Henry Boot has seen a strong rise in profits in the first half of the year despite a decline in revenues.

For the six months to 30 June 2014, Henry Boot’s profit before tax increased 81% to £13.4m (2013 H1: £7.4m)

Each of its business segments traded well in the period in line with the general economic recovery and returning market confidence, the company said.

Revenue was lower at £65.8m (2013 H1: £81.8m) as a one-off £15m land sale last year was not repeated. However, operating profits were 79% higher at £14.0m (2013 H1: £7.8m) as a result of several land sales and combined development property sale profits and valuation gains of £2.1m, compared to a combined deficit of £0.3m in 2013.

Henry Boot’s land and property development arms continue to be busy. At Markham Vale, its 200-acre business park venture with Derbyshire County Council, two factory developments totalling 50,000 sq ft are due for completion imminently and the construction of two industrial units, totalling 150,000 sq ft, is expected to start by the end of the year.

A retail warehouse scheme in Livingstone is also expected to start soon, while in York there is continued good progress with the redevelopment of the former Terry's Chocolate Factory.

Chairman John Brown said:  “Commercial development activity is now at its highest level since 2007 with new, pre-let developments achieving hurdle rates of return, expected to commence in the second half of the year. The combination of this increased level of commercial development, our strategic land sites with well over 10,800 permissioned housing units available for future sale and the solid returns from the construction segment should strongly support growing shareholder returns into 2015 and beyond.”

The construction division has now won enough orders to achieve its budgeted turnover for the year and is on course to hit profits targets. The 2015 order book is also starting to build, the company said, and prospects were good thanks to various frameworks in the health and education sectors.

Banner Plant has also seen a further improvement in activity in the first half. “Utilisation and, more recently, rates have improved slightly which, if maintained through to the year end, should result in the delivery of a better result than 2013,” Mr Brown said.

Architecture practice Aukett Swanke has recruited Beverley Wright from CH2M Hill to be its new group finance director.

She starts on 15^th September. Current incumbent Duncan Harper will stay on for a month to hand over.

Ms Wright has more than 25 years finance experience within construction and engineering firms, including 16 years at Mowlem plc before joining Midas Group in 2005 as group finance director.

She moved to CH2M Hill in 2006 as commercial and financial director Europe, becoming international commercial director in 2013.

Aukett Swanke chief executive Nicholas Thompson said: "We are delighted to welcome Beverley to the board. She brings a wealth of commercial experience to Aukett Swanke along with significant financial expertise both in the UK and internationally. Beverley will be a valuable addition to the executive team as we pursue our growth objectives. "

London home buyers are willing to pay a substantial premium to live near a tube or train station with homes within 500 meters commanding some £42,000 more compared to one 1,500 meters away.

On average, London houses closest to Circle line stations are the most expensive while those nearest the Metropolitan line are cheapest, according to the research by the Nationwide Building Society.

The Nationwide examined how the proximity to a tube or railway station impacted property prices in Greater London after taking account of other property characteristics, such as property type, size and local neighbourhood type.

‘Our research illustrates that people are willing to pay a significant premium to be close to a station, and suggests that this premium has increased relative to two years ago when we last explored the issue,’ said Robert Gardner, Nationwide's chief economist.

In general the premium that buyers are willing to pay increases as you move closer to a station. A property located 1,000 meters from a station commands a 4.9% premium, whilst at 750 metres this increases to 7.6% and 10.5% for a home 500 meters from a station.

The report points out that just 6% of properties in London are more than 1,500 meters away from a station, and the vast majority of these are in outer suburban areas, where stations tend to be more spread out serving larger catchments.

Excluding the City of London, Camden is the borough best served by the tube and rail network, with 85% of properties within 500 meters of a station. Whilst Camden has always benefited from a high density of tube stations, it has also recently seen improved rail services thanks to London Overground. However, it is also one of the most expensive areas of the capital, with average prices currently around £843,000.

Havering, Bexley and Barking and Dagenham are amongst the least connected boroughs, with fewer than 20% of properties within 500 meters of a station. Average house prices tend to be lower in these areas, but this also reflects that they are further away from central London.

Amongst the outer boroughs, Brent stands out as having good transport connections, with more than 50% of properties within 500 meters of a station. Brent benefits from access to a number of tube lines, with the Metropolitan, Jubilee, Piccadilly and Bakerloo all passing through.

The research also looked at which tube line is associated with the highest house prices. The Circle line serves the capital’s most expensive areas taking in much of central London and also parts of west London. Average house prices are over £800,000 in areas where the nearest station is on the Circle line.

Average house prices are least expensive where the nearest station is on the Metropolitan line. This probably reflects that the line stretches towards the outer suburbs, with only a short section in central London.

The Nationwide has conducted similar research for Manchester and Glasgow, looking at the impact of rail links on local property prices. ‘London home…

The level of England’s new housing construction activity in the April to June quarter of 2014 was unchanged on the first quarter but up 18% year-on-year.

The latest statistics show that there were 36,230 new housing starts in England between April and June. Although this is the same amount that was seen in the previous quarter, it represents an increase of 18% on the same quarter last year.

It brings the total number of starts over the last 12 months to 137,780, which is a 22% increase on the previous year and the highest level of house building since 2007.

The government said that the construction sector had now been growing for 15 consecutive months, and is currently experiencing the sharpest rise in house-building orders since 2003. Companies are taking on new workers at the fastest rate since 1997, it said.

Seasonally adjusted house-building starts are now 112% above the trough in the first quarter of 2009 but remain 26% below the last peak seen that was seen in the first quarter of 2007, just before the bubble burst.

Seasonally adjusted completions are estimated at 29,540 in the second quarter of 2014, 6% higher than the previous quarter and 7% higher than the same period last year.

Annual housing completions in England totalled 114,440 in the 12 months to June 2014, an increase of 7% compared with the previous 12 months

Last year successful applications for major housing schemes were up 23%, and planning permission was granted for 216,000 new homes.

Housing minister Brandon Lewis said that the figures were evidence that the government’s long-term economic plan to improve the housing market is working. He said: “Wherever you look across the housing market, the signs of progress are clear. House-building in England is up by over a fifth compared to last year, orders for building materials are rising at the quickest pace for 11 years, and companies are hiring new staff at the fastest rate since 1997.”

He said that “improving the housing market will remain a vital part of our long-term economic plan”.

The GMB union is organising a strike ballot of 45 members employed by Kier Refuse Services in Kings Lynn and West Norfolk in a pay dispute.

Since its acquisition of May Gurney last year, Kier is responsible for waste and recycling services for Kings Lynn and West Norfolk Borough Council.

The company has made a final pay offer to its workforce of a 1.75% increase over 15 months in response to a claim for 4% over 12 months.

The ballot of members closes on 27th August 2014 and members are being asked to support strike action to secure a better offer.

GMB regional officer Glenn Holdom said: "This insulting pay offer does not reflect the effort put in by the operatives to fulfil the conditions of the contract. Even then it is a 15 month deal because they want to change the anniversary date to 1st July.

“The company response is not acceptable to our members and they view this as the straw that has broken the camel’s back.

“There have been a number of aggravating issues on this contract such as round imbalances, increased working hours and level of agency staff being used since the TUPE transfer from Veolia in April 2013.”

GMB is involved in a separate dispute with Kier Group across the UK as it is one of the backers of the now-defunct Consulting Association that contractors used to blacklist workers they considered undesirable. Kier is now one of eight firms behind The Construction Industry Compensation Scheme, which the unions are also against as they see it as a way to pay off victims cheaply to avoid more costly court judgments.”

Home sales in Spain are increasing but price are continuing to fall with the latest data from the Notaires showing transactions up 16% compared to a year ago.

But the same set of figures show that prices are down 5.7%, although the general opinion is that the Spanish property market is well on its way to recovery.

Apartments saw the biggest jump in sales activity with an increase of 11.6%. The average price per square meter was €1,214, a 5.7% drop from a year and 35.7% below prices in 2007.

The Notaires said that the jump in sales is a normalisation in the wake of changes in tax laws, but it also represents a stabilisation of monthly sales. For example, the number of sales from January to June was similar to the number of transactions in the same period of 2013, at 29,171 in 2014 compared to 27,958 in 2013.

Meanwhile a village in Spain with the country’s oldest population is so desperate for people to come and live and build new homes that it is selling building plots at bargain prices.

It is possible to buy land to build a home in the village of Olmeda de la Cuesta, 100 miles from Madrid, from €160 for 60 square meters, rising to €1,300 for 205 square meters and there are eight plots available.

‘We want to attract more people so that the village does not disappear. Buyers can build a house of up to three floors and can put in a garden. Some plots have caves that can be used as wine cellars,’ said mayor, José Luis Regacho, who is one of the youngest residents at the age of 47.

The village once had 500 residents but now there are only 15 permanent residents and 20 home owners that return for weekends and holidays. The average age is 75. It has a church, a medical clinic that is staffed once a week and a bar. The local school closed 40 years ago, due to a lack of students.

It is the second time that the village has sold bargain plots. Last year six plots were sold for between €600 to €3,500 but this time the prices are much lower.

However there is a downside. ‘This isn't a place where people can move and expect to find a job. There are really no work opportunities here,’ said Regacho who commutes weekly to his job in a city 30 miles away.

‘It would be perfect for people who want a quiet place to relax or to get away from daily life. Or a writer who wants a quiet place to work or an artisan who wants a place to make and store products,’ he added.

More homes are being built in England with housing starts up 18% in the second quarter of 2014 compared to a year ago, the latest construction data shows.

Housing and Planning Minister Brandon Lewis announced that there were 36,230 new housing starts between April and June, bringing the total number of starts over the last 12 months to 137,780, a 22% increase on the previous year and the highest level of house building since 2007.

He pointed out that government efforts to help people onto the housing market are working with almost 40,000 households have bought a home through Help to Buy, with over 80% of sales going to first time buyers purchasing new build homes.

He said that the direct result is a new generation of home owners and a 34% increase in private house building during the first year of the scheme.

At the same time the construction sector has been growing for 15 consecutive months, and is currently experiencing the sharpest rise in house building orders since 2003, while companies are taking on new workers at the fastest rate since 1997.

He also pointed out that a growing pipeline of new projects is also emerging from the reformed planning system. Last year successful applications for major housing schemes were up 23%, and planning permissions were granted for 216,000 new homes.

Also published were the latest figures for Right to Buy, which allows people to buy their council homes. In the second quarter some 2,845 council owned properties were sold, a 31% increase on the same quarter last year, and bringing the overall number of homes sold under the reinvigorated Right to Buy to nearly 22,500.

Receipts from additional sales are now being recycled into building new affordable homes. In the last quarter councils received £211 million, and started work on 675 new homes, bringing the total number of replacement homes started to almost 3,700. More than 480,000 new homes have now been delivered since July 2010, including almost 200,000 affordable homes.

‘Wherever you look across the housing market, the signs of progress are clear. House building in England is up by over a fifth compared to last year, orders for building materials are rising at the quickest pace for 11 years, and companies are hiring new staff at the fastest rate since 1997. Hardworking tenants are also voting with their feet and taking up the Right to Buy,’ said Lewis.

‘This progress did not happen by accident. It bears testament to our efforts to reform the planning system and help home buyers while paving the way for house builders to boost their output. But there’s still more to do, and improving the housing market will remain a vital part of our long term economic plan,’ he added.

However, some property industry experts are pointing out that this is still nowhere near the number of new homes that are needed. ‘The tide is gradually moving in the right direction but the UK property industry can’t forever compare itself…

Property sales in the UK fell by 1.3% in July compared with the previous month but were 13.5% higher than the same month last year, the latest data from HMRC shows.

The seasonally adjusted estimate for July was 101,190 for residential properties and 9,330 non-residential transactions.

Meanwhile, the number of registration applications received by the Land Registry in July totalled over 1.4 million with the South East submitting the most.

There were 359,687 applications in respect of registered land, 653,293 were applications to obtain an official copy of a register or title plan, 202,740 were searches and 80,360 were transactions for value.

The slight fall in transactions revealed by HMRC is nothing to worry about, according to experts who point out that there is usually a slowing in the summer months.

Indeed, Peter Rollings, chief executive officer of Marsh & Parsons, believes that the market is returning to more natural and orderly trading conditions. ‘Buyers and sellers are finding the property market a less intimidating environment than it seemed a few months ago. The number of house sales may have fallen in the month to July 2014, but it still represents a steady and sustainable increase of activity when compared to the picture a year ago,’ he said.

‘In the short term, the introduction of more stringent borrowing regulations and affordability criteria in the spring tempered the market. But all the ingredients are in place to ensure the continued vigour and vitality of the housing recovery,’ he explained.

‘A surge in supply of available properties is soothing competition and keeping house price growth in check. Buyers and sellers alike have a bigger selection of choice available to them when looking to step onto the housing ladder or trade up, sending budding shoots of consumer confidence all the way up the chain,’ he added.

The Competition & Markets Authority (CMA) has approved Wolseley UK’s purchase of Fusion Provida UK and Utility Power Systems.

Fusion Provida UK (FPUK) and Utility Power Systems (UPS) have been acquired from the Fusion group. FPUK supplies utility infrastructure products and UPS supplies and hires out pipe jointing equipment to utility contractors. With close to 200 employees, the businesses operate from 11 depots around the UK, including a national distribution centre and national sales office in Chesterfield, Derbyshire.

The deal was originally announced on 1^st April 2014 but has now received formal clearance from the competition authorities.

Wolseley UK managing director Steve Ashmore said: “The acquisition gives Wolseley UK an excellent opportunity to expand its presence in the utilities supply chain. It is a strong next step in our strategy to grow in this marketplace and trade in areas where we are equipped to win.

“Fusion Provida UK and Utility Power Systems’ great customer service and expertise fit well with Wolseley UK’s strategy and values. Working alongside our Burdens business and led by Burdens’ managing director, Keith Dorling, they can help us fulfil our potential in the infrastructure and utilities marketplaces.”

Fusion has decided to focus on its core manufacturing activities – electrofusion fittings, polyethylene pipe jointing equipment and tooling, black pipe extrusion and fabrications.

There are three long-term supply agreements in place between FPUK and Fusion Group for: electrofusion fittings; black polyethylene pipe and fabrications; and pipe jointing equipment, tooling and associated spares.

Two brothers from Stoke-on-Trent, described as having little or no experience of building and construction work, have been sent to prison sentences after exposing site workers to asbestos.

Akram Hussain, 52, and Inam Hussain, 47, were refurbishing a former print works on Scotia Road, Burslem. At least seven workers are known to have been exposed to asbestos on the project since February 2012, with one of them aged just 17 at the time.

Stafford Crown Court heard yesterday (20th August) that neither was qualified or experienced in construction, demolition or refurbishment work, nor were they licensed to remove asbestos.

Akram Hussain is a snooker hall manager and Inam Hussain a taxi driver, although they have been carrying out the work on the building for around 10 years.

The Health & Safety Executive (HSE) prosecuted the brothers after an investigation found that work was being carried out without the necessary asbestos surveys and without a construction, design and management (CDM) co-ordinator in place, which is required if work is to take more than 30 days.

Despite repeated visits from HSE inspectors and numerous enforcement notices warning them of their failings, the brothers continued to refurbish the building and disturb asbestos material, putting workers at risk.

A prohibition notice was issued on 17th February 2012 stopping all asbestos-related work. A ‘direction to leave undisturbed’ was also issued for the building until HSE had provided written confirmation that work could continue.

However, several lorry-loads of waste contaminated with asbestos were removed from the site and taken to an unlicensed waste disposal site in Stoke-on-Trent.  Workers were also witnessed leaving the site covered in dust and not wearing appropriate protective clothing.

A further prohibition notice and an improvement notice were served on Akram Hussain on 25th February 2012 when inspectors again found work being carried out without an asbestos survey or a CDM.

A separate prohibition notice was also served on Inam Hussain on 18th May 2012 for the non-licensed removal of the asbestos from the building. An improvement notice was served at the same time for the ongoing failure to appoint a CDM co-ordinator.

An asbestos survey was later carried out, but work inside the building continued to disturb materials containing asbestos.

The court heard that the HSE knows of at least seven workers being exposed to asbestos in the building. Many more could have been exposed during the course of the refurbishment project over the years.

Akram Hussain and Inam Hussain both pleaded guilty to breaching section 3(2) of the Health and Safety at Work etc Act 1974. Akram Hussain was given a custodial sentence of 22 months and ordered to pay costs of £43,000. Inam Hussain was given a custodial sentence of 14 months.

HSE inspector Lindsay Hope said after the hearing: “The Hussains have shown a willful disregard for the health and safety of workers and others. Our investigation uncovered a catalogue of serious errors, safety failings and a disregard of the laws around the safe and correct removal of asbestos.

“This was an appalling case of failing to properly plan, manage and resource this project, which led to workers being exposed to risks to their health from asbestos.

“It is essential at the outset of a building refurbishment to first seek specialist advice regarding the possible presence of asbestos within that building. Only with the full knowledge of what is present, or not, can any asbestos then be dealt with safely.

“Failure to identify and deal with any asbestos can lead to it being damaged and people then breathing in the fibres. The Hussains failed in their duty by choosing to ignore the dangers of this hidden killer.”

New mortgage rules introduced in the UK in April have contributed to an acceleration in bridging lending in the 12 months to the end of June, it is suggested.

Growth in bridging lending has increased to 24% per year, up from 18% before the new MMR rules and annual gross lending has reached a record £2.17 billion, with £470 million lent in just last two months.

The data from the latest West One bridging index also shows that loan volumes are up 28% year on year and borrowers see interest rates close to historic lows, averaging 1.14% over the last two months.

‘Bridging is firing on all cylinders. And this is down to a number of positive factors all coming into alignment over the past few months. Thanks to the constructive approach of the financial regulators, the new MMR affordability assessments don’t apply to most bridging loans. Due to the nature of short term secured finance, the loan term is almost always less than a year and interest is often rolled up,’ said Duncan Kreeger, director of West One Loans.

‘By contrast, post-MMR delays in the mainstream market have crept into many areas of buy to let and commercial lending. So many property investors are now more actively choosing to bypass the usual lenders from the start as the high street is forced to focus its attention on simpler cases,’ he explained.

‘This is combining with a growing awareness about what bridging finance can get done, thanks in no small part to the growing expertise of specialist brokers. As the variety of borrowers grows in line with the sheer numbers of inquiries, we don’t expect this acceleration to reverse any time soon,’ he added.

The index report suggests that the most recent spurt of growth in the bridging market is being driven by progress in both the size and number of loans being written. The average loan size now averages £475,500 over the 12 months to 01 July, a 14.8% improvement on the previous twelve months, when the average loan was for £414,000.

Greater loan volumes have been even more significant, with a 28.2% improvement over the last 12 months. This is driven in particular by a 13.5% increase in loan volumes on a bimonthly basis, the two months from 01 May to 01 July, compared to the two months before the Mortgage Market Review.

‘Property prices are rising, creating both an opportunity for investors and a challenge for those in need of affordable homes or workplaces. Bridging lenders are responding with the finance that can help ease the squeeze on supply, in loan sizes that are more than keeping up with the property market and in volumes that will make a real difference,’ said Kreeger.

He pointed out that average loan to value ratios have increased to a 12 month average of 47.3%, up considerably from the low of 46.5% witnessed over the previous 12 months, ending 01 July 2013.

Costain has decided not to bid for any more contracts in the waste sector after getting its fingers burnt in Manchester.

Costain started a £400m contract in 2009 to design and build a network of waste treatment facilities in Manchester for Viridor Laing. Of the 46 waste facilities to be provided under the contract, design faults have been identified at four sites, including one site that remains to be completed. The additional costs incurred here widened the operating losses in Costain’s natural resources division.  

“Excluding these costs the division generated an operating profit and is trading in line with expectations,” the company said.

It added: "The group is not pursuing any further contracts in the waste sector."

Costain’s infrastructure division, by contrast, is performing strongly, buoying up the business as a whole.

Revenue for the six months to 30 June 2014 increased 14% to £529.1m (2013: £462.9m) and group underlying operating profit was up to £11.2 million (2013: £10.7 million).

Pre-tax profit rose 87% to £5.8m (2013 H1: £3.1m). Even stripping out exceptional items –

 such as the £3.7m cost of trying and failing to acquire May Gurney last year – the adjusted profit before tax increased by 8% to £9.1m (2013 H1: £8.4m).

New business won during the first half year has pushed the order book, as at 30 June 2014, up 10% to a record £3.2bn (2013: £2.9bn). More than £950m of revenue has been secured for 2014, compared to £850m this time last year.

In the infrastructure division, revenue increased 36% to £358.7m (2013 H1: £262.8 million) while operating profit rose to £16.9m (2013 H1: £14.4m). The forward order book for the division has grown to £2.2bn (2013: £1.7bn) and the level of tendering activity remains high, the company said.

The natural resources division, which is focused on the oil & gas, nuclear process and water markets, saw its revenue shrink 15% to £169.4m (2013 H1: £199.2m) and operating loss widen to £2.6m (2013: £100,000 loss), due largely to the aforementioned Manchester waste contract.

The Manchester waste treatment network that Costain built for Viridor Laing's PFI contract includes the country’s first thermophyllic mechanical biological treatment – anaerobic digestion plant (MBT) to treat waste and produce green energy.

The 42 facilities comprise five of these MBTs in all, as well as 24 household waste recycling centres (HWRCs), four in-vessel composting (IVC) plants, one materials recovery facility (MRF), seven transfer loading stations and two green waste facilities.

Government plans to drop planning permission currently required for residential short lets is raising concern among politicans, property professionals and residents in a central London borough.

Under the proposals will end the necessity to apply for planning permission currently required to let out a residential property for a period of less than 90 days in London.

However, Westminster City Council says it is extremely concerned about these proposals, which are a piece of red tape cutting which might be helpful to people who want to rent out their property elsewhere, but which take no account of central London's circumstances.

The rental sector in central London is constantly under pressure because tenants unable to afford to buy in the capital, rent over long periods and like the stability and financial security that a long term rental property provides.

According to Martin Bikhit, managing director of estate agents Kay & Co whose rental department acts on behalf of a large number of private landlords, believes the change will cause a severe lack of longer term permanent residential accommodation.

‘The number of people prepared to pay very high rents for short term lets will tend to push out would be long term tenants and owner occupiers. Permitting short term rents, will effectively blight properties, turning blocks into badly managed hotels and resulting in long term residents having to put up with unsocial noise, lack of security and loss of neighbourliness, not to mention potential issues with prostitutes and housing benefit fraudsters, and an increase in unauthorised rubbish dumping,’ he said.

Opponents cite a case in Barcelona, Spain where Airbnb was fined €30,000 for transgressing the short lets laws in Barcelona where concerns are being expressed that the city is being taken over by tourists.

According to Westminster City councillor Heather Acton the case highlights why deregulation would be a disaster for central London. ‘The property industry is right to be worried. The relaxation of laws around short term lets will cause major issues and disruption for Londoners. We are taking this issue seriously and are seeking assurances from the Department for Communities and Local Government that they are too,’ she said.

The council has recently written to the secretary of state stating its case for planning control to be retained locally. ‘The major impacts of short term letting will be felt in central London’s apartment blocks, flats, and estates,’ explained Acton.

‘It will cause issues for people living in Westminster who will have to suffer everything from refuse waste in corridors to thumping music all night. Westminster's flats and houses should be for residents and not be drawing holiday makers away from our hotels and hostels,’ she added.

On the day that school pupils across the country get their GCSE exam results, the Federation of Master Builders (FMB) is urging them to consider a construction apprenticeship instead of going back to school for A-Levels.

The FMB points out that the building industry is experiencing a serious skills shortage as the industry looks to fill 182,000 jobs in the next five years.

“There has never been a more exciting time to begin a career in construction and we’re keen to demonstrate that A-Levels are not the only way forward for young people on GCSE results day,” said FMB head of external affairs Sarah McMonagle.

The industry is crying out for new blood. During the recession 390,000 workers left the sector and over the next five years an estimated 410,000 workers will reach retirement age.

Provisional statistics show that there were 314,600 apprenticeship starts in the first three quarters of the 2013/14 academic year but only 13,320 of these are in the construction, planning and built environment sector. Year on year the number of apprenticeship starts in this sector are decreasing (13,730 in 2012/13 and 13,920 in 2011/12).

Ware Construction managing director Chris Ware is a former FMB Apprentice of the Year. He said: “From personal experience I can say that apprenticeships are an excellent route for school leavers. I finished my apprenticeship in carpentry in 2007 after leaving school at 16 when I finished my GCSEs. I started my own company in 2010 in the midst of the recession and I now employ seven full-time members of staff along with seven subcontractors and I own four vans and a variety of machinery.”

With just four weeks to go until the residents of Scotland get to decide whether to break up the United Kingdom, the UK government has announced a £1.2bn funding deal for Glasgow infrastructure.

Chief secretary to the Treasury Danny Alexander and cities minister Greg Clark visited Glasgow yesterday to sign the Glasgow and Clyde Valley City Deal with local council leaders and the Scottish government.

The funding is expected to bring in a further £3.3bn of private sector investment into the proposed infrastructure investment programme over the next 20 years.

The UK government will provide £500m of funding, with £500m provided by the Scottish government and a minimum of £130m from local authorities across Glasgow and Clyde Valley.

This funding will be used to enhance transport infrastructure, unlock new sites for housing and employment and improve public transport. Funding from the UK and Scottish governments will be paid over a 20-year period in annual instalments.

Projects agreed under the deal include:

a £16m UK government contribution to a new £64m Stratified Medicine Centre of Excellence, which will provide life science research and innovation facilities at the New South Glasgow Hospitals Campus.

a £1.2m UK government contribution to a £4m MediCity Scotland facility to bring new healthcare services and medical technology to the market.

£1.7m UK government funding for a new £4m Centre for Business Incubation, Development & Recovery in Glasgow’s Merchant City.

The UK government has so far agreed 26 City Deals across the country, which is its way of injecting competition into the allocation of infrastructure funding and inducing local authorities to form partnerships with local private and public sector enterprises to formulate bids.

The referendum on independence for Scotland takes place on Thursday 18 September 2014.

Carillion has admitted defeat and ended its bid to persuade Balfour Beatty into a merger.

Balfour Beatty’s rejection this morning of Carillion’s third offer has prompted Carillion to give up and walk away.

Balfour Beatty said that unless Carillion accepted the sale of its US engineering subsidiary Parsons Brinckerhoff, then no deal could be agreed. Balfour’s board was also against Carillion’s proposed business plan, which envisaged a drastic reduction in UK construction activity.

In a statement this afternoon Carillion said: “The board of Balfour Beatty has not agreed to Carillion's proposal or to request an extension to the Put Up or Shut Up deadline which expires at 5pm tomorrow, 21 August 2014. Carillion therefore today announces that it is no longer pursuing such a merger.”

However, Carillion said that it still reserves the right to make another offer for Balfour Beatty, as allowed by the City Code on Takeovers & Mergers.

Carillion’s third and final offer was to hand Balfour Beatty shareholders a 58.268% share of the combined company.

The offer valued Balfour Beatty at £2,086 million. The two parties previously agreed an outline deal valuing it at £1,886 million, but that was before Carillion pulled out the surprise announcement that the deal only made sense if it could retain the revenues generated by Parsons Brinckerhoff.

Although the proposed deal has always technically been a merger, and has been presented as such, it was effectively a takeover, with all the top jobs going to Carillion executives. Philip Green would have remained chairman, Richard Howson CEO and Richard Adam CFO.

That Balfour Beatty’s board ever agreed to a deal in the first place indicates a willingness to surrender to takeover under the right terms.

Therefore this is not expected to be the end of the story.

Meanwhile, Balfour Beatty is still searching for someone to be its CEO. It has been without one for more than three months now, since sacking Andrew McNaughton on 6^th May.  

Cash sales made up 34.4% of total home sales in the United States in May 2014, the lowest share since May 2010, the latest data shows.

The figures from real estate company Core Logic, also show that the number of cash sales are down from 37.4% from the same month a year ago.

However, the firm pointed out that while the cash sales share also fell from the 36.9% reported in April 2014, cash sales share comparisons should be made on a year on year basis due to the seasonal nature of the housing market.

The share has fallen on a year on year basis each month since January 2013. Prior to the housing crisis, the cash sales share of total home sales averaged approximately 25% and the peak occurred in January 2011 when cash transactions made up 46.2% of total home sales.

Real estate owned (REO) sales had the largest cash sales share in May at 55.5%, followed by re-sales at 34%, short sales at 32.8% and newly constructed homes at 16.8%.

While the percentage of REO sales that were cash transactions remained high, REO transactions made up only 8.2% of total sales in May and therefore did not have a large influence on the overall cash sales share. In January 2011, when the cash sales share was at its peak, REO sales made up 24% of total sales.

Florida had the largest share of any state at 53.4%, followed by New York at 50.3%, Alabama at 48.9%, West Virginia at 48.3% and South Dakota at 46.3%.

Of the nation’s largest 100 Core Based Statistical Areas (CBSAs) measured by population, Nassau County-Suffolk County, New York, had the highest share of cash sales at 66.4% followed by Cape Coral-Fort Myers, Florida, at 64%, West Palm Beach-Boca Raton-Delray Beach, Florida, at 62.8%, North Port-Sarasota-Bradenton, Florida, at 62.7% and Detroit-Livonia-Dearborn, Michigan, at 61.1%.

With a consensus that the first Bank of England base rate interest rise since July 2007 is drawing ever closer on the horizon, it seems that around half of UK home owners are unconcerned about it.

Mortgage holders interviewed by Ipsos MORI on behalf of the Halifax building society found that while 41% say they are concerned there are wide regional variations.

Some 61% of home owners in the North East are not concerned, along with 60% in Wales and 58% in Scotland. But 53% of home owners in the South East are concerned, followed by 49% in the South West.
The research also found that 30% of mortgage holders in the North West would find it difficult to afford monthly repayments if the amount increased by up to £50, followed by 20% in Scotland and 21% in the North of England.

In the West Midlands 45% of home owners would find it difficult to afford repayments if they increased by up to £100 while 60% would find it difficult to afford payments if they increased by up to £150. While in the South West 46% would struggle if their monthly mortgage payment was £100 higher.

Other groups who are more likely than others to say they are concerned about interest rate rises impacting their mortgage payments are women at 45% along with 50% of those aged 35 to 44 and 48% of families with children. While 57% of those with variable rate mortgages compared to 43% of those with a fixed rate mortgage would be concerned.

Nationally 13% are concerned that they would find it difficult to afford their monthly mortgage repayments if the amount was up to £50 higher. A third, 33%, say they would struggle if the amount was up to £100 higher, and this figure rises to 42% for those on variable rate mortgages.

If their mortgage payment was £100 higher, a third of mortgage holders felt that they would have to reduce spending on everyday essential items such as food, energy, clothing and insurance. This rises to 39% for Londoners and those living in Wales.

‘Speculation of a potential rate rise has been high up on the news agenda for some time now so it is perhaps surprising that the majority of home owners are not concerned about this,’ said Craig McKinlay, mortgages director at the Halifax.

‘However, with base rate historically low, and the Bank of England reinforcing its position that there will not be a rush of successive rate rises, it is understandable as to why the perceived impact of future rises is being dampened and homeowner sentiment is reflecting this,’ he explained.

‘With the base rate remaining at 0.5% for over five years, a significant number of homeowners have not yet experienced the effects of a rate rise. While responsible mortgage lenders take in account potential rate increases as part of the affordability checks in the mortgage application process, the way in which people manage their remaining disposable income will…

New rules for UK regarding the immigration status of new tenants are set to place an unfair burden on landlords and lettings agents, it is claimed.

Landlord Assist said it is concerned that landlords and letting agents will soon be responsible for policing the immigration status of their tenants when the new rules which form part of the Immigration Bill and are due to become mandatory in 2015.

It means that that landlords must carry out certain checks on new tenancy agreements before allowing the tenant to move in. Failure to do so could result in landlords facing a fine of up to £3,000.

‘We are concerned that the new legislation will place unfair burden on landlords. Landlords or letting agents will not be familiar with Home Office documentation, passports for countries outside the EU and therefore could easily be presented with fake or falsified documents which they would be unable to differentiate from the originals,’ said Graham Kinnear, managing director at Landlord Assist.

The government says it will carry out a pilot scheme in one location in the UK in two months' time to check a tenant's right to be in the country. The location is yet to be announced.

It is widely reported that up to 85% of illegal immigrants end up living in privately rented accommodation and the legislation is being introduced to stop rogue landlords letting substandard property to low paid immigrants.

Stephen Parry, Commercial Director at Landlord Assist is concerned about the additional red tape for landlords and their letting agents. ‘Without proper education and training it is not viable to expect landlords and letting agents to be able to robustly police the government’s immigration strategy,’ he said.

‘Agents already undertake identity checks on prospective tenants but to be able to decipher Home Office documentation or visa documents is probably a bridge too far. We accept that agents should make efforts in this respect but feel it is unfair that they can have such a significant financial penalty hanging over them in the event that something gets passed them,’ he explained.

‘It seems logical that if the government wish landlords and their agents to carry out a specific function that they should provide appropriate guidance notes on how to do so,’ he added.

Landlord Assist is also worried that landlords who let their property themselves without the assistance of a letting agent may be targeted by illegal immigrants. A recent report stated that more than a third of these landlords make no checks whatsoever on their prospective tenants.

‘Landlords who don’t use a letting agent to rent out their properties should be mindful that they may be targeted by individuals who do not have the necessary documentation. We urge landlords to be vigilant with this matter and keep a close eye on their responsibilities,’ said Kinnear.

Must haves in the property world change all the time with the current list now including party barns, dressing rooms and plunge pools.

Studies are still popular but open plan living is a bit past it, according to the latest list compiled by property search firm Stacks.

‘Anything from a dilapidated outbuilding with dirt floors, to a properly renovated barn with underfloor heating and full sound system counts as a party barn and every home should have one,’ said Rachel Johnston from Stacks Property Search.

Next is a bar in the garden. This can be a cabana, a summer house or even a small covered space that can be dressed up.

Nowadays everyone seems to have too many clothes for a wardrobe so dressing rooms are on the must have list. ‘The best dressed houses all have a customised dressing room, sometimes sacrificing a bedroom for the purpose,’ explained Johnston.

And a swimming pool is no longer essential for the discerning home seller. Plunge pools are today's alternative to a swimming pool. They should have just enough space to plunge in and cool off, but take up less space, and require little maintenance compared to the full sized thing.

Completely open plan living is a bit passé, but blended areas that interconnect kitchen/living/dining/sitting/playing and watching, whilst still providing some privacy is on the desired list.

It used to be called a box room, but if it's big enough for a lap top and some files, it's a study and can add to the value and desirability of a property.

They used to be called fields, but now they're called paddocks and conjure up images of ponies and chickens, rather than a man with a tractor.

Things that have fallen off the desirable list include Jacuzzis which are apparently widely believed to be a health hazard along with egg shaped baths as the more classical look is in vogue.

Grey will be all over by 2016 and polished concrete has already gone out of fashion as have signature walls with oversized flowery wallpaper on one wall of a room.

If you must have a swimming pool then the advice it to go for an indoor pool, especially one that can open up to the gardens, with direct access from the house.

Subterranean floors without any natural light are out as are bifold doors as they're no longer aspirational, and can be found in every mass development. Quality is incredibly variable, and they're not really very practical.

Innovaré Systems, a manufacturer of structural insulated panels (SIPs), is reorganising its factory in Coventry to double production capacity.

Innovaré, a subsidiary of construction group Osborne, is restructuring material flow on the production line during a factory shut-down this week. The company says that simply by introducing these efficiency improvements it is able to double output of its SIPs.

Head of operations Simon Fletcher said: "We are always looking for ways to improve our efficiency and maximise our capacity, so that we can provide the best value and speed of build for our customers and achieve our promise of Complete Delivery. This will also allow us to take on larger and more ambitious projects. We can be even more flexible on the other ‘added value’ elements that we can offer bespoke to our customers.”

Gross mortgage lending in the UK reached £19.1 billion in July, some 7% higher than the previous month, according to the latest figures from the Council of Mortgage Lenders.

The amount is also 15% higher than July last year when it was £16.7 billion and the highest monthly figure since August 2008 when it was £19.3 billion.

‘Mortgage activity seems to have remained robust following the regulatory changes but the eventual impact of these remains uncertain,’ said CML market and data analyst Caroline Offord.

‘Property transactions in the first half of the year showed a 25% increase compared to the same period a year ago but, as set out in our recent market forecast update, we expect that intensifying affordability pressures could start to dampen this upwards trend,’ she explained.

‘Economic conditions have strengthened but while the Bank of England has signalled an improved economic outlook since May, headwinds remain and the message about future rate rises being measured and gradual remains unchanged,’ she added.

Balfour Beatty is still not happy with Carillion’s proposed business plan for a proposed merger of the two companies, despite Carillion yesterday improving the money on the table for Balfour Beatty shareholders.

There will therefore be no extension of the ‘put up or shut up’ deadline of 5pm tomorrow (21st August 2014).

Yesterday Carillion offered Balfour Beatty shareholders a 58.268% share of the joint company, instead of the previously suggested 56.5%, adding £200m to its valuation of the Balfour Beatty business.

But Balfour Beatty said that two deal breakers still remain. The first is Carillion’s business plan to shut most of Balfour Beatty’s UK construction business just when it is poised to benefit from market recovery. The second is Carillion’s insistence that the sale of US subsidiary Parsons Brinckerhoff should be scrapped.

Balfour Beatty’s board has unanimously concluded that the new proposal is still not in the best interests of its shareholders and has decided to reject the proposal.

Balfour Beatty said that it would therefore not be seeking an extension from the Panel on Takeovers & Mergers to allow any more time for talking. It reiterated its intention to remain on its independent path and sell Parsons Brinckerhoff. Canada’s WSP is reported to be the main name in the frame for this.

It also remains on a quest for a CEO. It has been without one for more than three months now, since sacking Andrew McNaughton on 6^th May.

The Health & Safety Executive is investigating the death of a construction worker who fell from the fire-damaged Eastbourne Pier yesterday onto the beach below.

Emergency services were called shortly after 4pm to reports that a man had fallen from the pier. An air ambulance landed on the beach next to the pier, but the 44-year-old man from Cumbria was declared dead at the scene from head injuries incurred in the fall.

The pier was destroyed by fire on 30^th July.

The clean-up operation has seen charred debris loaded into skips and repair work is progressing to make the site safe for re-opening of the undamaged section of the pier in September.

The Construction Workers Compensation Scheme (TCWCS) has launched a publicity drive in Scotland to find blacklist victims eligible for compensation.

But unions are saying that blacklisted workers are better advised to join the ongoing legal action rather than accept a pay-off.

TCWCS has issued a call north of the border to all those worked in construction anytime up to 2009 inviting them to contact the scheme’s administrators to find out whether they are entitled to financial compensation.

The scheme was launched on 4^th July (see previous report here) to pay compensation to those who suffered financially from being on the illegal construction industry blacklist run by the Consulting Association until it was closed down in 2009 after a raid by the Information Commissioner for breaching data protection legislation. Most major contractors used and contributed to the blacklist.

Eight of them – Balfour Beatty, Carillion, Costain, Kier, Laing O’Rourke, Sir Robert McAlpine, Skanska UK and Vinci – have admitted culpability and are offering compensation of between £4,000 and £100,000 to blacklisted workers.

The Consulting Association held the names of around 3,000 workers. According to figures published by the GMB union, there may be 574 people in Scotland who are eligible for compensation.

However, the GMB union is advising people that if they were blacklisted they stand to make much more by waiting for the outcome of litigation rather than settling for a fast-track pay-off.

A spokesperson for TCWCS said: “We are encouraging anyone in Scotland who worked in construction in the years leading up to and including 2009 to contact the TCWCS freephone helpline or look at the website for further information – we are really keen to find as many people as possible who are eligible for compensation, so do get in touch. Or if you know someone else who worked in construction, please encourage them to pick up the phone to us or log onto www.tcwcs.co.uk to find out whether they are eligible for compensation. Enquiries to the scheme are handled quickly and, if you are eligible, joining the scheme is completely free of charge. TCWCS is even covering the cost of independent legal advice for every eligible applicant to help them decide whether the scheme is right for them."

But GMB national officer Justin Bowden said: "Most people blacklisted by the construction companies behind TCWCS stand to win many times more from the courts. Therefore they should not be fooled by the cut price compensation on offer and should see it for what it is, a damage limitation publicity stunt.”

Law firm Leigh Day, acting for GMB, began action in July in the High Court in London seeking compensation for 122 GMB members blacklisted by Carillion and the other firms. GMB’s claims are joined with a further 449 claims by two other unions and one other party.

As part of the group litigation order, the four parties including GMB were given permission to write to all those blacklisted. The ICO has until 25th August to give Leigh Day  the addresses.

“Once we have the addresses we will be writing jointly to everyone,” Justin Bowden said. “When we write to all those blacklisted we will tell them that one purpose of the scheme is for the companies involved to avoid High Court litigation. We will urge workers to get in touch with their current or previous union for advice first.”

He added: “TCWCS does not mention that compensation in their scheme is capped, does not include damages for misuse of private information, and does not involve the companies giving any information about how they were involved in blacklisting. None of these restrictions are found in court.”

He concluded: “GMB has a simple message to anyone on the blacklist: get free legal advice from us or your union before you make any decisions. The companies should get serious and make proper restitution and close the book on this shameful chapter.”

Following discussions with Balfour Beatty’s major shareholders, Carillion has offered them an improved 58.268% share of the combined company if they accept a merger between the two companies.

Before talks broke down in the wake of Carillion’s surprise demand that the Parsons Brinckerhoff sale be cancelled, Balfour Beatty’s board had previously agreed to a 56.5% share for Balfour Beatty shareholders.

The new offer values Balfour Beatty at £2,086 million. The previously agreed deal valued it at £1,886 million.

Carillion said the improved offer represented a premium of 36% to the Balfour Beatty share price prior to news of the merger talks breaking and a 22% premium to the closing share price on 18th August 2014.

Carillion’s board said that it hopes that on the basis of these improved terms the board of Balfour Beatty will now get back round the table.

Under Stock Exchange rules, Carillion has until 5pm this Thursday, 21st August 2014 to make a final firm offer or to walk away. In order for discussions to continue and for mutual due diligence to be concluded, Balfour Beatty must request that the Panel on Takeovers & Mergers extend this deadline. Carillion said that it hopes this will now happen.

Carillion chairman Philip Green said "Given the scale of the prize for shareholders of both Balfour Beatty and Carillion from a merger of the two companies, the board of Carillion remains committed to moving forward in a constructive and collaborative way with the board and management of Balfour Beatty to create a world-class business and very significant value for the shareholders of both companies."

Although the merged company would be majority owned by Balfour Beatty shareholders, it would be controlled by Carillion executives, with a leadership team Philip Green as chairman, Richard Howson as CEO and Richard Adam as CFO – all from Carillion. Three Balfour Beatty non-executive directors would also join the board.

Carillion has also reaffirmed its offer to pay reasonable costs incurred by third parties bidding to purchase Parsons Brinckerhoff, up to £10 million in aggregate.

Within 20 minutes of Carillion issuing a statement outlingin its improved offer, the Balfour Beatty board put out a holding response, stating: "The board of Balfour Beatty notes the announcement made by the board of Carillion this afternoon. The board of Balfour Beatty will consider this announcement by Carillion and will make a further announcement in due course."

The world’s wealthiest people are looking to Monaco, the tax haven on the French Riviera, to buy property due to its low tax and banking services, but there is a lack of space.

It is experiencing a luxury housing boom that includes the world’s most expensive penthouse as developers prepare for an influx of millionaires and billionaires escaping higher taxes or a loss of banking privacy in Switzerland.

Wealthy buyers have always been drawn to Monaco’s security, sophistication and climate but now it is the financial rules that are seen as a must have, according to Jean Claude Caputo of Savills on the French Riviera.

New taxes on luxury homes in London and the United States are also adding to the attractions of buying in Monaco and it is estimated that one in three of Monaco’s 38,000 residents are millionaires.

As a result some of the world’s most expensive properties are being built including the Tour Odeon, a double skyscraper being built by Groupe Marzocco near Monaco’s Mediterranean seafront which has a 3,300 square meter penthouse with a water slide connecting a dance floor to a circular open air swimming pool. It is set to go on the market next year priced at around €300 million.

So far, the developer has found buyers for 26 of the 36 luxury homes that have been offered for sale in the Tour.

While Switzerland also has some of Europe’s lowest tax rates, it’s becoming less attractive to luxury home buyers as the country’s financial secrecy laws are eroded amid a move toward a global standard of information exchange between tax authorities.

Other jurisdictions, including Monaco, are looking for ways to tap into the wealth held in the Alpine country and Monaco has emerged as an obvious successor.

Asking prices for luxury homes in Geneva have fallen by an average of about 30% in the last 12 months and values have dropped by as much as 6%, according to Alex Koch de Gooreynd, of Knight Frank.

Central London’s luxury home market has also shown signs of cooling amid new taxes and more on the horizon. There is a capital gains tax being introduced on properties sold by people living abroad and the idea of a mansion tax is constantly discussed.

Larger apartments are in demand from home buyers moving their families to the principality. While just 15 new apartments sold there last year, the average price was €9.3 million compared with €2.9 million two years earlier, according to government data. The average price of homes with five bedrooms or more rose 24% last year compared with a 9% fall for studios, according to the report.

The Tour Odeon will be Monaco’s first high rise development since the 1980s. A quarter of the apartments sold on the open market by Groupe Marzocco have gone to expats from the former Soviet Union.

The lower floors were sold to Monaco’s government for use by local citizens, who will enter the building through a separate entrance.

But the tax…

UK house prices increased by 10.2% in the year to June 2014, down from 10.4% in the year to May 2014, the latest official figures show.

House price annual inflation was 10.7% in England, 3.5% in Wales, 6% in Scotland and 4.9% in Northern Ireland, the data from the Office of National Statistics shows.

Overall the figures show that house prices have been increasing strongly across most parts of the UK, with prices in London again showing the highest growth at 19.3%. In the South East prices were up 9.7% and in the East of England up 7.9%.

However, excluding London and the South East, UK house prices increased by 6.3% in the 12 months to June 2014 and on a seasonally adjusted basis, average house prices increased by 0.5% between May and June 2014.

The data also shows that in June prices paid by first-time buyers were 12% higher on average than in June 2013 and for existing owners prices increased by 9.5% for the same period.

The market is moving from strength to strength with widespread recovery apparent across the country and house price growth advancing in a steady, healthy direction, according to Peter Rollings, chief executive officer of Marsh & Parsons.

‘London remains at the top, driving national house price increases, demonstrating its exceptional appeal as a place to live and invest for both domestic and foreign buyers,’ he said.

‘Furthermore, the upturn in the market has boosted consumer confidence, encouraging sellers to put their homes on the market, resulting in a fresh influx of available properties for sale. This is good news for the London property market as it continues its strong, sustainable recovery,’ he added.

However, David Newnes, director of Reeds Rains and Your Move estate agents owned by LSL Property Services, believes that behind the scenes house price growth is more moderate and sustainable beyond London and the South East.

‘These two weighty regions distort the story and are not representative of the wider UK housing market and therefore should not disorient overarching government policy. Prices actually dropped in seven regions across England and Wales in June. This return to a more natural state of affairs indicates a stable market,’ he said.

‘Lending has largely adapted to the wave of regulatory changes in the spring, and sales are getting back on course as demand for homes increases with completions rising to the highest level in seven years in July. New buyer demand is a vital bedrock for the recovery to continue building on, and further interventions or borrowing caps could pull the rug out from under the market,’ he warned.

He also pointed out that outside of the capital, Help to Buy is giving many households a much needed leg up onto the ladder, helping activity levels and ensuring growth makes further headway to reach areas of the country that are still only just getting back on their feet.
There are signs of cooling, according to Sophie Carter, UK director of the US property investment…

Residential property sales in Spain increased by 8.8% in June compared to the same month a year ago, the latest data from the National Statistics Institute shows.

The year on year increase in June is the fourth consecutive monthly rise following those experienced in March, April and May, when home sales rose by 22%, 5% and 5.4%, respectively.

The rising sales trend also ends 10 consecutive months of year on year declines and the growth is mainly due to the sales of existing homes while sales of new homes fell by 3% year on year.

The highest number of home sales per 100,000 population were in Valencia followed by the Canary Islands and the Balearics. In relative terms, the regions where home sales increased most year on year were Madrid with a rise of 30.4%, Extremadura up 25.7% and Navarra up 19.3%.

The largest decrease was in Castilla-La Mancha with a fall of 21.6% followed by La Rioja where sales fell by 12.8% and Castilla y León where they were down by 10.3%.

The figures come as a new report indicated that foreign demand for second homes on the Costa del Sol has been strong this year. Overseas buyers regard property in the area as a bargain, according to the report from real estate consultancy Aguirre Newman.

It also reveals that 90% of foreign buyers them can afford to buy without financing while local demand is hampered by lack of mortgage choice.

There was a slight increase in the number of new developments being started on the Costa del Sol, according to the report, with four new developments being started in 2013. Not a single new development was started in the preceding three years.

However, the number of new homes for sale fell by 18% in 2014, from 18485 to 16,508 homes, and 30% of new homes on the coast remain unsold.

The average new flat for sale on the Costa del Sol is 127 square meters with two bedrooms and costs €196,956, whilst the average single family homes is 279 square meters and costs €393,520. That means prices have fallen 5.7% and 9.7 % respectively in a year.

Looking forward, Aguirre Newman forecast that holiday home prices in the best areas close to services and amenities will stabilise in 2014, but continue to fall this year and next in less attractive locations, thanks to the excess inventory and weak demand from local buyers.

A shift in supply and demand in the London prime property rental market is resulting in marked variations depending on location.

The latest rental values index from Chestertons recorded a decline in average rents of 0.8% in the 12 months ending in June 2014.

However, the Index showed a modest increase in average rental values of 0.5% in the second quarter compared to the first quarter of the year although figure this masks variation between submarkets.

The South West saw values fall 0.3% and was the only part of London to record a quarterly drop in prime rents while the North East and Central both saw rental growth of 0.9% over the quarter.

At local market level, Fulham experienced the biggest rise in rents with growth of 7.6% and the firm says this was due largely to strong demand for houses which were in very short supply, while Battersea suffered the sharpest decline with a fall of 3.5%.

The average weekly rent for the index stood at £912 at the end of June. The highest average weekly rental values were achieved in St John's Wood at £1,901, Knightsbridge/Belgravia at £1,804 and Mayfair at £1,700. The lowest average weekly values were recorded in Canary Wharf at £579, Tower Bridge at £468 and Kentish Town at £621.

With the economic recovery gathering momentum and simultaneously boosting the employment market, households are feeling more confident about property commitments, the index report says.

Recent survey evidence suggests that the majority of tenants would choose to own their property rather than rent, however with real incomes barely keeping pace with inflation and annual house prices in London rising by double digit percentages affordability is likely to make this an unobtainable dream for many. Average house prices in June in Kensington and Chelsea and Westminster, for example, were 57.5% and 54.4% respectively above their pre-global recession peak.

‘The tightening of mortgage lending criteria thanks to the implementation of the Mortgage Market Review, plus the likelihood that interest rates will rise before next year's general election and possibly before the end of this year, mean that many households will be forced into the private rented sector,’ the report points out.

The number of households in privately rented accommodation could rise by 131,250 between 2011 and 2021 even if the current ratio of 25% remains static. However, if the level of increase seen between 2001 and 2011 is maintained then this figure could rise to 492,630 or 34.5% of all households.

‘In the shorter term, with supply and demand becoming better aligned, rents are likely to continue to increase gradually across the board over the reminder of this year, aided by a likely rise in the number of forced renters. Increased activity from relocation agents also points to growing tenant demand from the corporate sector. The best prospects for growth lie in the decentralised areas where average rents are lower than in the prime central locations and will offer tenants better value for money,’ it explains.

‘In…

House-builder Persimmon has seen its half-year profits grow by more than 50%, thanks in part to increased use of offsite fabrication.

For the six months to 30 June 2014, Persimmon’s underlying pre-tax profit increased by 57% to £212.9m (2013 H1: £135.3m).

Total revenues of £1,198.1m were up 33% (2013 H1: £899.9 million).

Legal completions for the first six months of 2014 increased by 28% year-on-year to 6,408 new homes (2013 H1: 5,022) and the average selling price was 4.3% higher at £186,970 (2013 H1: £179,199). 

The board said that “the swift and significant increase in production has been supported by our Space4 manufacturing facility. This modern method of construction has enabled Persimmon to secure greater efficiencies in resourcing and site activities supporting the delivery of our build programmes”.

Space4 increased its output of insulated panel frames to construct 2,483 new homes in the first half of the year, a 37% increase over the first half of 2013.

Space4 operates the largest automated timber frame manufacturing plant in the UK.

Group chief executive Jeff Fairburn said: "Persimmon has produced another strong performance in the first half of 2014, taking advantage of the current market opportunities to deliver growth whilst strengthening the financial position of the business.

“As we have entered the traditionally slower summer trading weeks, we have been encouraged by our private sale reservation rate since 1 July which is currently running 9% ahead of the same period last year.”

Ibstock is increasing its UK brick production this year by 200 million units.

An additional 125 million bricks will be produced by Ibstock this year after a £22m redevelopment of a factory in Newcastle-under-Lyme last year and the re-commissioning of a mothballed plant in Leicester. 

With other production enhancements at other factories, the company is set to bring to the market almost an additional 200 million bricks in 2014.

Ibstock, a subsidiary of Irish building materials group CRH, closed its Leicester factory in 2008.

Total UK brick production in 2013 was approximately 1.73bn bricks.This year the figire is expected to be substantially higher, with Wienerberger also adding capacity this year at its 14 UK plants by 200 million bricks before the end of this year.