Rising property values, booming tourist numbers and ever improving air access is making Turkey more attractive to foreign real estate investors, it is claimed.

Turkey's attraction to foreign property buyers has gained momentum during the first half of 2014 with a promising second half ahead, according to real estate agency Spot Blue International Property.

Sales to foreigners in Turkey rose 60% year on year during the first six months of 2014, totalling 8,507 property purchases, according to figures from the Turkish Statistical Institute.

For the same period, Istanbul alone recorded a 150% increase in foreign buyers, putting it ahead of the tourist province of Antalya, home to the popular resorts of Alanya, Belek and Kalkan.

Meanwhile, the average price of a new Turkish home was 12.05% higher in June compared to June 2013. It was one of the strongest months for the Turkish property market with 600 foreign purchases in Istanbul, followed by Antalya at 586 and Aydin at 108.

The Turkish Ministry of Economy confirmed that foreigners bought $1.26 billion worth of Turkish real estate in the first four months of the year, which was $893million more than in the same period in 2013.

‘Istanbul has certainly been a winner for us this year. Interest has been strong from Middle Eastern buyers in particular, with most buying one or more buy to lets in the mushrooming suburbs of the city, such as Beylikduzu and Bahcesehir,’ said Julian Walker, director at Spot Blue International Property.

Foreign visitors to Turkey increased by 3.24% year on year in the first three months of 2014, reaching 4.35 million, according to data from the Ministry of Tourism and Culture. The second quarter recorded even greater growth, up 6.8% year on year, peaking at 10.9 million. In terms of revenue, tourism generated a record high of $8.9 billion in the second quarter of 2014, a 7.9% increase over the same period last year.

Turkey welcomed more than 35 million foreign visitors in 2013, becoming the sixth most popular travel destination in the world, but is forecast to receive 43 million tourists in 2014, with the sector generating revenue of $36 billion.
‘Increased tourists not only stimulate the property market in terms of sales but they also are encouraging for foreign owners who let their property to holidaymakers,’ explained Walker.

This year has seen Turkey's global air links and air traffic continue to grow, with interest in the Middle East driving much of this. In June, a record 16 million passengers passed Turkish airports, while in May, Istanbul's Ataturk Airport broke a European record for the highest number of landings with 1,267, in any one day.

At Istanbul's second airport, Sabiha Gökçen, Turkey's Pegasus Airlines has make progress in 2014 to becoming the fourth largest low cost carrier in Europe. Results from the first quarter of this year showed the airline carried over four million annual passengers, growth of over 25%.

Meanwhile, in June, Turkey's flagship national carrier, Turkish Airlines, launched its 257th destination, cementing its…

Laing O’Rourke’s annual report for the year to 31st March 2014 shows a steady performance, modestly impacted by a weakened Australian dollar.

Total revenue declined 0.3% to £3.57bn while a reduction in margins in the European business brought gross margin pre-exceptional items down to 8.5%, from 8.7% the previous year.

 “These figures were adversely impacted by foreign exchange movements,” said finance director Callum Tuckett. “On a like-for-like basis, applying foreign exchange rates from the previous 2012/13 trading period, managed revenue increased over 5%.”

After paying £10.0m of tax, retained profit was £41.9m, up slightly from £41.1m after tax profit in 2012/13.

The tax payment equates to an effective tax rate for 2013/14 of 19.3%, down from the 25.4% average of the past four years and below the UK corporate tax rate of 23% due to the mix of profits generated in different jurisdictions, Mr Tuckett said.

Laing O'Rourke, registered in Cyprus and with its parent company based in the British Virgin Islands, is sensitive to accusations relating to its tax arrangements after being embroiled in a row with a member of parliament last year. (See previous report here.)

A decline in the order book from £8.2bn to £7.4bn was attributed half to the weaker Australian dollar, and half to a focus on higher margin contracts rather than chasing turnover.

Profits were broadly evenly split between Laing O'Rourke’s European operations and its Australian ones. Pre-exceptional EBIT for Europe Hub was £47.1m and Australia Hub £45.0m. This came from £2.6bn managed revenue in Europe (which in this context includes Canada, Saudi Arabia and the United Arab Emirates) and £1.8bn managed revenue in Australia.

Group chief executive Anna Stewart said: “We maintained our management discipline, and deepened relationships with customers who value the certainty of our integrated business model. As a result we delivered another profitable performance and made good progress against the key elements of our strategy to offer innovative solutions that benefit our business and the wider industry.

"We continue to be restless in our pursuit of excellence. No one party has all the answers and we thrive best when given the opportunity to collaborate in wider teams and share ideas and develop solutions together."

Chairman Ray O'Rourke added: "I am pleased to report another profitable year in which we have sustained revenues and operating margin, outperformed our industry in cash generation and achieved our targets for new business. This is a creditable performance and I am proud of the commitment and hard work of all my colleagues around the group.”

Nearly one in 10 home owners in the UK say they will sell up if interest rates rise and a third say they will potentially struggle, new research has found.

Around one in 10 mortgage customers have already fallen behind with current payments and a third would cut back on all non-essential spending to make ends meet, according to the survey from mortgage broker Ocean Finance.

With the Governor of the Bank of England Mark Carney recently suggesting that interest rates could start to rise over the next few months, almost half of mortgage borrowers, 46%, admit they would either definitely or potentially struggle if the interest rate on their home loan went up by 3%.

A 3% rise in interest rates would potentially mean borrowers with repayment mortgages paying an additional £150 a month for every £100,000 owed. UK home owners were asked how they would cope making the increased payments.

More than a third, 38%, said they would potentially struggle with the increase and would have to look at ways to save money and 7.9% revealed they would definitely have difficulties and would immediately seek to sell their property.

Just over one in three, 35%, of mortgage customers noted they would adjust their current budget so they could make sure they were still able to afford the payments. Only one in five claimed they would comfortably manage if the interest rate on their mortgage increased by 3%.

With the Bank of England base rate at a historic low of 0.5%, there are home owners who are already struggling to make their repayments. Asked to describe their ability to make their current mortgage payments, some 9.8% of home owners said they have had difficulty keeping up and have fallen behind. A further 19% claimed they are up to date but do struggle to pay their mortgage.

Should their mortgage rates increase by 3%, some home owners admitted they would have to take drastic measures to be able to maintain their payments with 37% saying they would cut back on all non-essential spending, and 33% saying they would reduce all their non-priority spending as well as some essential spending.

Meanwhile, 11% of mortgage holders said they would work more hours so that they could afford their increased repayments and still maintain their current lifestyle. Only 22% said they did not think they would have to make any cut backs.

‘Clearly it is likely to take a while for rates to rise by 3%. But if they do go up by that much over the next couple of years it’s worrying to hear that nearly half of mortgage borrowers are concerned about how they would keep up with the repayments, especially when one in 10 are already behind with their payments,’ said Ian Williams, spokesman for Ocean Finance.

‘If home owners are currently on a variable rate or tracker mortgage and are concerned about how rate increases might affect them, they could seek out professional advice to find out if switching…

Twenty councils have been selected for the second phase of a programme to release surplus government land and property.

The One Public Estate programme uses land and property released by government to boost economic growth and regeneration. The Cabinet Office and the Local Government Association (LGA) run the programme together to encourage sharing services, reducing running costs and generating capital receipts.

The 20 councils taking part in the second phase of the One Public Estate programme are:

• Manchester City, Trafford, Bury, Oldham, Salford and Stockport
• Norfolk and Suffolk in partnership with Forest Heath and St. Edmondsbury (West Suffolk)
• Liverpool
• Birmingham
• Barnet
• Croydon
• Plymouth
• Southampton
• Kent
• York
• Cornwall
• Bradford

They join the initial 12 pilot councils that took part in the first phase of the programme in 2013.

• Bristol
• Cheshire West and Chester
• Essex
• Hampshire
• Hull
• Leeds
• Nottingham
• Portsmouth
• Sheffield
• Surrey
• Warrington
• Worcestershire

The programme is already projected to save £21m in running costs and raise £88m in capital receipts.

Councillor Peter Fleming, chair of the LGA's improvement and innovation board, said: “The One Public Estate programme demonstrates the successes which can be achieved when councils and government get together to release land for growth and service improvements, which in turn leads to housing, job creation and economic growth. The first round has been extremely successful and this second round will continue to build on the good work achieved so far. Local authorities have been in the driving seat and the achievements made during the first wave represent a tiny proportion of what we believe One Public Estate can achieve.”

Cabinet Office minister Francis Maude said: “As part of this government’s long-term economic plan we have got out of 1,250 buildings since the last general election generating hundreds of millions in savings and creating more opportunities for housing and jobs.

“This programme shows what can be done when central and local government work together, and it’s great to see more and more local authorities entering the programme and demonstrating a readiness to save money for taxpayers, create new jobs and deliver better services by using their assets more efficiently.”

Residential property prices in Australia’s capital cities increased by 1.1% in the second quarter of 2014 with Sydney and Melbourne continuing to drive a two tier housing market in the country.

It means that the aggregate capital price gain across all capital cities since the beginning of the year is 5% but price growth varies considerably depending on location, according to the latest RP Data index.

Sydney saw prices increase by 2%, Canberra by 2.1% and Melbourne by 1.8% which offset falls in other capital cities.
Darwin saw mild growth of 0.8% while price fell by 2.6% in Adelaide, 1.2% in Hobart, 0.4% in Brisbane and 0.1% in Perth.

Broadly, capital city dwelling values have trended higher since June 2012 with the combined capitals index has recording a cumulative gain of 17.4%. The data shows that Sydney has seen the most growth, up almost 25% during this period, while Darwin saw growth of 20.4% and Melbourne 18.5%.

The lowest rate of capital gain over the current cycle was in Adelaide where values are just 5.5% higher, and in Canberra where values have recorded a 7.9% increase.

According to Tim Lawless, RP Data research director, despite the most recent set of data showing a rise, the growth trend has eased from the peak conditions recorded last year. Over the past six months, capital city dwelling values moved 3.7% higher compared with the peak rate of growth of 7.2% which was recorded over the six months to November last year.

Lawless said that over a similar time frame the growth in mortgage demand has started to ease, suggesting buyer demand may be being dampened by rising affordability hurdles and low rental yields in the largest cities.

Regional markets continued to languish and recorded a 0.7% fall over the June quarter and a year on year growth rate which is slightly higher than inflation at 3.5%.

‘Regional markets are of course diverse and range from agricultural regions which are largely driven by weather conditions and export factors, mining and resource-centric areas where the downturn in commodity prices and fewer major infrastructure projects are generally causing weak housing market conditions, and lifestyle markets where buyer demand is bouncing back and values are generally rising,’ Lawless explained.

Examination of the housing market across broad price segments reveals that the most expensive quarter of the combined capital city housing market has shown the highest capital gains over the past year. Dwelling values across the most expensive quarter of the capital city market are up 10.8% over the past 12 months compared with a 7.9% gain across the most affordable quarter of the market, and a 10.1% capital gain across the broad middle of the market.

Rental yields were down over the month, with capital gains continuing to outpace rental growth. The typical gross rental yield on a capital city dwelling fell to 3.9% in July from 4% in June, with Melbourne yields the lowest of any capital city at 3.4% gross, followed by Sydney at 3.9%…

A strengthening UK economy and more buoyant employment market has translated to a pick up in the prime lettings market in London in the first half of 2014.

The prime central London (PCL) market saw growth of 2.9% in the first half of 2014 compared to falls of 1.9% over 2013, according to the latest report from real estate firm Savills.

The firm says that while high stock levels remain an issue in some areas, the return of the family market resulted in rents increasing 3.4% for houses compared to 0.9% for flats over the quarter.

International tenants are now more dominant in the PCL market than those from the UK. In 2013 and the first half of 2014 they accounted for 75% of tenants, with Western Europeans the largest sub group. For all tenants the largest employment sector in PCL is financial and insurance services which accounts for roughly half of market demand.

However, there is evidence that the tenant profile is widening and becoming less dependent on this sector alone. The proportion of those working in the financial and insurance sector has fallen from 55% in 2011 to 47% during the first half of this year.

‘While this may temper rental growth for PCL property over the short term, strong employment growth in the professional, media and communications sectors is likely to underpin demand in this market going forward,’ said Lucian Cook, director of residential research at Savills.

The prime outer London markets that includes popular areas such as Islington, Clapham and Wimbledon, have benefited over the past three months from the pickup in demand for family housing.

The prime north west markets of Hampstead and St John’s Wood saw the strongest quarterly growth across prime London, with average rents increasing 2.2% as low stock levels of family houses has intensified competition.

Prime south west London also saw demand for large family housing increase and average rents for five plus bedroom properties rose 1.6% over the quarter. However, in this area demand from singles and sharers unable to buy in the highly competitive London housing market resulted in higher rental growth for flats. Smaller properties have seen stronger annual growth than houses, with rents for one bedroom properties increasing 2.2%.

Over the past six months the prime east of City markets of Canary Wharf and Wapping have seen the strongest rental growth across prime London, with average rents increasing 3.1%. ‘Canary Wharf has been the driver of this growth due to the continued strong demand from corporate, students and sharers and a current lack of stock on the market. With an average pound per square foot of £27 compared to £40 across all prime London, these markets are attractive for the relative value they provide,’ explained Cook.

The report also shows that across the commuter zone, average rents in prime cities and towns rose 1.2% annually compared to 0.6% for rural properties. Similar to the prime sales market, the trend for urban living remains more popular than rural living…

The number of foreclosed homes in the United States on the market fell by 35% in June, the 17th month in a row when levels have fallen by more than 20%, the latest data shows.

The CoreLogic data also shows that year on year inventory declines have been recorded for 32 months in a row and the amount of completed foreclosures is also falling, down 20.4% for a year ago.

It means that in June there were approximately 648,000 homes in foreclosure, just 1.7% of all homes with a mortgage.
At its peak, the seriously delinquent inventory increased 88% year on year in April 2008, but it was down 23.3% year on year in June 2014.

Furthermore, pre-foreclosure filings decreased by 12.5% from 83,500 to 73,100 per month nationally in June 2014 from a year ago. As of June, pre-foreclosure filings had fallen 68% from their peak of 229,000 in March 2009. By comparison, monthly filings averaged 21,000 from 2003 to 2005 prior to the financial crisis.

The five states with the largest year on year drop in the foreclosure inventory were Arizona with a fall of 53.6%, Utah down 51.5%, Minnesota down 49.5%, Georgia down 46.9% and Nevada down 46.1%.

All 50 states and the District of Columbia posted declines in the foreclosure inventory from a year ago, with 45 states showing decreases of more than 25%.

CoreLogic said that of particular interest this month is the improvement in the top three states as ranked by foreclosure rates. Among the three states, Florida was hit the hardest, peaking in June 2011 at 12.5% and falling to a rate of 5% in June 2014.

However, the improvements in New York and New Jersey have been much smaller. Over the 12 months ending in June 2014, the foreclosure rate in New York and New Jersey fell by only 0.6% compared to a 4.2% decline in Florida.

Recently data has been suggesting that in the UK property market price growth has been slowing but the latest index shows a month on month rise of 1.4%.

The figures from the Halifax House Price Index also show a quarterly rise of 3.6% and an annual rise of 10.2%, taking the average price of a home to £186,322.

Looking at previous figures, the data showed a fall in June but this has now been countered by the 1.4% rise in July. Since last December there have been four monthly price increases and four price falls.

Stephen Noakes, mortgages director at the Halifax, pointed out that monthly figures can be volatile and the quarterly data gives a more accurate picture of what the trends are.

‘While supply remains low, housing demand continues to be supported by a continuing economic recovery, growth in employment, improving consumer confidence and low mortgage rates. However, earnings growth is still lagging behind consumer price inflation,’ he said.

Although home sales have edged down by 6% since a recent peak in February, they are close to 103,000. Home sales during the April to June quarter were 21% higher than in the same three months last year, according to seasonally adjusted figures from HMRC.

New buyer enquires continue to ease, a trend that started in November last year, according to data from the Royal Institution of Chartered Surveyors (RICS).

On the other hand, the latest Halifax Housing Market Confidence Tracker indicates that sentiment towards selling is growing. Over half, 57%, of those surveyed believe the next 12 months will be a good time to sell, compared to only 32% who feel it will be a bad time. This is the highest score of this measure since the survey’s inception in April 2011.

Disregarding asbestos hazards during a demolition job has led to fines being handed down in Teesside.

Hartlepool-based Baxketh Ltd, a metal-recycling business, agreed to remove steelwork from the premises of UK Tankcleaning Services Ltd in New Road, Billingham. Baxketh worked without payment but got to keep the metal to sell for scrap.

But the steel included pipes lagged in asbestos fibres, which were removed with no attention to the special measures required.

Teesside magistrates were told yesterday that inspectors from the Health & Safety Executive (HSE) visited the site on 22nd February 2013 following a complaint from a worker at neighbouring premises. HSE inspectors saw Baxketh Ltd directors Michael Almond Senior and Michael Almond Junior on the site, with a significant amount of pipework and damaged insulation scattered on the ground. Almond Jnr was operating a mechanical excavator with a grab to move steelwork from the ground into a skip.

A prohibition notice was served on Baxketh Ltd to prevent further work. An improvement notice was also served on UK Tankcleaning Services Ltd that required it to carry out an asbestos survey and develop a system to ensure the results were shared with those likely to disturb any asbestos.

Tests carried out by HSE later confirmed that the insulation debris did contain asbestos.

Baxketh Ltd, of Burn Road, Hartlepool, was fined a total of £12,000 and ordered to pay £3,804.20 in costs after pleading guilty to breaching Regulations 5(a) and 16 of the Control of Asbestos Regulations 2012.

UK Tankcleaning Services Ltd, of Lodge Lane, Doncaster, was fined £10,000 with £2,243.40 costs after pleading guilty to breaching Regulation 4 of the same legislation.

Michael Joseph Almond Snr, 73, of Westbourne Road, Hartlepool was fined £1,000 and ordered to pay £204.80 in costs after pleading guilty to breaching Regulation 5(a) of the same legislation.

Michael Vincent Almond Jnr, 47, of Plymouth Walk, Hartlepool was fined £650 after pleading guilty to breaching Regulation 16 of the same legislation.

HSE Inspector Julian Nettleton said after the case: “Asbestos is the single greatest cause of work-related deaths in the UK and there is a lot of industry in the Teesside area that still uses, or occupies premises that have old chemical processing plant dating back to the ’60s. Almost all of it was lagged with asbestos in those days.

“Site operators and contractors working at these sites should always assume that old pipework is lagged with asbestos unless there is reliable evidence that says otherwise. Those involved in the construction and refurbishment industry also have a clear duty to ensure that work is managed so as to prevent the spread of asbestos.

“This incident occurred because UK Tankcleaning Services Ltd’s asbestos management systems did not include anything relating to informing others of the presence of asbestos on the site. Baxketh failed to carry out an asbestos assessment before starting work and did not take any measures to prevent the spread of asbestos fibres. This put the directors themselves, their own employee and others working nearby at risk of exposure to asbestos fibres and the court agreed that both companies were equally culpable for the offences.”

A strong first half of the year saw construction group Interserve deliver substantial growth in revenue and profitability.

Revenue was up nearly 29% for the six months to 30 June 2014, reaching £1,374.8m (2013 H1: £1,068.2m).

Excluding exceptional items, headline pre-tax profit was up 36% to £50.2m (2013 H1: £36.8m).

Factoring in amortisation and exceptional items, notably transaction costs on the £250m acquisition of Initial Facilities in March, reported pre-tax profit for the period was £28.3m, down from £30.7m for the same period last year.

Even without the acquisition of Initial Facilities, Interserve saw organic growth of 9.1% in revenue and 15.4% in operating profit during the first six months.

With £2bn of new contracts secured in the period, the order book has swollen to £7.5bn, up from £6.4bn at the start of the year.

Chief executive Adrian Ringrose said: "It has been a very good first half of the year for Interserve. We have delivered strong organic growth, achieved through robust performances from our UK Support Services and Construction businesses and excellent results in Equipment Services.

"Market conditions in International Construction and Support Services continue to be highly competitive, although we are now starting to see signs of improving demand.

"Our strong organic growth was complemented by the performance of our acquisitions. Initial Facilities traded in line with our expectations during the period and its integration is progressing smoothly.”

With the acquisition of Initial Facilities, Interserve’s support services division generated £867.2m in revenues, compared to £619.8m in the first half of 2013.

The construction division also performed strongly, with an 11.6% rise in UK revenue to £432.6m, plus a further £99.4m from international work. Organic revenue growth was 4.9% on the same period in 2013, boosted to 11.6% including Paragon, the specialist fit-out and refurbishment business acquired in May 2013. Contribution to total operating profit increased by 8.1% to £8.0m.  Margins remained stable at 1.9% and future workload rose to £1.4bn. (FY 2013: £1.0bn).

Over a quarter of young British people would prefer to buy a house if they were given £20,000, rather than put the cash towards their wedding, a new survey shows.

On average couples saving to buy their first home cut their wedding budget by over £5,000 and 28% of those aged between 18 and 34 would spend a £20,000 gift from their parents on a deposit for a house, according to research by HSBC.

With the cost of a wedding now averaging £20,000, the findings reveal that only 1% of young adults would choose to shell out the entire sum on their nuptials.

With such gifts the reserve of a lucky few, most young people are pondering how to split their savings between a deposit for a new home and a dream wedding. Nearly half, 47%, would look to cut the cost of their wedding in favour of putting it towards a house deposit, while 26% would ask guests for cash instead of a traditional wedding gift to put towards a house.

‘With the average deposit for first time buyers now £23,500, it appears that couples are choosing to be pragmatic when it comes to tackling the difficult decision of whether to shell out on a big wedding or buy a home,’ Peter Dockar, head of mortgages at HSBC.

‘Clearly, it appears that being savvy with the pennies and giving more thought to home buying is becoming a priority,’ he added.

The research also reveals that those looking to cut the cost of their big day in order to boost their deposit savings will do so to the tune of £5,443 on average.

The most popular ways of cutting costs are to reduce guest numbers (45%), choose a cheaper reception venue (29%) and reduce the cost of the honeymoon (26%).

Some 60% with aspirations of home ownership admit that they cannot afford a deposit for a first home without financial help from their family

Wircon, a German renewable energy company, has teamed up with Sino-American solar power specialist SPI to target the UK solar photovoltaic market.

SPI and Wircon plan to set up a joint venture company to develop solar energy projects in the UK, with an initial proposed target of 55 MW. Selected projects will be procured and developed with the intent for the joint venture company to own and operate certain assets and sell others to investors.

SPI’s stated strategy is to grow its presence in key markets through strategic alliances with strong local partners.

SPI chairman Xiaofeng Peng said: “Wircon has amassed a wealth of solar project development experience in Europe over the years, and this agreement provides a foundation for SPI to grow our business in the critically important UK market. The UK will be one of our key geographic focus markets in the coming years, and this announcement marks a new milestone for SPI internationally.”

SPI Solar describes itself as a global turnkey developer and EPC contractor for large-scale solar energy facilities. Based in the USA, it is majority owned by China’s LDK Solar, which manufactures multicrystalline solar wafers that are used in solar cells.

Mark Hogan, president of Wirsol Energy Ltd, a subsidiary of Wircon, added: “We plan to capitalise on selected opportunities with attractive return potential in the UK market, particularly given the DECC’s proposal to close the RO (Renewables Obligation) scheme to new solar PV capacity above 5 MW from 1st April 2015. We will also invest in sourcing and building a substantial and sustainable pipeline looking into 2015 and beyond.”

Contractors reached a major milestone at Manchester Victoria station last weekend as the largest steel section of the new roof was installed.

Morgan Sindall is main contractor on a £44m transformation of the Grade II listed building. A key component is the new roof, which allows for future expansion of the station.

The work is part of Network Rail’s wider £1bn+ Northern Hub and North West Electrification Programme.

Steelwork subcontractor Severfield began lifting into place the first of 15 giant curved ribs that will support the roof in May.

On Saturday 2nd August the ninth and largest steel rib was lifted in to place using a Liebherr LR 1750 lattice boom crawler crane, supplied by Weldex.

Measuring nearly 100 metres long and weighing nearly 70 tonnes, the beam was lowered into place to form the corner section of the station’s new roof.

Later this month, work will begin to install the roof’s ETFE (ethylene tetrafluoroethylene) panels, a lighter and cheaper alternative to glass. The material, which is used at Manchester Piccadilly station, Birmingham New Street station and the Eden Project in Cornwall, will allow natural light into the station.

All curved steelworks are expected to be in place by mid September. In total, Severfield is supplying and erecting some 1,900 tonnes of structural steel, with the project's scope also involving the construction of a mezzanine floor to link the station to the Phones4U Arena as well as lifts and a feature staircase.

The remaining roof sections will be installed over the next few months with the whole station redevelopment scheduled for completion in early 2015.

Severfield chief executive Ian Lawson said: "The eye catching canopy roof will be the latest of our steel structures to become an iconic urban landmark, following hard on the heels of the Philharmonie de Paris and the Clyde Gateway Smartbridge.”

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Monthly rents in the UK, excluding London, have increased by 4% annually to £689 with six tenants are chasing every available property across the country, the highest since 2011, the latest rental index shows

Overall demand for rental properties across the UK has increased by 15% annually, while the supply of rental homes has dropped 17%, the Sequence report also shows.

Meanwhile, in London rents have reached a four year high, increasing 10% annually to £1,515 and tenant demand has been rising at more than nine times the rate of supply.

According to Stephen Nation, head of lettings for Sequence, which includes Barnard Marcus, William H Brown and Fox & Sons, the rental market in London is a hive of activity, with close to seven tenants chasing every available property.
‘Demand to rent in the capital is rising at more than nine times the rate of supply reaching a four year high of £1,515 per month, up 10% annually,’ he pointed out.

The report also shows that applications for buy to let mortgages have reached the highest level in 2014, so far increasing by 14% annually in June and 12% since May. Nation explained that buy to let mortgages are not subject to scrutiny under the new mortgage market rules and change to pension annuities has also encouraged more investors to look to property for their pension pot as house prices and rents continue to rise.

Nationally, excluding London, the number of viewings is up 6% annually and 2% since May, the highest number of viewings in one month since November 2011.

However, new agreed tenancies are flat on the month but up 17% annually, just off their September 2013 peak. The flat monthly growth means that the ratio of viewings to new tenancies has marginally increased to 7.0/1 from May, but annually it has dropped from 7.7/1. Nation said that this suggests that competition in the market is hotting up and when tenants view their ideal property they are moving more quickly to secure it.

London viewings have increased by 25% annually and by 2% on the month in June. New agreed tenancies are up 28% annually but are flat on the month. This has resulted in a slight increase in the ratio from 12.7/1 in May to 12.9/1 in June.
‘Across the country it is clear that the rental market is very active this year, which goes to show how a healthy rental market works independently of the sales market,’ added Nation.

More than half of the UK’s specialist construction contractors are now seeing their workload rising, according to a new survey, while nearly three-quarters are confident of growth ahead.

The latest state of trade survey by the National Specialist Contractors Council (NSCC) found that 57% of specialist firms saw their orders increase in the second quarter of 2014, compared to 27% a year ago.

The difference between respondents reporting an increase in orders and those reporting a decrease – the balance – reached its highest level since 2000.

Some 59% of specialist contractors said they expect workload to increase during the third quarter and a record high of 72% expect to see an increase over the next 12 months.

84% of respondents reported that they are now working at or above 75% capacity with 43% above 90% capacity. This is leading to difficulties for some firms with 64% experiencing increased supplier prices and 19% reporting they are unable to bid for work due to skills shortages – which is well above the five-year average of 6%.

There was a slight improvement in payment practices this quarter with 16% of specialist contractors getting paid in an average of less than 30 days. This is the highest result ever recorded by the survey.

In another first for the survey, the number of respondents waiting more than 60 days for payment – 14% – was lower than the number receiving payment within 30 days.

More European style family apartments should be built in Ireland to help tackle the nation’s lack of affordable housing, according to a new report from chartered surveyors.

The Society of Chartered Surveyors Ireland has also called for a reduction of VAT on new home building at a time when there is concern about rising house prices and the low level of house building currently being undertaken.

The SCA has published a strategy that is says will ensure there is an adequate supply of houses in urban areas and in Dublin in particular.

The proposals also suggest an exemption on property tax for people trading down, the establishment of a builders' finance fund, and the introduction of a vacant site levy on vacant sites with residential development potential.

The society said the builders' finance fund would help smaller builders and would speed up housing developments of between 15 and 250 units that have slowed down or stalled.

The society also said that if future apartments were designed for family living it would reduce pressure on the supply of traditional three and four bedroom homes.

The Society, which is the professional body for the property and construction sector, said it is concerned about a lack of new homes available at a time when house prices are rising, particularly in Dublin.

The latest house price figures from the Central Statistics Office show that house prices in Dublin are 24% higher than a year ago and the Society says this is simply not sustainable.

Only 8,301 new houses were built in Ireland last year while the Housing Agency has pointed to a need for 80,000 units over the next five years, or approximately 16,000 per annum with half of those required in Dublin.

Chairman of the Residential Group of the SCSI, Simon Stokes, pointed out that new houses cannot be supplied on tap and that the lead in time through construction and to completion generally takes a minimum of two years.

‘Our strategy document focuses on practical steps which can accelerate the delivery of new homes. There is a lack of development finance for builders but the government could address this by establishing a Builders Finance Fund. In the UK a BFF fund of €660 million has been established to help smaller builders and to speed up housing developments of between 15 and 250 units which have slowed down or stalled,’ said Stokes.

‘A reduction in the VAT rate for the hospitality sector worked extremely well here in recent years, boosting the tourism sector and helping to create 15,000 jobs. We believe a reduction in the current 13.5% VAT on new homes to 5% for a period of two years could have a similarly positive impact on house building and job creation,’ he explained.

‘The need to fund infrastructure in advance of a development being completed is a significant barrier to unlocking supply and we believe the creation of a Revolving Infrastructure Fund could address this issue. RIF’s are not grants or subsidies but…

Almost half a billion pounds is being allocated to build thousands of new affordable homes in London, mayor Boris Johnson has announced.

Some £404 million has been allocated under the Mayor's ambitious plans to increase house building, which also include funding for the London Housing Bank and Housing Zones as part of an overall £1.25 billion package to deliver 45,000 affordable homes by 2018.

It will result in almost half of London's boroughs running their own development programme with funding from City Hall and 11 housing associations running large scale construction programmes of over 500 homes each.

These latest allocations will unlock a total investment of £4.23 billion into house building in the capital. Of the 54 providers receiving funding, Notting Hill Housing Trust have won the largest allocation with £59.3 million to deliver 2,250 homes.

Overall some 15 boroughs in all corners of the capital are also benefiting with Waltham Forest receiving £9.7 million to deliver 387 homes, while in Lambeth 303 homes will be delivered with an investment of £10.9 million. For the first time the Greater London Authority is also making an allocation to Grainger Trust, a significant private landlord active since 1912, which has been allocated £5.6 million to deliver 195 homes.

In addition, the Mayor is taking forward five bids for a portion of a further £85 million to establish an innovative revolving fund that could see up to 5,000 homes built over a longer period by 'recycling' investment. The revolving fund bids, including one from the Big Issue Foundation and another from Mill Group, are part of the Mayor's drive to attract wider sources of investment to support house building and develop longer term funding packages with individual providers.

‘The only way to address the huge demand for housing and tackle the 30 year back log of under supply is to build more homes. We've worked closely with expert housing providers to ensure this funding will deliver much needed low cost homes across the capital,’ said Johnson.

‘These latest funds, together with innovative measures to unlock land and development being pioneered by City Hall, will produce thousands more good quality affordable homes for Londoners to rent and buy. We will continue to work with the government, developers and investors to drive forward and deliver the thousands of homes needed in the capital,’ he added.

The Mayor is on course to deliver more affordable completions this financial year than at any other point since 1980 as part of his pledge to build 100,000 affordable homes over two terms, with 78,000 completed so far. Over this investment period, over 4,000 housing schemes will have been built with support from City Hall to deliver more affordable housing for Londoners.

Since taking on almost 700 hectares of surplus public land in 2012, the Mayor has already moved 87% of it into development. There is capacity for thousands more homes on strategic public land across the capital, ripe for development, and the Mayor is lobbying the government for…

The average time it takes to sell a property in Britain has reduced to 88 days, some 16 days or 15.38% faster compared to the same time last year, new data shows.

It is the fastest selling time recorded since 2007, according to the research from residential property group Move with Us.

It shows that properties in Greater London were selling the fastest in the second quarter of 2014 with an average of just 43 days. This was followed by the South East and East Anglia where the selling times were the fastest in five years, taking an average of 59 and 68 days respectively.

At the other end of the spectrum, properties were slowest to sell in the North East where the average selling time reached 138 days in the second quarter of 2014. However, this was still 50 days or 26.6% quicker in a yearly comparison and the second biggest change outside of Greater London since 2007.

‘The market has gained a spring in its step thanks to increased confidence and more readily available funding bringing more buyers to the market,’ said Robin King, director at Move with Us.

‘Faster selling times have now spread outside Greater London and the South East where competition has always been relatively strong compared to areas such as the East and West Midlands where the market has taken longer to recover,’ he explained.

He pointed out that the average selling time is now almost back to the pre-crash levels of 2007. ‘Due to faster timescales, buyers should do all they can to get ahead of the competition and make sure they secure their dream home,’ he added.

The firm advises buyers to get financially and legally prepared when they first start looking to buy. ‘This will help to make sure they don’t miss out on their chosen home as they will stand out as a serious buyer and it will have the added benefit of working to reduce timescales,’ said King.

A breakdown of the figures show that after Greater London and the South East the region with the fastest selling time is East Anglia with 68 days followed by the South West at 68, the East Midlands with 87 and the West Midlands at 89.

Average selling time in Scotland is 106 days, in Yorkshire and Humber 110 days, in the North West 114 days, Wales 129 days and the North East bottom at 138 days.

The residential property market in Spain is set to bottom out next year and see a 2% rise in prices in 2016, according to ratings agency Standard & Poor’s.

It is well documented that the fall in prices has been slowing in recent months and the agency is predicting that prices will fall overall by 2% this year compared with 4.6% in 2013.

Property prices in Spain have fallen around 30% since the economic downturn hit the country’s real estate markets in 2008.

S&P says that the positive outlook for the property market is down to a faster than expected recovery of the Spanish economy and a subsequent quicker fall in unemployment.

According to the Spanish Central Bank the country's economy grew by 0.5% in the second quarter of 2014, the fastest rate in six years, and the latest job figures show that 192,000 people had joined the country's workforce in the 12 months to the end of June.

Experts say there has been a change in trends in the Spanish property market in the last 12 months with the arrival of British and US property funds who are taking advantage of the offers in the Spanish property market.

But the market is unlikely to recover everywhere at the same pace. It is predicted that properties on the coast, including areas popular with second home owners, will see prices rise first.

However, according to S&P the long term recovery of the property market could be kept on a leash by the high number of properties on the market in Spain and the country’s population decline could also put a brake on the long awaited recovery.

S&P said in January that Spain's housing market was overvalued by somewhere in the region of 12% to 20%.
According to Mark Stucklin of Spanish Property Insight, Standard & Poor’s is a bit more pessimistic than other agencies, who believe a recovery may begin as early as 2015.

Several reports in recent weeks have spotlighted the slowdown in the price declines, prompting different analysts to predict the bottom of the market may be nearer.

Building maintenance workers employed by Mears on a Brighton & Hove City Council are heading towards a dispute, their union has warned.

The GMB union says that Mears is threatening to change terms and conditions of employment and to withdraw from an agreement for the union to represent members.

The workers were transferred under TUPE legislation from the council to Mears on the outsourced contract for home improvements and maintenance. The Transfer of Undertakings (Protection of Employment) Regulations 2006 (or TUPE) legislation protects terms and conditions of employment and the agreement for the union to represent members. The contract is worth £12m a year to Mears and covers 12,500 homes.

Mears wants the workers to adopt new contract terms but GMB members are refusing.

GMB branch secretary Mark Turner said: “GMB members didn't ask for or want this potential dispute but neither will we shy from doing what's right to protect the terms and conditions of our members.

“The current agreement was put in place when staff TUPE’d to Mears from the council. This was done to ensure that all transferring employees didn't find themselves disadvantaged moving to a profit driven organisation.

“Mears have consistently failed to abide both by the content and spirit of the agreement from the start and have through this and other actions clearly indicated that they don't have the inclination or will to work with unions on any occasion.”

GMB organiser Gary Palmer said “Local managers failure to not only comply with the current agreement, but to instead look to bully their way to changes as an alternative to working with us instead, is not only unacceptable but has, as joint unions, left us potentially with one choice in reacting strongly if they don't remove the threats.

“We will of course sit and discuss the matter with Mears. However, unfortunately, because we no longer trust local management we would expect commitment in writing from them that they will adhere to existing agreements before we do so.

“Going forward I feel it really is time that the council look to not only cancel the housing repair contract with Mears but to look to take the provision back in house, only then perhaps staff would be respected and treated fairly with their terms and conditions protected."

A new match-making service has been launched to help people wanting to develop their own house find a suitable builder.

The initiative is the result of the Federation of Master Builders (FMB) teaming up with the National Custom & Self Build Association (NaCSBA).

Self-builders can now find an FMB member firm through NaCSBA’s online resource, the self-build portal.

The FMB’s ‘Find a Self-Build Contractor’ service is free to use and draws on a database of over 1,500 local contractors.

FMB chief executive Brian Berry said: “Interest in self-build solutions is growing stronger every day and the government is now putting in place policies which should help more people to realise the vision of building their own home. As this happens, self-builders will need a pool of capable and experienced contractors and a trusted means of finding the right one. That’s why the FMB has created this service and we’re very pleased to have been able to team up with NaCSBA to deliver this through the self-build portal. This is the product of the building industry and self-build representatives working together to facilitate the growth of self and custom build, which will improve the choice available to customers in the new homes market.”

NaCSBA chairman Michael Holmes added: “Around half of all self-builds in the UK are carried out by main contractors on behalf of a private client. This service is the first of its kind to enable self-builders to get in touch with those contractors who can offer them the specialist service they require. It should save self-builders time and effort, is more likely to result in a better 'match' and, of course, it is a great way for FMB members to find the right clients.”

An inquest into the death of the founder of Gloucester-based contractor Markey Construction has ruled that asbestos was to blame.

Hugh Brendan Markey died in hospital on 12^th November 2014, aged 78. An inquest last week determined that he died as a result of exposure to asbestos early in his building career, reports Stroud News & Journal.

Mr Markey began as a self-employed builder in 1963 and built up a business that today, under the management of his sons Paul and Tony, has more than 200 employees.

The inquest heard that Mr Markey had seen a specialist surgeon in 2010 with breathing difficulties. He later suffered a stroke.

County coroner Katy Skerrett said: “It is more likely than not that asbestos exposure was the significant factor causing him to pass.”

A more robust private rented sector needs to be created in Scotland and more land made available for building new homes, according to a new report from the independent Scottish Housing Commission.

Made up of a cross section of housing industry experts and led by the Royal Institution of Chartered Surveyors (RICS) the commission has made a series of recommendations across all property tenures.

In particular it calls for a renewed emphasis on establishing a sufficient quantity and quality of land for housing, including the creation of new communities across Scotland aimed at addressing potential crises in Scotland’s housing market.

The report says that the imbalance that exists between supply and demand for housing remains an on-going problem in today’s, and potentially tomorrow’s, Scottish housing market.

It makes 15 recommendations and identifies three key issues for Scotland’s housing future, namely: housing land supply, new housing growth and the emerging importance of the private rented sector.

‘A substantial increase in land supply for housing would assist development partners in their business preparation, reduce land costs and impact positively on the affordability of housing. In addition, scaling up production of new house building across all tenures is in our view an essential aspect in a sustainable housing solution for Scotland,’ the commission report points out.

‘By promoting the creation of up to eight major new communities, either as new towns, regenerating existing communities or an expansion of existing plans, could make major in-roads in addressing Scotland’s acute housing need in the decade that lies ahead. At the same time this would give a continued shot in the arm to the Scottish economy, by creating new jobs and supporting existing economies,’ it adds.

The report also suggests that a greater level of attention toward the private rented sector could help alleviate pressure on the market. According to the latest RICS Residential Market Survey, a net balance of 25% of chartered surveyors reported a rise in tenant demand within the private rented sector, with respondents reporting growth in demand through 2014.

‘An effective, regulated private rental market is vital for future housing in Scotland. Significant investment in a private rented growth plan for Scotland is required to provide security for the growing number of families and individuals depend on privately rented properties,’ said commission chairman Tom Barclay.

The report further recommends that the Scottish government put in place a Change Fund to support the social housing sector. ‘The social housing sector has the potential to play a major role in delivering smarter and better housing outcomes in Scotland. However, in terms of finance, evidence from lenders suggests that the risk rating of the housing association sector in Scotland has increased as a result of welfare and pension reforms, as well as a reduction in capital subsidies,’ it explains.

‘The fund would facilitate potential partnerships, both constitutional and non-constitutional, helping shape new business models, evaluate transfers of stock between organisations, and, in essence, help provide a stimulus to give greater vitality to the sector,’ it…

The UK, excluding London, has seen new buyer registrations rise 21% annually, while new property instructions are up by just 2%, according to new research.

At the same time the property market is described as buoyant with prices up 1% on last month and 8% annually to £175,728, says the report from Sequence which owns over 300 estate agent branches.

But the London market is slowing. In London new instructions are up 8% on the month and 19% annually but new buyer registrations are down 14% on the month.

There are 11 new buyers for every new property in the capital, a drop from 14 last month. The data also shows that London house prices are flat on the month, but up 21% annually to £457,833.

Overall mortgage applications seem to have bounced back following the new MMR regulations which were introduced in April and have increased by 13% on the month.

‘Demand for properties across the UK remains robust with new buyer registrations up over 10 times the rate of new instructions which are up 2%,’ said David Plumtree, chief executive officer of Sequence.

He pointed out that there are now over six buyers for every property coming onto the market, a two year high for June but in London there has been a slight cooling in demand. ‘This has led to an adjustment in pricing, with prices remaining flat on the month as vendors look to be more flexible in their views on sale price. There is still a great deal of activity in the market, with the number of viewings and offers up annually by 7% and 17% respectively,’ he explained.

‘This activity is translating into sales, which are also up 10% annually, so while there is a slight shift in the balance of supply and demand, the number of new properties on the market remains low and we still have close to 11 new buyers competing for every new instruction,’ he added.

He also pointed out that despite mortgage applications weathering the MMR regulations figures are still 5% below last year, although the appetite to buy across the UK remains very strong.

A strengthening UK economy and more buoyant employment market has translated to a pick up in the prime lettings market in London in the first half of 2014.

The prime central London (PCL) market saw growth of 2.9% in the first half of 2014 compared to falls of 1.9% over 2013, according to the latest report from real estate firm Savills.

The firm says that while high stock levels remain an issue in some areas, the return of the family market resulted in rents increasing 3.4% for houses compared to 0.9% for flats over the quarter.

International tenants are now more dominant in the PCL market than those from the UK. In 2013 and the first half of 2014 they accounted for 75% of tenants, with Western Europeans the largest sub group. For all tenants the largest employment sector in PCL is financial and insurance services which accounts for roughly half of market demand.

However, there is evidence that the tenant profile is widening and becoming less dependent on this sector alone. The proportion of those working in the financial and insurance sector has fallen from 55% in 2011 to 47% during the first half of this year.

‘While this may temper rental growth for PCL property over the short term, strong employment growth in the professional, media and communications sectors is likely to underpin demand in this market going forward,’ said Lucian Cook, director of residential research at Savills.

The prime outer London markets that includes popular areas such as Islington, Clapham and Wimbledon, have benefited over the past three months from the pickup in demand for family housing.

The prime north west markets of Hampstead and St John’s Wood saw the strongest quarterly growth across prime London, with average rents increasing 2.2% as low stock levels of family houses has intensified competition.

Prime south west London also saw demand for large family housing increase and average rents for five plus bedroom properties rose 1.6% over the quarter. However, in this area demand from singles and sharers unable to buy in the highly competitive London housing market resulted in higher rental growth for flats. Smaller properties have seen stronger annual growth than houses, with rents for one bedroom properties increasing 2.2%.

Over the past six months the prime east of City markets of Canary Wharf and Wapping have seen the strongest rental growth across prime London, with average rents increasing 3.1%. ‘Canary Wharf has been the driver of this growth due to the continued strong demand from corporate, students and sharers and a current lack of stock on the market. With an average pound per square foot of £27 compared to £40 across all prime London, these markets are attractive for the relative value they provide,’ explained Cook.

The report also shows that across the commuter zone, average rents in prime cities and towns rose 1.2% annually compared to 0.6% for rural properties. Similar to the prime sales market, the trend for urban living remains more popular than rural living…

Strong output growth was sustained across the UK construction sector during July but delivery times are lengthening and subcontractors are getting harder to find.

Although the pace of expansion moderated slightly from the four-month high recorded in June, growth remains strong. The year-on-year jump in house-building output was the highest seen since November 2013.

The seasonally adjusted Markit/CIPS UK Construction Purchasing Managers’ Index (PMI) registered 62.4 in July, down slightly from 62.6 in June but above the neutral 50.0 mark for the 15th successive month. The score remains one of the highest seen since the summer of 2007. Anecdotal evidence widely cited resurgent demand for construction projects, especially in the housing sector.

Civil engineering activity also expanded at a sharper pace in July, but commercial construction increased at a slower rate in July than had been seen in June.

Higher levels of construction output were supported by a further steep improvement in new business intakes during July. New orders have now increased in every month since May 2013. Survey respondents linked the latest expansion to favourable domestic economic conditions and greater confidence among clients.

The rate of job creation across the construction sector was the fastest since the survey began in April 1997. Anecdotal evidence attributed rising payrolls numbers to increased workloads and ongoing efforts to boost capacity. In some cases, survey respondents noted that staffing levels had been increased in response to concerns about subcontractor availability. The latest survey indicated a reduction in subcontractor availability for the 13th month running, while rates charged by subcontractors increased at a near-survey record pace.

Construction companies indicated another steep increase in purchasing activity during July, thereby extending the current period of expansion to 14 months. Strong demand for construction materials in turn placed additional pressure on suppliers during July, as highlighted by a steep lengthening of vendors’ delivery times. Survey respondents widely commented on low stocks and capacity shortages at suppliers. Meanwhile, average cost burdens increased sharply in July, with the pace of input price inflation easing only slightly from June’s six-month high.

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Markit senior economist Tim Moore, the author of the Markit/CIPS Construction PMI, said: “July’s figures suggest the UK construction sector is enjoying its strongest cyclical upswing since the global financial crisis, while a new record rise in employment highlights that construction firms are increasingly confident about the sustainability of the upturn.

“All three core categories of construction activity saw historically steep improvements in output levels through July, unsurprisingly led by a resurgent house building sector.

“Overall the survey adds to the view that construction companies have performed impressively so far this summer, which raises the likelihood that the sands of time could wash away the construction weakness seen in the preliminary second quarter GDP release.

“Looking ahead, a pressing concern for construction companies is the availability of materials and suitably skilled labour to support the recent growth streak. Cuts to supplier capacity have ushered in the worst period of input delivery delays since the survey began in 1997, while this summer has also been notable for construction firms reporting near-record increases in rates commanded for subcontracted work.”

David Noble, chief executive of the Chartered Institute of Purchasing & Supply (CIPS), which sponsors the survey, said: “The house-building sector is racing ahead this quarter with the fastest growth in construction of homes for over a decade. The industry as a whole continued its impressive growth, dipping slightly from last month’s high. The boom in house-building also encouraged the fastest acceleration in employment the index has ever seen over its 17 year history. The commercial and civil engineering sectors also pulled their weight with continued growth, to deliver one of the fastest overall increases in output since 2007.

“One concern however, is the strain on supply chains that could become a roadblock to sustained growth in the future. Construction firms reported the sharpest deterioration in the quality of subcontracted work since 1999, which combined with lengthening supplier delivery times could conspire to put the brakes on the sector’s growth. But there’s evidence that firms are starting to look beyond in-demand sub-contractors and instead further boost their own staffing levels, which goes someway to explaining the record rise in employment levels.

“In the short term at least, the outlook for the coming quarter is strong with the level of new orders continuing to rise and confidence for the year ahead growing steadily since June.”

The construction industry will grow by 10.0% over the next two years, according to latest forecasts from the Construction Products Association (CPA).

The association is forecasting that construction output will grow by 4.7% in 2014 and 4.8% in 2015.

Over the next five years, total construction output will rise by 22.2% it says.

Private housing starts are expected to grow by 18.0% this year and 10.0% in 2015, while commercial office construction output should grow by 10.0% this year and 8.0% in 2015;

CPA economics director Dr Noble Francis said: “The forecasts reflect the increasing strength of the sector, though risks remain. We anticipate the recovery will continue through the forecast horizon in 2018 and broaden both across sectors and regions. Overall levels of activity will likely match their 2007 peak in 2017.

“In the short-term, the activity will primarily be led by private housing, infrastructure and commercial. Notably, in the long-term, we expect this activity will be boosted by work on schools and hospitals.

“The private housing sector continues to benefit from the improving economic backdrop and government policy measures, with housing starts expected to grow 18.0% in 2014 and 10.0% in 2015. The pending general election, however, will cast the future of housing policies into doubt. Such uncertainty, together with questions about affordability and higher mortgage repayment costs, will likely subdue private housing growth to 5.0% per year from 2016.

“Commercial, the largest sector, has a greater influence than housing on the overall outlook for the construction industry and should contribute 23.4% growth over the forecast horizon to 2018.

“The offices sub-sector is the primary driver in commercial, and recovery in the sector has been dominated so far by growth in London. Activity in regional markets is starting to pick up, however. During the last 18 months, increased demand and rising rents have been reported in key regional markets such as Manchester, Edinburgh and Birmingham which should feed through to new offices construction from 2015. Therefore, commercial offices output is forecast to rise 10.0% in 2014 and 8.0% in 2015.

“The association anticipates infrastructure output will increase during the forecast period across all key sub-sectors including roads, rail, energy, and water and sewerage. Output is expected to rise 9.2% in 2014 and 7.0% in 2015, primarily due to major projects such as Crossrail and nuclear decommissioning.”

Dr Francis concluded: “This represents the association’s central forecast but there are risks on both the upside and downside. Forecasts continue to be revised up as the UK economy rebalances away from consumer spending and services towards manufacturing. Greater than expected UK economic growth could stimulate even more private sector construction.

“Conversely, concerns regarding house price inflation may lead to the imposition of lending constraints. This, combined with interest rate rises, may have an adverse impact upon effective demand, and consequently, house-building.”

Despite an upturn in UK construction output, Morgan Sindall has yet to find profits any easier to make, the company said today.

Announcing half-year results, chief executive John Morgan said: “For the remainder of 2014, the operating environment for general construction is expected to remain challenging with no easing of pressure on margins.”

Morgan Sindall’s prospects were improved, however, by growth in its urban regeneration business, Muse.

Group revenue was down 2% for the six months to 30 June 2014 to £998m (2013 H1: £1,019m). Adjusted operating profit (excluding intangible amortisation) was down 6% to £15.2m (2013 H1: £16.2m). Reported pre-tax profit for the first half was £14.0m, up from £1.8m last year.

The urban regeneration business contributed £3.5m of operating profit, up from £400,000 last time.

Within the construction & infrastructure division, revenue was down 4% to £567m and adjusted operating profit was down 8% to £5.9m. “The overall trading environment for construction & infrastructure has remained difficult throughout the period,” Mr Morgan said. “The combination of lower margins from work tendered in 2012-13 and cost inflation, both at a time of improving general market activity, has provided some significant on-going challenges particularly in the construction activities.”

The group's committed order book as at 30 June 2014 was £2.7bn, an increase of 14% since the previous year end, driven primarily by growth in the order books of fit-out (up 57%), affordable housing (up 27%) and construction & infrastructure (up 9%).  The regeneration & development pipeline was £3.2bn, an increase on the previous year end of 5%.

Mr Morgan said: "The first half has seen an important shift in the balance of our profits, with an increase in the contribution from the urban regeneration business. This trend is expected to continue into the second half and beyond and reinforces our long-term strategy of focusing on both construction and regeneration activities.

“For the remainder of 2014, the operating environment for general construction is expected to remain challenging with no easing of pressure on margins.  However, with continued positive momentum anticipated within both fit-out and urban regeneration, the group remains on track to deliver results for the full year in line with the board's expectations.

“We are encouraged by the improvement in the quality of our order book reflecting the higher level of activity in the market, which positions us well for the medium to long term."

International ground engineering specialist Keller Group has seen profits and revenue grow by more than 20% in the first half of 2014.

For the six months to 30 June 2014, group revenue was up 22% at £788.2m (2013 H1: £644.6m) and operating profit increased 24% to £35.5m (2013 H1: £28.6m).  At constant currency, and including acquisitions, group revenue increased by 33%.

A charge of £30m has been taken for a contract dispute. This aside, profit before tax was £32.5m for the first half, up 21% on the same period last year.

The £30m provision relates to a dispute on a UK project completed in 2008.  The claims against Keller are the subject of ongoing litigation. 

Businesses in the USA and Australia saw particular improvement.

Chief executive Justin Atkinson said that he and the board “remain optimistic about our long-term prospects”.

The pace of residential property price growth in the United States is set to slow this year and continue doing so into 2018, according to real estate experts.

The result of the latest quarterly Zillow Home Price Expectations Survey, which takes into account the views of more than 100 expert panellists, suggests that home values will end 2014 up an average of 4.6% from 2013, to a median value of $177,895.

They also expect values to exceed their 2007 peak levels by the end of 2017, roughly a decade after the housing bust and ensuing recession began.

The survey also reveals that 85% of the experts expect the median age of first time home buyers to rise to 32 or higher in next 10 years.

On average, the panellists expect interest rates on a 30 year, fixed rate mortgage to reach approximately 5.3% by the middle of 2016 and this could slow down the market as first time buyers put off making a purchase.

Indeed, the report says that overall the national home ownership rate fell in the second quarter, and a majority of experts said they expect it to fall further in coming years as the Millennial generation delays home purchases and the age of typical first time buyers continues to rise.

In 2013, the typical first buyer was 31 years old, according to the National Association of Realtors and the survey asked panellists for their expectations regarding the median first time buyer age over the next decade.

Infrastructure services group Renew has agreed the takeover of utilities contractor Forefront Group for £14.8m.

Founded in 1995, Forefront is based in Leigh-on-Sea and operates across southeast England, replacing gas mains under framework agreements with National Grid and Southern Gas Networks.

With 350 employees, Forefront is working on the industry’s 30-year mains replacement programme, replacing more than 150km of iron gas mains pipes a year with polyurethane ones. Forefront specialises in both low and medium pressure outlets up to 48-inch diameter. The business also deals with emergency gas leaks and has a specialised under pressure drilling capability. Forefront also provides a complete reinstatement service and operates its own material recycling facility.

In the year ended 29 March 2013, Forefront’ turned over £26.9m and had an operating profit of £1.7m. For the year to 28 March 2014, revenue was down to £23.3m and the business only broke even as workflow was reduced ahead of the start of a new framework for National Grid. Revenue and margins have now returned to previous levels and Renew expects Forefront to deliver both growth and profits.

Forefront was principally owned by Harwood Capital and associated entities and the company’s founder and chief executive, Bradley Beard. Mr Beard has entered into a new 12 month service contract, which cannot be terminated by either party within the first two years and the whole forefront management team will remain with the business.

Renew chairman Roy Harrison said: “The acquisition of Forefront takes the group into a new sector within the rnergy market and is in line with our strategy of broadening our range of engineering services supporting critical UK infrastructure. As part of the Renew Group, Forefront, which has a leading industry reputation, will continue to develop its strong, independent brand. The gas mains network replacement programme provides Forefront with long term visibility and excellent growth opportunities.”

The acquisition has been funded from Renew’s cash resources and a four-year term loan of £12m provided by HSBC Bank.