principles.

In addition to this, the scheme will also include a multi-use games area, a children’s play area and a multi-purpose community area suitable for village events.

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

Andy Morris, managing director at Hayfield, said: “Our vision for this scheme has been to demonstrate how impressive a sustainable development can look and the positive impact it can achieve for local communities.

“That’s why in designing this scheme, not only have we harmonised our signature house designs to keep the village’s existing architecture, but to also introduce sustainable measures that will enable future residents to significantly lower their carbon footprint and household energy usage.”

Richard Edwards, group land and planning director at L&Q Estates, stated that the eco-friendly development would provide much-needed family homes in the area.

“We believe this development will add to the bio-diversity of the area and the public open spaces will prove beneficial to villagers.”

By ANDREEA DULGHERU

Source: Development Finance Today

cheshire garden village
Marketing No Comments

Plans for 1,500-home Cheshire garden approved

Plans to deliver ‘The Garden Village at Handforth’ have moved a step closer.

The Garden Village at Handforth will create a bespoke new village that will include 1,500 new high-quality design homes and extensive ‘green infrastructure’ – more than 40 per cent of the site will be open space, public amenity space or protected habitat for both residents and the wider public to enjoy.

It will also include a new school, up to 30 acres of employment land creating local jobs, a village centre with shops, restaurants, a hotel, and a village pub, new footpaths and cycleways, up to 175 housing units for older people who need care, and a children’s nursery.

At a meeting of Cheshire East Council’s strategic planning board, committee members resolved to be minded to approve a hybrid planning application for the scheme, subject to conditions and legal agreements.

Councillor Nick Mannion, chair of Cheshire East Council’s economy and growth committee, said: “This development has all the ingredients to create a truly wonderful new Cheshire village for the benefit of those living in, working in, and visiting the Garden Village for generations to come.

“Today’s decision by members of the strategic planning board is a fantastic step forward for this development and officers can continue to progress and deliver an exemplar scheme.

“The Garden Village will not only provide a range of new homes, but will encourage healthier and more active lifestyles, and support biodiversity – delivering a net gain through planned on and off-site measures.”

The development is one of 14 Government designated Garden Villages through Homes England’s locally-led Garden Village Programme, which gives the scheme national recognition.

The council is the lead developer and owns around 70 per cent of the land allocated for the garden village, while the remaining 30 per cent is owned by third parties.

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

The site – allocated as a strategic development site in the council’s adopted Local Plan Strategy – is around 300 acres and is east of the A34, south of the A555 and will be accessed via the A34 bypass.

At the heart of the village will be an ‘all-through school’, providing both primary and secondary education, with a community hall and sports pitches located alongside it.

Of the 1,500 new homes, 30 per cent will be affordable, 5 per cent will be self-build and there will also be starter homes for young people, family homes, and accommodation for older people. This mix will help to meet local housing needs.

Employment space such as studios and offices will be available, as well as shared workspace facilities, and the village will have electric vehicle charging points and its own heat network, using sustainable energy.

There will be new wildflower grassland and playing fields, arts and heritage trails, community orchards and allotments, new trees and hedges, and new habitats which will be created by incorporating green roofs and green walls as a way of greening the village centre, residential and employment areas.

All existing ponds will be retained and improved, while new ponds will be created that will be specifically designed and maintained to maximise their biodiversity value.

Cllr Craig Browne, chair of Cheshire East Council’s highways and transport committee, said: “The Garden Village also supports the council’s long-term ambitions to increase active travel and will take the pressure off other towns and villages through investment in local infrastructure.

“As the lead developer, the council will provide the primary infrastructure to the site and the plans include making improvements to the A34, creating a new access road to the garden village, a park-and-ride facility near the train station, and new cycling and walking routes – including a pedestrian and cycle bridge over the A34.”

This new infrastructure will enable people to travel in a greener and more sustainable way and provide easy access to essential local retail, leisure, healthcare, education, and wider community facilities.

An application for a park and ride scheme at Handforth railway station was previously approved.

A separate application relating to Dairy House Farm, which forms part of the Garden Village site, was previously approved and grants listed building consent for essential stabilisation and repair works of the former farmhouse and outbuildings.

This will enable the restoration and conversion of the buildings, which are Grade II-listed.

Source: Built Environment Networking

cheshire garden village
Marketing No Comments

Keep calm and carry on: development sector remains robust

Only a little while ago, the Bank of England base rate was at a record low, ultra-cheap mortgages were in abundance and property prices were climbing strongly on the back of soaring demand.

Fast-forward to today and the market looks like a very different place, indeed.

In an article I wrote a few months ago, I warned of an impending slowdown in the UK’s property market. However, the pace at which conditions have changed has taken us all by surprise.

In those few months, the Bank of England has hiked rates to a high of 3.5%, the economy is heading for recession and, according to surveyors, demand for property is falling. That has had a knock-on effect on house prices, which fell on a monthly basis in October for the first time since July 2021, according to Nationwide’s House Price Index. On top of that, some have predicted a sharp fall in house prices next year, as households grapple with rising mortgage rates and soaring inflation.

But while the outlook may seem gloomy, let’s not forget the fundamentals that underpin the housing market in this country.

The UK is property-obsessed and therefore, while transactions may dip in the short-term, history suggests that the market will recover.

It’s also worth remembering that we, as a country, do not build enough houses. Experts often say we need to build 300,000 new homes a year to keep up with household formation, but we haven’t done that since the 1970s. Until that happens, house prices will continue to be supported by the imbalance between supply and demand.

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

Another thing to note is that we’ve seen foreign investment in the UK’s property market hold up well, proving that the asset class remains attractive to investors. Softening house prices and a weak pound will actually boost the attractiveness of UK property to foreign investors even further, which might offset lower activity from domestic investors.

If anything, then, I expect the specialist end of the market, such as bridging and development finance, to remain fairly robust, even if activity tails off in the mainstream market. However, that is not to say conditions will remain the same for investors and developers as they had been.

Specialist lenders retain an appetite to lend despite the worsening economic outlook, but it’s clear that developers will have to pay more for finance in the future than they did in the past.

Truth be told, development finance has arguably been artificially cheap for too long, so a correction was due at some point. The rates developers pay have gone up, but with most of the expected increases now priced in, we should see them begin to settle.

Lenders may also want to see proof that developers are controlling costs in a high-inflation environment. That means not overpaying for land and developing good relationships with builders’ merchants to ensure you can lock-in your long-term costs.

However, like I said, I am confident that lenders will not turn off the taps. While they will want to manage the increased risk that comes with a challenging economic environment, they will also want to compete hard for the business that is left.

Although conditions do look challenging, I do believe that the development sector will hold up relatively well in the coming months.

By Guy Murray

Source: Development Finance Today

Development Finance package
Marketing No Comments

Residential construction industry tipped to hit £93.6bn in value by 2025

The number of active businesses within the residential construction industry could increase by 30% by 2025 and drive total market value to £93.6bn, according to research by property sales platform Unlatch.

If the forecast is realised, it would see a total of 57,401 businesses active in the residential construction industry.

According to Unlatch’s research, there are some 44,166 businesses operating across the UK’s residential construction industry at present, generating total revenue to the tune of £78.9bn with each business contributing an estimated average revenue of £1.8m.

Compared with pre-pandemic levels, the current number of businesses is down 7.1% while total market value is 11% lower, meaning average revenue per business has fallen by 4.3%.

However, according to Unlatch, annual figures are showing positive signs. For example, while the number of total businesses in the industry is 6% fewer than 2021, total market value and resulting average revenue per business are up 18.9% and 26.5% respectively.

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

Unlatch has predicted this growth will continue over the coming years, with the residential construction industry’s value hitting nearly £94bn by 2025. However, the downside to this sector expansion would be that, with more active operators, the average revenue per business would decline by 8.7%.

Lee Martin, head of UK for Unlatch, commented: “Like many sectors of the property market, the residential construction industry certainly faced a number of challenges as a result of the pandemic. While we’re yet to see a full return to form, there are some very positive signs of growth on an annual basis, with the pandemic market boom helping to drive revenue growth.

“This growth is expected to continue through to 2025 and we predict that the biggest worry facing many in the sector will be an increased level of competition, rather than a dent to their profit margins.

“It’s those who continue to innovate and progress the way we deliver residential property to market that are likely to come out on top, not just with respect to the construction process, but also when streamlining the sales process, benefiting both builder and homebuyer alike,” Martin added.

By Jerome Smail

Source: Property Industry Eye

cheshire garden village
Marketing No Comments

House builders call for changes in planning process

If developers are to build more and better homes, the planning process and the attitude of planning authorities need an overhaul.

That’s the views of developers and property experts attending the third roundtable in TheBusinessDesk.com’s series on the Future of Yorkshire, sponsored by Womble Bond Dickinson, which considered housing delivery and modern methods of construction (MMC).

Boris Johnson in 2019 announced a target of 300,000 new homes a year to alleviate housing shortages in the UK. Completions have remained a mere fraction of that, with around 37,000 homes in England in the year to March. Affordable housing schemes accounted for 26,500 of those. Meanwhile average UK house prices remain high, rising to nearly £295,000 in June.

And while demand fuelling high prices might seem ideal for developers, they are also facing rising construction costs, and delays in planning applications in the wake of the pandemic increase costs and can lead to loss of funding for a project.

“It’s very difficult to sell virtues to those who are invested in schemes when we’ve gone through such a period of change that we have,” said Will Martin, strategic land lead at Commercial Estates Group, citing not only the pandemic, but political uncertainty. “In my mind we need a period to settle down and get some more certainty in terms of delivery.”

Rob Gill, head of acquisitions at Casa by Moda, put part of the blame on planning authorities, saying determinations of planning applications by his firm were at a 15 or 20 year low. “I do think we’re getting more and more polarised, the public-private sectors looking at each other and saying, ‘What’s going on? Why is this happening? Why are you doing it this way? You should be doing it that way.’ And it does seem to me politically there needs to be something to bring the two together.”

Shelley Williams, associate residential development lawyer at Womble Bond Dickinson, said planning authorities would have to be more forward thinking and consider commercial interests in future. “It’s the red tape that’s the barrier, in terms of who makes the decision. The private sector can just make their decisions, whereas local authority it has to go to committee. The person you’ve been working with on a specific deal might not be the one who can make the decision. That compounds the delay. It’s quite archaic.”

Emma Gomersal, associate director of real estate at Deloitte, said it was crucial for local authorities to update their framework plans. “That’s what has created such huge delays within many local authorities. They haven’t got an up-to-date plan and officers are constantly having to battle applications coming on green belt land. It’s sapping so much time and resource and effort at that local authority level.”

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

Tim Reeve, director of Advent Developments, questioned whether local councillors were qualified to judge planning matters objectively. “I’m a great believer in democracy, but if it’s a policy compliant application, why can it not be approved? It’s very simple – if it’s policy compliant, where’s the harm? And that’s the problem. It’s the subjective interpretation of where the harm is that’s the problem. The delay might be existential to your funding.”

But if planning matters were sorted out, what would future homes look like?

James Lewis, Leeds studio lead at Buttress Architects, was clear. “It’s creating a community and environment that people want to live in, with a central square, a green space in the middle. It’s not about getting as many houses on a site as possible any more. You just can’t do it.

“It’s got to be more sensitive and more environmentally friendly. And people are aware about their energy bills, so they want to understand it’s energy efficient.”

Ryan Shepherd, senior development manager at South Yorkshire Combined Authority, added that infrastructure and connectivity played an important part in creating those desirable spaces, particularly in urban areas where SYCA wanted to attract more professionals and families.

“Our overarching aim is supporting the economic growth of the region. It’s implicitly tied to housing and how you can develop those spaces that retain students from the region and bringing more people in who want to live in those areas.”

The roundtable was part of a series on the Future of Yorkshire sponsored by Womble Bond Dickinson, Mott Macdonald, Buttress Architects and Deloitte. The next in the series, in November, will consider devolution.

By Andrew Staples

Source: The Business Deck

Planning Permission
Marketing No Comments

Housebuilding surges but insufficient housing supply continues to drive up house prices

The number of sites being developed for new homes increased 15% in the second quarter of the year compared to the corresponding period in 2021, the latest data shows.

Figures from the Office for National Statistics reveal a sharp rise in housebuilding starts in April to June of this year, with 51,730 homes under construction.

However, the increase came after a major slump in construction levels during the Covid pandemic (2020 to 2021) when the drop in housebuilding levels was on a par with the 2008 financial crisis that adversely affected housebuilders and the housing market. Net increase in dwellings in the UK dropped 11% in 2021-2020 compared to 2019-2020 as construction recovers following the Covid-19 pandemic.

The latest figures show that the number of completed homes rose 6% compared to April, May and June last year, to 44,940. This was also a 3% increase on the previous quarter.

Despite the improvement in housebuilding levels, the volume of new build homes being delivered continues to fall well below the UK government’s target to develop 300,000 homes each year.

The shortage of housing stock continues to place upward pressure on house prices in many parts of the country.

Residential property prices increased by 15.5% in July, according to the ONS, although analysts expect price growth to ease in the coming months.

Rhys Schofield, managing director at mortgage broker Peak Money, commented: “If you cut through the numbers that look big on paper, the UK needs to build 340,000 new homes a year until 2031. The Government’s own target is 300,000 a year.

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

“These latest numbers all fall well short, meaning that house prices can only be forced in one direction. With the lack of urgency around housebuilding, having a place to call your home is becoming increasingly out of reach for many people.”

The price of construction materials in the UK is also thought to be having a negative impact on the housebuilding sector. UK construction materials prices in July 2022 were 24.1% higher than a year earlier, according to the ONS.

Edgar Rayo, chief economist at property finance company Finanze, commented: “These newly released figures highlight the build-cost inflation battering the industry.

“Soaring construction costs brought about by supply chain issues and fuel price hikes continue to squeeze the profit margins of the UK’s property developers.

“As we track the imbalance in the housing market, we still observe the very high demand for housing, which continues to put pressure on prices.”

By MARC DA SILVA

Source: Property Industry Eye

Planning Permission
Marketing No Comments

£3.6m funding deal enables housing scheme at former social club site

Specialist lender, Together, has agreed a £3.6m funding facility for a family-orientated homes development in South Yorkshire.

Housebuilder Walshaw Homes is constructing 22 homes on a plot of land on the site of a demolished social club in Main Street, Hackenthorpe, Sheffield.

The developer’s funding partner, Together, provided the finance package for the “Valley View” scheme of three and four-bedroom luxury homes. The homes are available for between £225,000 and £350,000.

Walshaw Homes managing director, Joel Richards, approached Together – which provides commercial and development finance and has a loan book of £4.8bn – after his firm acquired the site of the long since demolished Cherry Tree Social Club.

Becky Hall, head of origination at Together, said: “We agreed to provide the funding after seeing the potential of the location and having been really impressed with the vision of Walshaw Homes and its managing director, Joel Richards.

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

“I already had a strong business relationship with the developer, having worked with them in the past, so it’s great to help Joel and the team realise their ambitions for this latest scheme as it begins to take shape – it will bring quality housing to meet the needs of Sheffield’s growing population.”

Planning permission for the housing scheme was granted in November last year, allowing construction to begin in June. It is expected to be completed by August 2023.

Richards said: “Construction is now well underway, with foundations in place for five of the plots, and there has been a huge amount of local interest.

“These new, modern two and three-storey homes will be ideal for couples and young families and are next door to local shops with other amenities such as the Crystal Peaks shopping centre and the Rother Valley Country Park just on the doorstep.

“It’s fantastic that Together has agreed to support us. It’s particularly beneficial to have a lender on board which really understands the needs of developers like us and is willing to help turn our exciting vision into a reality.”

By Miran Rahman

Source: The Business Desk

homes
Marketing No Comments

140 more homes earmarked for Ledbury

More homes are being planned for a growing Herefordshire town.

Land to the west of the Hawk Rise development off Leadon Way, Ledbury, has been acquired by developers Vistry Group and is earmarked for 140 new houses.

The homes would be built under the Bovis Homes brand, which is part of the Vistry Group.

The 22-acre site already has outline planning permission for residential development and more detailed plans have been submitted to Herefordshire Council.

Developers say there will be a mix of properties on the site, with two, three, four and five-bedroom houses for private sale.

There will be 84 properties available for private sale in total, as well as 56 affordable homes available to local people through rent or shared ownership. The plan includes new public open space.

Supriya Ray, managing director of Vistry Group’s Cotswolds region, said: “This development will provide not only much-needed new housing to the area but will also create a vibrant new neighbourhood in the lovely market town of Ledbury.

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

Bovis Homes development would include new public space
“As well as constructing 84 new properties for private sale, we will also be providing 56 affordable homes for local people which will allow them to stay in the area and remain close to family and friends.

“The selection of new homes at the site will appeal to a wide range of house-hunters including first-time buyers, growing families who need more space and people downsizing. It will be a sustainable development which is designed to blend in with and embrace its natural surroundings.”

Plans for the development’s public open space include a village green, children’s play areas and a picnic area, as well as meadowland and extended woodland.

Existing hedgerow and trees will be retained wherever possible on the site and complemented by new planting.

Mr Ray said: “We have liaised with Herefordshire Council on this project and hope to receive approval for our detailed plans in September, which would enable us to forge ahead with the construction programme.

“If all goes well, we would hope to start constructing the first homes in April 2023 and to have the first residents move in before the end of that year.”

By Phil Wilkinson-Jones

Source: Hereford Times

Planning Permission
Marketing No Comments

Plans to build 750 homes on Carlisle greenfield site

Up to 750 new homes could be build on greenfield land near Carlisle.

Chorley-based property company, Northern Trust, agreed a planning promotion deal with the private landowner on land at St Cuthbert’s Garden Village, in Carleton, Carlisle.

The land, which extends to 176 acres, is currently a green field site in agricultural use.

The plans for the site will be promoted in two separate phases.

David Jones, senior land manager at Northern Trust, said: “We are actively looking for further residential and commercial land opportunities to purchase or promote throughout the UK, so we are pleased to be working with this private landowner on facilitating the plans for development of this strategic site to provide much needed new homes for the area and continue the investment for the benefit of the local community.”

Northern Trust and the landowner are working alongside Savills’ planning and development teams in the North West to secure the planning and to agree a land deal, respectively.

To find out more about how we can assist you with your Development Finance requirements, please click here to get in touch

Ed Rooney, Savills’ North West development director, said: “The Carlisle housing market is a huge opportunity for North West house builders with the shortage of land elsewhere in the region.

“Carlisle is set for significant economic growth aided by the high quality housing and environment provided by the Garden Village and our client’s land at Carleton is a key part of the overall housing masterplan to the south of the city.”

Jonathan Ainley, associate director in the planning team at Savills in the North West, said: “We have worked on behalf of the landowner over the last five years to promote this site and now look forward to the next phase, working with Northern Trust to progress a Garden Village at Carleton in the short term.

“It forms part of the largest Garden Village in the country and we are confident it can deliver high quality new homes, with excellent public spaces and connectivity, whilst also supporting Carlisle City Council in its ambition to achieve economic growth.”

Northern Trust has a land bank of more than 5,000 acres.

By Neil Hodgson

Source: The Business Desk