Average rents in the prime London market are back to peak levels but growth in the city is not uniform with levels in the east leading the growth, according to new research

Prime London rents are now outperforming underlying capital values for the first time in almost four years, with east of City markets up 8.2% versus their previous peak as financial sector confidence boosts demand, says the study from Savills.

It points out that the relocation family market is also in recovery, boosting prime central London values and overall stronger economic sentiment and a more buoyant employment market have translated into increased corporate budgets and a pick up in the prime lettings market in the first half of 2014, finally restoring average prime London rental values to their 2007 peak.

The pace of recovery remains slow but steady in a market where demand is largely matched by supply, in contrast to the stock constrained mainstream markets, and all prime London market segments are now in positive growth, the report says.

After rising just 0.6% in 2013, rents are up on average 1.4% in the second quarter of this year, outperforming underlying house price growth for the first time since September 2010, the firm’s prime lettings index shows.

Depending on location, growth has been driven by the family housing market, rising corporate relocation budgets and ongoing demand from singles and sharers in markets such as the east of City hotspots of Wapping and Canary Wharf, which have outperformed all prime London locations, rising 3.1% year to date to leave them 8.2% up on peak.

Rents in core prime central London locations have grown by 1.8% over the past quarter and by 2.9% year to date, following 1.9% falls in 2013. The return of the family market saw rents for central London houses rising by 3.4% in the second quarter, with international occupiers now accounting for three quarters of all tenants.

Yields in these core central locations such as Mayfair, Kensington and Chelsea, currently average 2.9% with investors most motivated by capital value growth and a secure store of wealth. Yields vary and are highest for properties worth less than £2 million, though rarely exceed 4%.

In contrast, income return is much more of a consideration for investors in the lower value Canary Wharf and Wapping markets which have more in common with the UK mainstream market, delivering an average gross yield of 4.3% for a typical two bed property worth around £700,000, rising to 5.1% for a one bed. Investor and owner-occupier demand has pushed east of City capital values up by 10.1% in the year to date, compared to just 2.5% for prime central London.

In the capital’s prime commuter zone average rents rose by 0.9% following a strong first quarter when it outperformed London. Savills says that this is a reflection of the ripple of demand from London seen in the sales market, and over the past 18 months people moving from London have accounted for 20%…

The latest UK house price index confirms that price growth is moderating, rising by just 0.1% in July, its slowest pace since April 2013.

The data from the Nationwide Building Society also shows that the annual pace of growth is slower, 10.6% in July compared with 11.8% in June.

The slowdown takes the average price of a home in the UK to £188,949 and Nationwide chief economist Robert Gardner said that although prices have now risen for 15 months in a row it is clear that the pace of growth is slowing.

‘The slowdown was not entirely unexpected, given mounting evidence of a moderation in activity in recent months. Mortgage approvals declined by almost 20% between January and May, and there has also been some softening in forward looking indicators, such as new buyer enquiries,’ he explained.

‘At least part of the slowdown in activity relates to the introduction of Mortgage Market Review measures. The modest rebound in mortgage approvals in June adds weight to the notion that the slowdown will prove temporary, though the underlying pace of demand remains unclear,’ he pointed out.

‘With the labour market strengthening, mortgage rates expected to remain low and consumer confidence rising, activity is likely to recover in the months ahead. Over the longer term, the trajectory of house prices will remain crucially dependant on supply side developments,’ said Gardner.

‘While there have been some encouraging signs that construction activity is picking up, the pace of home building continues to run far below most estimates of what would be required to keep up with household formation in the years ahead,’ he added.

According to Paul Smith, chief executive officer of independent estate agents haart, the latest figures are a welcome ‘pit-stop’ which is necessary for long term, sustained growth. He said that annual growth figures are always a far more reliable indicator of long term trends.

‘Some areas of London are undergoing a price correction whereby people are not willing to pay the prices as they stand, but the laws of supply and demand are still in place and we are seeing steady house price growth in the country as a whole. All elements are pointing to a very busy autumn for the market,’ he added.

The Nationwide also reports that a modest recovery in the number of housing transactions, a pick-up in house price growth and the introduction of higher stamp duty rates on more expensive properties have all contributed to a sharp increase in stamp duty revenues in recent quarters, the majority of which is paid on residential property transactions.

Indeed, stamp duty revenues are near the all-time highs recorded in 2007/2008, reaching over £10 billion in the 12 months to June 2014.

‘Variation in house prices have a strong impact on how much stamp duty is paid across different regions of the UK, with some regions contributing a much greater share of the total stamp duty revenues than their share of housing transactions might suggest,’ said Gardner.

The Nationwide estimates that London…

Prime waterfront properties in the UK are worth an average of 60% more than their inland counterparts, according to the latest index from Knight Frank.

However, a closer look at the data reveals that the premium varies by location. A waterfront position in South West England, for example, offers the most added value when compared to a similar property inland, with prices 75% higher.

Prime riverside homes in London add 55%, waterfront properties in the South East 44% and in East Anglia the premium is 41%.

But the report points out that it is not just the location that adds value to a waterfront property. Amenities are also a crucial factor for many buyers and having direct access to water is something many people are prepared to pay a premium for.

Private slipways are considered the most valuable feature, pushing up the waterfront premium by an average of 115%. Properties with a private mooring or pontoon see their waterfront premium rise by 104% and 100% respectively, while jetties and private beach access add 89% and 85%.

In terms of location types, homes situated on estuaries command the largest uplift of about 85% compared to a similar property inland. Prime harbour side properties enjoy an uplift of 83% due to their rarity and coastal properties are worth 56% more.

Heading away from the sea, lakeside homes are 37% pricier than their waterless equivalent, and being situated next to a river adds, on average, 57% to the value of a prime residential property.

Home to the longest coastline in the UK, the South West has long been a popular location for waterfront property buyers. Its popularity is such that buyers are willing to pay a 75% premium for a waterfront home here, the most added value of any region in the UK.

In this region the stretch of coast starting just after Mevagissy and ending at Falmouth, excluding Truro, is where the largest cluster of prime waterfront property in the South West is currently on sale.

There are also a number of additional peaks along the coast in prime locations in and around Dartmouth, Salcombe and along the North Cornwall coast in Rock. Prime waterfront properties available for sale in these hot spot locations tend to be situated on stretches of river, or in harbours and estuaries where the biggest value uplifts for waterfront property can be found.

Demand for waterfront properties is global. Knight Frank web search data shows that there was a 6% increase in the number of individuals from outside of the UK looking at waterfront properties last year, led by potential buyers in the US, Germany and Australia.

The analysis also shows that waterfront property buyers are getting younger. Over the last year, more than 60% of Knight Frank buyers were in their 40s or younger. Last year, the same percentage was aged 50 or over.

The government is inviting local authorities to pitch for grants worth up to £50,000 to be used to unblock stalled house-building projects.

The Department for Communities & Local Government has a pot of £3m available, that it reckons is enough to get work started on 85 sites around the country and 25,000 new homes.

Estimates suggest there are 50,000 new homes with planning permission on which construction work has yet to start, for whatever reason, often relating to completing financial agreements or signing-off conditions attached to planning permissions.

New director of policy and external affairs at the Association for Consultancy & Engineering (ACE) is barrister-turned-lobbyist Julian Francis.

Dr Francis is a Cambridge graduate, a barrister and holds a doctorate from the Institute of Commonwealth Studies. He joins the ACE from the London Taxi Company, where as head of government affairs he ran lobbying campaigns.

Before joining ACE, Julian was at the London Taxi Company  where he had direct responsibility for the development of the organisation’s policy positions, and led on communicating this to ministers, policy makers, MPs and the media. Prior to this, Julian worked in a variety of policy roles including as Political Advisor to the London Borough of Tower Hamlets and as Communications & Public Affairs Director at Pancresta Ltd . He graduated from Cambridge University with BA and MA in Law, qualified as a Barrister and also holds a PhD Degree from the Institute of Commonwealth Studies.

 ACE chief executive Nelson Ogunshakin said: “Julian brings with him a wealth of experience from which to provide renewed strategic direction and drive to ACE’s engagement with government and key stakeholders.”

Dr Francis said:  "Over the coming months and years the main policy debate in this country will be over the provision and regeneration of the infrastructure network and I look forward to helping shape this debate with ACE's wide membership."

A new treatment that stops wallboard going mouldy has been patented by Microban International.

The patent covers the incorporation of an antimicrobial additive package into the wallboard to resist the growth of mould and mildew.  The patented wallboard employs a two-part antimicrobial system and an innovative targeting approach to provide protection against mould, mildew and fungus.

Microban specialises in built-in antimicrobial product protection. It has secured a European patent relating to treated wallboard. It already has wallboard technology patents in other parts of the world, including North America, China, Hong Kong, Australia and Brazil.

“In wall board, fungal issues typically occur at the interface between the paper and the gypsum core,” said Dr Ivan Ong, vice president for research & development. “Fungal infiltration of this nature can occur without visual cues until it becomes extensive and damaging. The patent provides an effective and manufacturing-friendly method to deliver a combinatorial package of antimicrobial agents to specifically target microbial issues this interface.”  

The private rented residential sector has overtaken the social rented sector in England to become the second largest tenure in the country, according to new figures.

The data from the English Housing Survey 2012/2013 shows that there were an estimated 22 million households in England of which 65% or 14.3 million were owner occupied, 18% or four million were privately rented and 17% or 3.7 million were socially rented.

The report also shows that there has been a decline in the proportion of younger people aged under 35 taking out mortgages, down from 21% in 2008/2009 to 18% in 2012/2013.

In comparison the percentage of private renters aged 25 to 34 increased from 31% in 2008/2009 to 45% in 2012/2013.
An analysis of the figures shows that renters, private and social, tend to spend proportionally more of their income, on average, on housing costs than those with mortgages.

On average, owner occupiers buying with a mortgage spent 20% of their income on their mortgage. In comparison, private renters spent 40% and social renters 30% of their income on rent, although both private renters and social renters tended to earn less. Just under a third, 30%, of all private renters had a household income that exceeded £700 a week compared with 47% of owner occupiers.

In 2012/2013 those who had taken out their mortgage within the last five years paid an average of £187 per week on their mortgage. This compared with £133 among those whose mortgage had been running for five years or more.

The majority of all householders were satisfied with their accommodation, but owner occupiers were generally more than other tenures. Private renters were more likely than social renters to expect to own their own property in the future.

Overall, 95% of owner occupiers said that they were satisfied with their accommodation. In comparison, 81% of social renters were satisfied, and 84% of private renters. Around half, 52%, of private renters agreed that their current tenure was a good way of occupying a home. This was much lower than among social renters at 82% and owner occupiers at 93%.

Some 61% of private renters reported that they anticipated owning their own property in the longer term with 27% reporting that they expected to still be renting from a private landlord in the longer term.

The majority, 80%, of social renters anticipated that they would remain renting in the social sector in the longer term, with just 16% reporting that they wanted to own their own home in the longer term.

Among social renters who expected to buy, the proportion who expected to buy their current home increased from 37% in 2011/2012 to 44% in 2012/2013. The report says this may, in part, be explained by the reinvigoration of the Right to Buy scheme which allows local authority tenants to buy their home at a discount. Average housing benefits receipts were higher for private renters and the amount of rent paid after housing benefit was also higher for private…

A gang of 20 has been jailed for stealing more than £8m in a sophisticated tax fraud.

The 17 men and three women were arrested by HM Revenue & Customs (HMRC) officers during an investigation that revealed construction-related tax offences and money laundering over a two-year period.

Investigators uncovered a large and complex web of illegal activity involving more than 100 businesses. Subcontractors were employed off-record and the gang members pocketed income tax and national insurance contributions due to be paid to HMRC. Fake invoices, supposedly for providing labour, had also been created to claim VAT refunds to which the gang were not entitled.

HMRC investigators carried out searches at more than 40 homes and offices across the UK in September 2009. They seized paperwork, computers, class A drugs and almost £170,000 in cash from 11 business properties in the West Midlands and Manchester. Smaller quantities of US dollars and Euros were also discovered.

All defendants have now been sentenced following three separate trials at Birmingham Crown Court, and reporting restrictions have been removed.

HMRC assistant director Colin Booker said: “Today’s final sentencing brings to an end a six-year investigation, centred on a highly organised and complex fraud, undertaken by a group of individuals who cared for nothing but their own financial gain.

“HMRC is investing more time and resources than ever into identifying fraud. Our work does not stop at sentencing, but at depriving those involved of the proceeds of their crimes. Confiscation action will follow, as we attempt to recoup some of the £8 million the gang so shamelessly stole from the taxpayer.”

Birmingham Crown Court sentenced the following defendants yesterday following a 13-week trial:

• Anthony O’Neill, aged 41 and from Bolton, Greater Manchester, had denied five charges of VAT fraud and conspiracy to launder money. He was jailed for eight years.
• Michael Maguire, 43 and from Bury, also denied five charges of VAT fraud and conspiracy to launder mone. He was jailed for five years and nine months.
• James Keith Radford, 53 and from Manchester, similarly had denied five charges of VAT fraud and conspiracy to launder money. He was jailed for six years.
• Stanley Turner, 62 and from Blackpool,had denied a fraud offence and was sentenced to 18 months imprisonment suspended for two years.
• Christopher Standring, 47 and from Bury had admitted five charges of VAT fraud and conspiracy to launder money and was jailed for five years and six months.

The following defendants were sentenced after separate earlier trials:

• Bernard Harper, 58 and from Halesowen, was described as a construction boss and was described by the judge as “the centre of the fraud and an organiser of it”. He was jailed for eight years.
• Steven Jeremy Bache, 52 and from Stourbridge was jailed for three years and six months. He is an accountant who used his expertise to in a bid to evade HMRC controls.
• Kelly Nicholls, 36 and from Brierley Hill, was jailed for five years. She produced invoices and helped with administration tasks connected to the fraud.
• Susan Coussens, 55 and from Stourbridge, had denied money laundering and fraud charges but was jailed for four years. Like Kelly Nicholls, Coussens produced invoices and helped with administration tasks in the fraud.
• Helga Lowndes, aged 48 and from Stafford, was jailed for two years.
• Simon Clifford Davies, 46 and from Redditch, was jailed for four years.
• Anthony Smith, 36 and from Brierley Hill, West Midlands, admitted cheating the revenue and was jailed for five years and one month. A former bank manager, Smith is also the partner of Kelly Nicholls and was described by the judge at sentencing as Harper’s “lieutenant and the office manager” when he was not present.
• Stuart Henderson Barrett, aged 57 and from Tividale, admitted conspiracy to cheat the revenue and money laundering and was jailed for four years and three months. Stuart Barrett ran a security company alongside his son Steven Barrett, and collected some of the fraud’s proceeds from various banks. 
• Steven Lee Barrett, 34 and from Walsall, admitted conspiracy to cheat HMRC and money laundering, and was also imprisoned for four years and three months. The judge said that both Barretts were “heavily involved” in the fraud. 
• Richard Ruddick, 45 and of no fixed abode, had admitted VAT fraud and was jailed for one year and eight months. Ruddick acted as an intermediary between the off-record workforce and the company that contracted them. He was described by the judge at sentencing as “at the coal face” during the fraud.
• Craig Ross Hill, 50 and from Tividale, admitted conspiring to cheat the revenue and was jailed for four years and three months. Hill was a director for two of the sham companies created as part of the scam.
• John Caulfield, 42 and from Hall Green, Birmingham, had admitted cheating the revenue and was jailed for four years and three months.
• Ian Siviter, 38 and from Tividale, admitted cheating the revenue and was jailed for four years and three months. He was a director for two of the sham companies created as part of the scam.
• Timothy O’Loughlin, 55 and from Bristol, admitted conspiracy to launder money and was jailed for three years and nine months.
• Neil Hughes, 50 and from Bromsgrove, admitted cheating the revenue and was jailed for four years and three months.

Less than a week after revealing that it had welcomed Carillion’s approach for a merger, Balfour Beatty has walked away from the table and called it all off.

The dispute is over Parsons Brinckerhoff, which Balfour Beatty wants to sell and, it now transpires, Carillion would really rather like to keep.

Balfour Beatty said that it had been surprised by Carillion’s “wholly unexpected decision” to only proceed with a merger if it included Parsons Brinckerhoff. However, Balfour Beatty has already put its US engineering arm up for sale and regards this as a deal breaker.

Balfour Beatty said it was now returning to Plan A: sell Parsons Brinckerhoff and find a new CEO to replace Andrew McNaughton who was pushed out a few months ago.

Having entertained Carillion’s overtures, however, the company now appears in play and future takeover or merger approaches seem likely. The whole episode does little to reinforce Balfour Beatty's shaky reputation as a well-led company and it is not entirely clear what calibre of person would be interested in taking the top job there under the current uncertain circumstances.

The statement put out by Balfour Beatty this morning said:

“Balfour Beatty announces that it is terminating discussions with Carillion regarding a possible merger with immediate effect. The termination of discussions follows Carillion’s wholly unexpected decision to only progress the possible merger in the event that Parsons Brinckerhoff remained part of the potential combined entity.

"This change is contrary to the basis upon which the Balfour Beatty Board agreed to engage in preliminary discussions. It is also contrary to the joint announcement released on 24 July 2014 which confirmed that the sale of Parsons Brinckerhoff would be unaffected by the merger discussions and also a presentation to Balfour Beatty’s Board by Carillion on 28 July 2014.

"This change in the proposed terms is not acceptable to the Board of Balfour Beatty.

"Balfour Beatty will proceed in accordance with its own business plan, including the competitive sale process of Parsons Brinckerhoff currently well underway. It will also continue to actively progress its search for a group CEO.”

Spending on London’s infrastructure needs to double to £38bn every single year for the next 35 years.

That’s according to a consultation document published yesterday by the mayor, Boris Johnson.

The London Infrastructure Plan 2050 provides a £1.3 trillion vision for the long-term infrastructure needs of London. It sets out how the capital will need 50,000 new homes, 600 new schools and colleges, a 20% increase in energy capacity, improved water supply and public transport, and a new four runway hub airport in the Thames estuary.

The document signals the start of a consultation programme of how the city can address the challenges presented by population growth. Over the next half century population of London is forecast to increase by 37% to more than 11 million people.

Most pressing demand is in the water sector, as demand for water is predicted to exceed supply from as early as 2016.

Mr Johnson said: “This plan is a real wake up call to the stark needs that face London over the next half century. Infrastructure underpins everything we do and we all use it every day. Without a long term plan for investment and the political will to implement it this city will falter. Londoners need to know they will get the homes, water, energy, schools, transport, digital connectivity and better quality of life that they expect.”

The mayor plans to set up a London Infrastructure Delivery Board composed of senior representatives from all of the main infrastructure providers in London.

The draft plan not only sets out London’s needs but also proposes action, including:

• Construction of Crossrail 2 and perhaps further Crossrail projects
• Construction of a series of new river crossings and an inner orbital road tunnel
• Construction of a new four runway hub airport in the Thames estuary to the east of the capital
• An extra 9000ha of accessible green space needs to be provided to deliver more space for walking and cycling, flood mitigation, improved air quality, enhanced biodiversity and a cooler urban environment
• Improved broadband connectivity
• A short-term investment of £210m on electricity substations and longer-term exploitation of waste-to-energy technology
• A new approach to water management, with new tariffs and better leakage detection
• Waste reduction strategy based on circular economy principals, where goods are designed to be reused and recycled

The Mayor estimates the spending on London’s infrastructure needs to more than double, from an annual average of £16 billion in 2011-15 to £38 billion from 2016 to tackle an historic backlog of under-investment.

Estimates by consultant Arup suggest that the total investment in London’s infrastructure between 2016 and 2050 could amount to £1.3 trillion, although the purpose of consulting on this plan is to help agree priorities and determine how to reduce costs.

Boris Johnson is keen for all UK cities to have greater power over their own finances – so-called fiscal devolution. It is a campaign he is engaged in that may put him at odds with the Treasury and chancellor George Osborne. The two men are among those cited as potential future leaders of the Conservative party, so any conflict between them will doubtless be observed with interest by political commentators.

 Mr Johnson argues that fiscal devolution is vital and would give the city greater financial control over its transport, housing and other investments, and provide a base against which to borrow prudently. Public sector land and other assets could also be used more effectively, he argues. Combined with better integration and procurement, costs could be reduced by up to £150 billion, he suggests.

Arup director Alexander Jan said: “Infrastructure investment activity will be required on an industrial scale not seen since Victorian times. Only a concerted, properly resourced plan combined with proper devolution of tax raising powers to London government can secure the commercial success of London.”

A consultation on the London Infrastructure Plan 2050 will run for three months and the Mayor is expected to publish a final report in early 2015.

{{image2}}

The construction industry was swift to welcome the mayor’s vision, and all the lucrative building work that it implies.

BAM Nuttall CEO Steve Fox said: "We are encouraged by the visible commitment made by the Mayor and the GLA [Greater London Authority] to improving London’s infrastructure. It’s a strong signal to the industry and it gives confidence to major infrastructure contractors such as BAM who are heavily invested in London projects in setting our future business strategy. It means we can invest in people, training and our local supply chains across the capital to support the Mayor’s London vision in the longer term.

“We fully support the introduction of a London Infrastructure Delivery Board that will be able to influence and assist industry and the GLA by providing expert knowledge and advice. Having been involved significantly with HS1, Crossrail and the Olympic Park Development, which are huge success stories for our industry, we know that by working together we can all deliver a more successful outcome.

“The Mayor and his office have demonstrated leadership in developing procurement models that improve collaboration across our industry leading to added value and we welcome this approach. It is only by customer, contractor, designer and supply chain working together at a sufficiently early stage to develop the business case that we will see gains in overall delivery.”

David Tonkin, Atkins’ chief executive officer for UK & Europe, said: “People from all over the world want to visit, live and work in London and it plays a key role in the economic prosperity of the UK. World-class transport, utilities, energy and digital infrastructure are vital to maintaining this position and this long term, cross-sector investment plan is the vehicle that will help deliver these.

“As a company which helps cities all around the world to create a better future for its people, we applaud the GLA and the Mayor of London for taking this step to develop innovative and integrated proposals to repurpose and reuse existing infrastructure, while adopting and applying new technologies and techniques.”

Civil Engineering Contractors Association chief executive Alasdair Reisner said: “Our industry has long argued that long-term visibility of workload is essential if we are to play our part in delivering world-class infrastructure in an efficient and timely manner. An infrastructure plan for London which has cross-party support will encourage innovation, better resource allocation, an improved skills base and a more stable workforce throughout the construction sector.”

Tony Travers, director of the London School of Economics, said: “The London Infrastructure Plan is a necessary step towards understanding the needs of the ‘10 million city’ which London will soon become.  The capital’s railways, housing and schools will all require substantial investment just to accommodate the additional one and a half million Londoners who government statisticians forecast will live in the capital within 15 years.  In reality, with higher densities will come a disproportionately greater need for investment. The plan makes it possible to draw up proposals for developing schemes and raising resources.”

Cllr Claire Kober, London Councils lead member for infrastructure and regeneration, said: "London Councils welcomes the start of a debate about London’s long term infrastructure needs. With the challenge of continued population growth, infrastructure investment needs to ensure that London remains both a competitive world city and a liveable one for all its different communities. To meet this challenge, Whitehall must devolve power to London government and allow greater financial independence.”

For the first time ever there is to be a close to real time property index in France which will give buyers and sellers a better idea what is happening in the residential real estate market.

The Prix de l’Immobilier index will be launched in September and published weekly taking into account new transactions from a variety of different sources including banks and real estate syndicates.

It has been designed by Michel Mouillart, professor of economics at the University Paris-Ouest and director of the Housing Credit Observatory (CSA) with the aim of using figures from banks, financial institutions such as Crédit Foncier, Gecina, Sogeprom and the SNPI, the national syndicate for real estate prices that covers around 35% of sales in France.

It will be more up to date than the index published by Notaires which is notoriously months out of date. The index will be show data for the whole of France and also by region, city and town and it will give information on different property types such as houses, apartments and ‘special’ property.

French real estate professionals have been calling for an up to date and accurate residential property index for years and it will also benefit overseas buyers.

‘French Notaires have had a monopoly on house price data for a long time and when reports are published they are always six months behind,’ said Nicholas Leach at Athena Advisors which has over 120 partnerships with estate agents and developers in France.

‘Historical data is always useful but the lack of real time market information has always been a frustration for non-resident buyers, especially when this type of information is so readily available in countries like the UK. This new index will be extremely helpful when dealing with foreign investors, especially if it’s their first purchase in the country,’ he explained.

One of the biggest factors for overseas buyers is that they’ll now be able to see data for new build property as well as resale. ‘The Notaires data is largely based on resale property so for areas like central Paris where newly built property is extremely rare this new information will be very useful,’ added Leach.

In the future, we’ll all live in leafy, sustainable garden cities… or so some Edwardians believed. Today, that idea is being dusted off and taken out for another airing, to the delight of those in the construction industry. Will it take off this time? Mark Smulian reports

When George Osborne announces that 15,000 homes will be built, complete with supporting infrastructure, at Ebbsfleet in Kent – the nation’s first new ‘garden city’ for a century – it must have gladdened the hearts of everyone in the construction industry.

And when deputy prime minister Nick Clegg followed the chancellor’s comments with his own announcement that there would be three new garden cities in all, it must have been welcome news indeed.

Except of course that the Ebbsfleet site to which Osborne referred, sounded just as appealing in 2002 when it got outline planning consent. And it doubtless sounded just as good as recently as 2012, when the Department for Communities & Local Government said 22,600 homes would be built there, alongside the High Speed 1 railway station.

Cynics would therefore say it’s all talk. With work started on barely a few hundred homes, why should anyone in the industry take Osborne’s statement seriously? Talk about Ebbsfleet’s development is as speculative as talk about Prince Harry’s marriage plans, and about as reliable.

And since no garden city has been built since the 1920s, some may conclude that there are good reasons why the concept has fallen into disuse.

The phrase ‘garden city’ might, to builders with moderately long memories, reawaken memories of former prime minister Gordon Brown’s attempt to get a series of ‘eco towns’ started six years ago. Most of these were rapidly abandoned in the face of public hostility and municipal indifference.

The new garden cities, we are told, would be stand-alone settlements with their own infrastructure, schools, hospitals and, as far as possible, local sources of employment, all of which would make them quite different from conventional urban extensions.

But where, other than Ebbsfleet, can anyone find sites of sufficient size: empty yet well-connected by road and rail; where existing residents will not object loudly?

Letchworth and Welwyn – the only two garden cities ever built – are low-density places of attractive homes set amid extensive greenery and generally considered rather pleasant places to live.

New garden cities would thus face the immediate problem of needing enormous amounts of empty land to achieve anything like these low densities.

The government’s sudden enthusiasm for garden cities can be seen as a way to win public support for house building in areas of housing pressure.

Could modern versions win public acceptance (and so avoid the aggravation of contested planning applications) where developers’ attempts to extend existing towns fall foul of local opposition?

The government’s prospectus nails its colours to the mast by calling for ‘locally-led garden cities’. In other words, it’s up to each locality to suggest garden city sites rather than have the government impose them.

The prospectus states: “Unlocking large scale housing developments is critical to driving the supply of new homes in the medium to long term. They can offer a more strategic and thoughtful alternative to sequential development (or ‘sprawl’) around existing communities.”

It continues: “Development at a large scale creates the opportunity to secure real and important benefits: attributes that people most value – such as quality design, gardens, accessible green space near homes, access to employment, and local amenities – can be designed in from the outset.

“In short, garden cities are about far more than houses alone: they are about creating sustainable, economically viable places where people choose to live.”

Ministers set out a series of principles for their development (see box p35) drawn up by the Town & Country Planning Association (TCPA) – an organisation with its origins in the Victorian garden cities movement.

But there would have to be a body that could deliver such a large project over a long period, though the government has left open whether this would be a development corporation, as proposed for Ebbsfleet, or various public/private joint ventures and partnerships.

In return, any site chosen can expect government help with money and some rather unspecific things like ‘brokerage’ and ‘capacity support’.

What is missing is any new legal framework for garden cities. As it stands, it appears they would all have to go through the existing planning system, and as anyone who has grappled with that will realise all too well, an application for something as vast as 15,000 homes will be strewn with pitfalls. So, despite the Government’s enthusiasm, can anyone expect to see a garden city built other than at Ebbsfleet?

There would certainly be plenty of work were they to go ahead. Miles Gibson, director of the 2014 Wolfson Economics Prize – which offers £250,000 for the best paper explaining how garden cities could be developed – says: “At the proposed Ebbsfleet Garden City you could expect 30,000 construction jobs if the 15,000 homes ambition there is met.

“This is worked out using the government’s standard rule of thumb for calculating the number of construction jobs arising from new homes. You just double the number of homes to get the number of jobs. “Also of course there are construction jobs associated with the infrastructure and the shops, offices, etc, but it is more difficult to be certain about precise numbers.” Hugh Ellis, the TCPA’s policy director, thinks development corporations will be needed to deliver any garden cities. These would come armed with powers of land assembly, planning and compulsory purchase if necessary.

The original garden cities were all built to provide affordable housing but Ellis thinks a 60-70% proportion would now be more realistic, as would an expectation that most, though not all, residents would work in the immediate locality.

One point of controversy in the prospectus was that it said promoters of garden cities merely “may wish” to consider providing affordable homes.

Ellis says: “Creating mixed tenure homes, genuinely affordable housing for all budgets and a considerable level of homes for social rent constitute essential elements of the garden city principles.”

Garden cities would be paid for by development corporations owning the land and using the increase in its value to finance work.

Ellis explains: “The issue is the betterment in value between something that is agricultural land and something that gets planning permission for homes and is then worth millions.

“You can use that to repay debt for the development, which is how the new towns were built.

“Housebuilders normally use a very different model for speculative building but you would not have this here. They would simply be building houses as contractors for the corporations, as they do for social landlords. That means they would not have the profit from speculation but they would have certainty.”

Cathal Rock, who heads work on garden cities at the Department for Communities & Local Government, told a TCPA conference in May that the idea had evolved because “we face huge pressure with 221,000 new households every year to 2021 and we’re building 107,000 homes a year though starts are now 123,000 but that is an increase from a very low base.”

But he admitted the government knew of no similar project of such a scale in the UK and that the 30-40 year delivery period needs “very patient capital investors and will be a challenge for local authorities and housebuilders.”

A spokesman for the Home Builders Federation said: “We are in favour of garden cities so long as they mean an absolute increase in the number of new homes built and not just a different way of building the same number.

“We want to see what models are developed and one may be that house builders work as contractors where a development corporation owns and has assembled the land,  since that is different from a house builder buying land and seeking planning permission.

“That would make perfect sense, but this is going to be long term and will need support.” The same TCPA conference though saw the veteran architect and planner David Rock suggest that a garden city’s prospects would be poor indeed if it had to go through the existing planning system without any new streamlined method being provided for it.

Christine de Ferrars Green, a lawyer with legal firm Mills & Reeve specialising in residential development, agrees: “I certainly think they will need a legislative framework to deliver something on the scale required and neither the government nor Labour seems to be thinking about a national strategy for garden cities or new legislation. “That means they would have to go through the normal planning system. The eco towns, with which I was involved, foundered on political unpopularity but also on the slowness of the planning process.”

She says one key problem would be finding a suitable site within the area of one local authority.

If it crossed boundaries, “you are into the duty to cooperate, which really doesn’t mean much except showing that councils talk to each other and there might be a lack of local political support.

“The planning system works well normally, but I wonder if garden cities may need their own system.”

England is littered with the corpses of eco towns and with an earlier generation of new towns, many of which are now widely considered object lessons in how not to design a new settlement.

Will this new round of garden cities fare better? It all depends on suitable sites existing and then attracting local support. So, while 30,000 construction jobs per project would be great for industry, perhaps it’s best not to bank on it.

[This article first appeared in the June 2014 issue of The Construction Index magazine, which can be viewed in full at: http://epublishing.theconstructionindex.co.uk/magazine/june2014/]

The road repairs backlog is growing, despite the industries efforts to ‘do more for less’. Will Mann asks the road maintenance sector what needs to change

The aptly-titled ALARM survey, published every April, rarely makes for happy reading. Commissioned by the Asphalt Industry Alliance (AIA), the survey (the acronym stands for Annual Local Authority Road Maintenance) invariably reveals a backlog of repair work. But what stands out most from this year’s is that instead of gradually working through this backlog, local authorities are falling further behind.

The total cost of bringing the country’s roads back into a reasonable state is estimated at £12bn – up £1.5bn on 2013. Little wonder the UK’s roads network is described as “not fit for a modern economy” by Civil Engineering Contractors Association chief executive Alasdair Reisner. But what, realistically, is likely to change at a policy level to address this?

“There has been massive underinvestment at local government level, and big pressure for five years for contractors to do more for less,” says Reisner.

“A big problem is that the funding is not ring-fenced. We find that roads funding too often gets diverted to social issues. So we end up with a ‘make do and mend’ approach.”

This was also identified by a National Audit Office report on maintaining roads, published on June 6th. “Stop/start funding makes long-term planning more difficult for highways authorities,” said Amyas Morse, head of the NAO. It also noted that ring-fencing of funding for the Highways Agency’s replacement (a new Government- Owned Company, or 'GoCo') would not address the problems faced on local roads, which make up 98% of the network. CECA and other industry trade bodies are pushing for longer-term settlements for highways maintenance funding.

“We need consistency of funding,” says Geoff Allister, executive director of the Highways Term Maintenance Association. “Businesses need to plan for a 10-year period going forward; big investment decisions – plant, materials – require a degree of certainty.”

Some forward-thinking councils have tackled the issue by financing a one-off hit to clear their backlog completely – which apart from better roads, also saves on the absurdity of insurance claims from injured motorists and pedestrians (a £30m annual cost). The maintenance industry would like to see others follow suit.

“A one-off up-front investment would take billions out of day-to-day maintenance – so you ‘invest to save’,” says Reisner. “Blackpool has used prudential borrowing to fund this, and other councils have used PFI. The quality of carriageway in these areas is very good, and they are very popular locally.”

Blackpool Council is in the final year of a four-year programme to replace 40 miles of its busiest roads, and a spokesman says the “vast majority of locals” are happy with what’s being delivered.

AIA chairman Alan Mackenzie also believes the Blackpool approach works “extremely well”.

PFI is less in favour these days, partly due to the cost, though Mackenzie observes that “as a longer term model, it offers the opportunity to exercise best practice”.

He adds: “Local authorities need support to allow them to borrow more in order to put longer term plans into place.”

But a concern at local government level is the lack of expertise in the sector – a consequence of the swingeing cuts post-2010.

“There are undoubtedly some skills gaps,” says Mackenzie. “Some skills and experience have been lost as a result of cuts made to personnel, recruitment, training and apprentice schemes during the recession.”

One highways maintenance business says “a tremendous problem for us is the lack of informed clients. The major groups like the West Midlands Alliance know what they’re doing – but others haven’t got a clue.”

The industry has tried to work with councils to develop their highways strategies.

“Collaborative working is very important,” says Allister. “Contractors work with local authorities to look at what’s feasible when they have downward pressure on their budgets, to ensure they use the money they’ve got well.”

Mackenzie stresses the need for longer-term planning. “Planned preventative maintenance, for instance, is at least 20 times more cost effective than filling potholes,” he says.

“Also, having an effective asset management plan allows councils to demonstrate the need, to councillors and the Department for Transport, and create a plan to effectively deal with the backlog.” The DFT, to be fair, appreciates the lack of long-term planning in highways maintenance. It is currently consulting on suggested mechanisms for distribution of funding for local highways maintenance for the period 2015/16 to 2020/21. It reports back in the autumn.

The department has also sponsored – to the tune of £6m – the Highways Maintenance Efficiency Programme to drive and share innovation and efficiency improvements across the sector. One of these innovations may be the increased use of BIM for asset management of highways which Skanska, among other contractors, is already using. “We held a highways maintenance forum for clients earlier this year and showed how BIM is used in building projects – and can also be used in other asset/life cycle management,” explains infrastructure services managing director Gregor Craig.

However, a barrier to the adoption of innovative thinking may be the reluctance of local authorities to take risks. And this is likely to be exacerbated by the hollowing-out of skills in council road maintenance departments during the past four years.

“Innovation carries a risk,” says Allister, “so councils can be reluctant, which is very sensible. But trials of new products and methods do happen, and there are controlled procedures to allow these trials to take place in the proper environment.” But there is only so much innovation the industry can introduce to stop the backlog getting longer. Ultimately, there is a need for a short-term funding solution – which inevitably means a political solution.

“Roads maintenance is a very big issue at a local level, but is less so at national level,” observes Reisner.

Blackpool has been championed by many in the industry as the model for other councils to follow. According to a council spokesman, the main tipping points for their new approach were “bad winters, insurance claims, and the general poor state of the roads”. But another source says that it was political pressure that heralded the changes, and more specifically, the council election of 2011, which brought in a Labour majority.

If the UK is to get “a road network fit for a modern economy”, it may be that a political solution will be required.

This article first appeared in the July 2014 issue of The Construction Index magazine, which can be viewed in full at: http://epublishing.theconstructionindex.co.uk/magazine/july2014/

While the magazine is free to view online, a subscription is required to receive you own hard copy every month. This can be purchased for just £35 a year at http://www.theconstructionindex.co.uk/magazine

One of London’s most iconic buildings, The Gherkin, in the heart of the city’s financial district has been put up for sale.

Savills and Deloitte Real Estate have been jointly instructed to sell the building at 30 St Mary Axe in the City of London following the appointment of Phil Bowers, Neville Kahn and Alex Adam of Deloitte LLP as the Joint Fixed Charge Receivers.

Interest is expected from around the globe for the 505,000 square foot, 40 storey landmark office building which opened in 2004 and was designed by Lord Foster.

It is currently multi-let to approximately 20 tenants including Swiss Re, Kirkland & Ellis International LLP and ION Trading and offers in excess of £650 million are being sought.

The tower was placed in receivership in April by its creditors after one of its owners was placed in insolvency. Germany's IVG Immobilien, which co-owned the building with private equity firm Evans Randall, filed for insolvency last year. Although Evans Randall said it was willing to buy a bigger stake in the tower, it was unable to agree a new ownership plan with IVG.

‘This is a globally recognised landmark building, which sits in the heart of London’s business core. The central London commercial property market has benefitted from improving market conditions over the course of the last few years,’ said Stephen Down, head of central London investment at Savills.

‘Not only have we witnessed a sustained appetite from international investors for assets in London but we have seen a substantial improvement in business growth and take up of office supply as the capital’s economy continues to improve,’ he added.

According to Jamie Olley, head of city investment at Deloitte Real Estate, The Gherkin is one of London’s famous landmark buildings and the most iconic office tower in the City’s skyline.

‘For investors, this prime office property provides an attractive combination of stable and reversionary income with opportunities to add value via asset management. The property will appeal to a wide range of domestic and international investors and we are confident of maximising returns to the receivers and creditors,’ he said.

The latest London Office Crane Survey by Deloitte Real Estate shows office development has now been running at below average levels for five years, with 9.2 million square feet under construction across central London. This, combined with a clear rise in office take up over the last 12 months, has resulted in availability falling to its lowest point since 2007, with 45% of space under construction already let.

According to Savills research, over the last five and a half years, central London has seen £71.1 billion invested into the office and retail markets, with overseas investors accounting for £47.7 billion, equating to 67% of the overall volumes.

The research notes that during this time period, investors from Asia Pacific represented 19% of total office and retail transactions, with European buyers accounting for 18%. US and Middle Eastern investors represented 13% and 10% respectively.

The firm also…

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.

UK home owners remain very confident that property values will continue to rise over the second half of this year, but are concerned about mortgage availability, according to the latest sentiment survey.

New lending criteria following the introduction of the Mortgage Market Review in April means that 40% of home owner believe that getting a mortgage is now harder than it was three months ago, the latest Zoopla Housing Market Sentiment Survey has found.

Londoners are no longer the most confident about further house price growth but overall some 92% of home owners surveyed expect UK property prices to increase over the next six months, slightly down from a four year high of 95% earlier this year.

It is the first time in a long time that London home owners are not the most confident across the country about house price rises in their area. The South East, the South West, the East of England and the West Midlands have all overtaken the capital in terms of home owner confidence.

With London prices having moved up so far and fast, the proportion of homeowners in the capital who expect prices to rise over the next six months has fallen from 98% to 92% over the last three months.

And amongst the 7,810 homeowners surveyed by Zoopla, the average prediction for house price growth over the remainder of the year currently stands at 7.6%.

The Mortgage Market Review (MMR) and associated new lending rules have both slowed down the mortgage application process and made securing finance more difficult. Despite that, 79% of UK home owners plan to spend at least the same or more on home improvements over the next year compared to last year.

‘After months of consistent growth in the capital’s property market we are now seeing a slight increase in caution among London’s home owners. More broadly, securing a mortgage appears to be getting harder now that MMR has caused lenders to be more rigorous with their lending criteria and approval process,’ said Lawrence Hall of Zoopla.

A breakdown of the figures show that the most confident about property price rises are home owners in the South West and South East of England with 95% in both regions expecting them to rise. In the East of England and the West Midlands it is 93% and in Wales and London 92%.

In Yorkshire and the Humber some 91% think prices will keep rising by December and in the North West, the East Midlands and Scotland it is 90%. In Northern Ireland it is 87%.

The improving housing market continues to lift building companies, with Taylor Wimpey today reporting 18% first-half revenue growth and profits up by more than 60%.

Revenue for the six months to 30 June 2014 reached £1,190.1m (2013 H1: £1,007.1m).

Profit before tax and exceptional items was up 64% to £178.4m (2013 H1: £109.0m). Operating profit was up 45% to £192.1m.

Taylor Wimpey completed 5,766 homes during the period (up 11%), of which 4,755 were for private sale. Of these, 42%, or nearly 2,000 homes, were sold with support from the government’s Help to Buy programme.  Its average selling price was up 10% to £206,000.

On the flip said, the company has had to pay out £116m to local community groups around the country to secure planning permission. Taylor Wimpey converted a record 7,195 plots from its strategic pipeline in the first half of the year.

Chief executive Pete Redfern said that the company was starting to see a narrowing of the north-south divide. “Particularly in the second quarter, we have seen greater balance between the regions, with increases in sales prices and sales rates outside of the strong London and the southeast markets,” he said.

Builders’ merchant group Travis Perkins saw an 11.5% growth in group revenues in the first six months of the year and nearly 20% rise in adjusted pre-tax profit.

In the six months to 30 June 2014 Travis Perkins made £2,730.5m in revenues (2013 H1: £2449.5m).

Profit before tax, exceptional items and amortisation of intangible assets was £162.5m (2013 H1: £136.1m).

Reported pre-tax profit was £153.7m, up 14% from £134.7m for the same period last year.

All divisions saw growth in both sales and profits and are all outperforming their respective markets, the company said.

Chief executive John Carter said: "A combination of improving market conditions, increasing customer confidence and the successful introduction of a number of self-help initiatives has driven a strong first half performance.”

Plans to build Britain's first floating village at London's Royal Docks has moved a step closer after the Mayor of London Johnson, revealed that Carillion Igloo Genesis had won the competition to design and build it.

The Mayor unveiled ambitious plans in February 2013 to create a floating village as part of his ongoing drive to transform London's Royal Docks bringing jobs, commercial space and homes back to the capital's waterways.

Following a competition, Carillion Igloo Genesis has been selected to transform the 15 acres of water at the Royal Victoria Dock site, sitting directly to the east of the Emirates Airline, transforming it into a thriving community with floating homes, restaurants, cafes and bars.

Although a first for the UK, floating developments are already a popular idea on the continent with successful schemes at Ijburg near Amsterdam and Hafen City in Hamburg as well as many others examples of floating homes throughout Scandinavia.

The winning consortium's scheme includes a custom build approach for each of the 50 residential homes, enabling prospective occupiers to be part of the design process of their homes, and a blue water square, framed by a market square and a floating corniche.

There will also be a large multi-purpose events space and a mix of non-residential uses including restaurants, cafes, shops and leisure and office space. Plans for additional facilities, such as a floating Lido and an ice rink, were also proposed as part of the bid.

The scheme takes inspiration from the tried and tested floating homes at Ijberg and have been assisted by Dutch floating structures experts Mark van Ommen of Floatbase and Ton van Namen of Monteflore who have already delivered exemplar schemes of over 300 floating structures.

The Mayor, Boris Johnson, inherited almost 700 hectares of land as a result of the Localism Act and is currently one of the largest owners of public land in London. He is determined to bring more public land forward for development and accelerate the number of homes being built for Londoners.

Working with the London Borough of Newham, this includes the regeneration of the former Royal Docks area, with recent investments in this area including the opening of the Emirates cable car and the Siemens Crystal Centre, as well as forthcoming developments on GLA owned land at Silvertown Quays and Royal Albert Docks which combined would result in over eight million square feet Gross External Area of new commercial space.

‘This site has the potential to become one of the most sought after addresses in the capital while breathing new life back into London's waterways. Carillion Igloo Genesis' scheme will create a unique mixed use development providing a range of commercial activities within a high quality water environment for Londoners and visitors, creating jobs and raising the profile of London's Royal Docks,’ said Johnson.

Chris Brown, director of Carillion Igloo Genesis said that living in a floating home you've helped to design is a dream for many. ‘By…

Construction consultant Turner & Townsend saw its UK revenue grow by 11% to £148m for the year ended 30 April 2014.

Globally, gross revenue increased 12% to £357.4m, making it Turner & Townsend’s fourth successive year of growth. Group turnover has grown by 51% since 2011.

Pre-tax profit was up 12% to £33.3m.

Revenue net of subcontract costs was £322.2m, a 12% rise from the previous year's £286.3m.

The UK remains the company’s largest market, but there was 46% growth in the Middle East last year and 33% growth in Asia.

In the UK, an operating profit of £16.5m was made, thanks to projects including Crossrail and the Battersea Power Station redevelopment.

CEO Vincent Clancy said: “After four years of uninterrupted growth, Turner & Townsend continues to deliver record turnover while building further momentum towards our long-term objectives.”

Staff numbers at the year end were 3,660 (2013: 3,239) across 87 offices worldwide, with more than 55% of employees based outside the UK. New offices were established in Seattle, Phoenix, Chicago, Bogota, Rio de Janeiro, Hamburg, Maputo and Jakarta.

McCarthy & Stone, Britain’s biggest builder of retirement housing, is opening a new office for north London and northern Home Counties in September.

It will be its first new regional office in 14 years.

The move is part of a planned investment of £300m in retirement housing in the region over next four years. It plans to build 1,800 new homes across approximately 70 new sites in north London, Buckinghamshire, Bedfordshire, Hertfordshire and Essex.

Nationwide, McCarthy & Stone plans to spend £1.5bn in new housing for older people by 2018 across 250 sites in the UK to deliver a total of 10,000 new homes.

The new regional office will be based in Colney Heath and headed by newly-promoted regional managing director Ali Maruf. He has been with McCarthy & Stone since 1997 and was previously land director for the area.

McCarthy & Stone is also widely reported to be in talks with City advisers about either a return to the stock market or a debt refinancing. The company used to be stock exchange listed until being taken private in 2006. McCarthy & Stone cut its net debt to £93m after a £527m refinancing last year.  At that time, new leadership was installed, with former Persimmon CEO John White as chairman and former Mount Anvil boss Clive Fenton as chief executive.

On the new expansion drive, Mr Fenton said: “The demand for high-quality retirement housing in North London and the northern Home Counties is growing substantially and we want to respond better to the needs of the local market.  Opening our first regional office in 14 years in North London is vitally important to us as we look to meet our growth plans and double the size of the business."

McCarthy & Stone sold 1,527 units across the UK in 2013 and is looking to sell more than 3,000 units a year by 2018.  In addition to the new North London region, the company expects to open further regional offices in 2015 and 2016, complementing its existing five regions in the southeast, southwest, the midlands, the north and Scotland.

A bodging builder who broke his back on a demolition job has now been fined for his safety failings that could have also put others in danger.

The message from the court could not be clearer: it was your own stupid fault.

William Batten, aged 66 and trading as Bill Batten Concrete Cutting & Demolition Service, was injured when he removed key timber supports at the corners of the roof of a temporary classroom, destabilising it and causing it to collapse on top of him. The collapse, in June 2013, was witnessed by schoolchildren in a nearby playground on their lunch break.

Mr Batten suffered a fractured vertebrae and neck injury. He was in hospital for a week but has since returned to work, albeit only on light duties.

An investigation by the Health & Safety Executive (HSE) found that Mr Batten had started work he was not supposed to. It identified that the roof of the temporary classroom had been supported by timber in each corner. Steel fixtures had been inserted to add additional structural support for the windows, but not the roof.

North and East Devon magistrates heard yesterday that Mr Batten’s firm had been contracted to demolish two buildings at Lympstone Church of England Primary School.

A soft strip of the temporary classroom took place on 11 June 2013 and demolition of the main structure by mechanical means was to be carried out on the following days when Mr Batten’s son, business partner and planner of the work, returned from leave. A further risk assessment and method statement was to also be submitted prior to the structural demolition going ahead.

However, after Mr Batten had finished the soft strip with two labourers, he decided to be extra-helpful and start further stripping work, including the removal of the timber supports to the corners and cladding.

He wrongly assumed that steel stanchions supporting the windows were holding up the roof.  When the wooden struts to the corners of the building were removed, the roof came down. The two employees narrowly escaped harm but Mr Batten, was trapped underneath the roof for several hours.

William Melvin Batten, trading as Bill Batten Concrete Cutting & Demolition Service, of Exeter Road, Kingsteignton, Devon, was fined £500 and ordered to pay costs of £868.90 after pleading guilty to breaching Regulation 29(1) of the Construction (Design and Management) Regulations 2007.

Contractors strengthening Edinburgh’s Haymarket railway tunnels in preparation for a major regeneration project above have released the first images of their underground works.

A team of up to 40 specialist contractors is working through the night over 14 months to carry out the job, avoiding disruption to rail services on one of Scotland’s busiest routes.

The site above the tunnels will be home to The Haymarket, a £200m development of shops, offices and hotels, with an underground car park. It is being developed by Edinburgh Haymarket Developments Ltd, a joint venture between Interserve and Tiger Developments.

Interserve development director David Westwater said: “This work is the main challenge before we can begin construction above ground. It will be early next year before we can do that, but then people will soon start to see the development taking shape. After such a long time as a gap site, we’re very excited about what The Haymarket has to offer and how it will help to create a real gateway at Edinburgh’s west end.”

{{image2}}

The strengthening works will allow contractors to begin building the foundations for the development. This includes grouting between the tunnel lining and the surrounding ground, and drilling and inserting metal bars within the brick lining.

Line possessions are only possible in the north tunnel between midnight and 5am, four nights per week, and in the south tunnel from 1am to 9.30am for one night a week.

{{image3}}

Groundworks specialist BAM Ritchies is carrying out the tunnel strengthening works. Project manager Angus MacGregor said: “We are very well experienced in complex rail projects but every situation is unique, so we’ve had to develop a very specific approach for this work based on the skills and knowledge of our team. There are many constraints to working on this site, but we have made good progress so far thanks to the working relationship we have with our client and Network Rail.”

Network Rail’s Gary Walker added: “Clearly our priority is to ensure that the works are carried out safely and with no disruption to rail passengers on this extremely busy section of the network. We have worked closely with Edinburgh Haymarket Developments and BAM throughout the design process over the last 12 months and it is pleasing to see work being carried out as planned.”

Property sales in Scotland increased by 22.4% in the second quarter of this year compared to the same quarter the previous year, according to the latest figures from the Register of Scotland.

It is the fourth consecutive quarter in which the sales volumes have increased in excess of 22%, demonstrating sustained growth over the past year when compared with the previous year. It is also the highest volume of sales for this quarter since the first quarter of 2008/2009.

West Lothian again showed the largest percentage rise in the number of sales with an increase of 39.1% compared to the same period in the previous year and the City of Edinburgh recorded the highest sales volume with 2,944 residential house sales, an increase of 30.6% on the previous year.

All Local Authorities showed an increase in the volume of sales, with the exception of Aberdeen City, which showed a decrease in volume of sales of 2.1%, and the Shetland Islands which is below the 1% threshold.

The average price of a residential property in Scotland increased by 5.9% during the first quarter of 2014/2015 compared with the same period the previous year.

The average price of a residential property for this quarter was £162,122. This increase represents the first time in almost four years that the average price has increased by in excess of 5%.

The highest percentage rise was recorded in Renfrewshire, with an average price of £128,138, a rise of 16.8% compared with the same quarter the previous year. East Renfrewshire recorded the highest average at £232,987, a rise of 10% compared with the same quarter the previous year.

The largest percentage fall in price was again in Midlothian which showed a drop of 6.3% with an average price of £169,014.

The total value of sales across Scotland registered in the quarter increased by 29.7% compared to the previous year to just under £3.95 billion. This again consolidates on the large increase in the value of sales reported last quarter.

The City of Edinburgh remains the largest market with sales of just under £670 million for the quarter, an increase of 39.4% compared with the same quarter last year. West Lothian showed the highest percentage rise with the value of sales increasing by 54.1% compared to the previous year.

All property types showed an increase in average house price in this quarter, the biggest increase being in flats at 5.3%. All property types showed an increase in sales volumes with detached properties showing the biggest increase in sales volumes of 23.3% and semi-detached and flats showing the next biggest increase at 22.2%.

Simon Brown, partner and head of residential sales at CKD Galbraith, said the figures fit in with the firm’s experience which has seen a steady increase in sales throughout 2014. The volume of sales agreed up by 32% compared to the first quarter of this year and a 31% increase compared to the second quarter of 2013.

‘Overall we have seen very…

London and the South of England are seeing more offices converted into residential properties, according to the latest commercial property market survey from the Royal Institution of Chartered Surveyors (RICS).

Nationwide the availability of commercial property has declined at its fastest rate since the index series began and a lack of stock is pushing investors away from prime locations and into B grade commercial investments, the report shows.

Overall during the second quarter of 2014 chartered surveyors saw a rise in the number of transactions of commercial properties being sold with Permitted Development Rights (PDR) to be converted into residential properties.

UK wide, a net balance of 49% of respondents said this activity was having a 'moderate' impact on commercial market activity, while almost one in five, net balance of 18%, said it was having a 'substantial' impact.

The picture across the country, however, was more polarised, with respondents in the north being less affected by PDR transactions, a net balance of 49% saying it was having 'no effect' on the market, compared with 32% of respondents in the south saying it was 'substantial'.

Further compounding shortage issues, overall availability of commercial property declined at its fastest rate since the commercial market series began in 1998, net balance of 33% more surveyors reporting shortages, with sharp declines in office and industrial space availability and the lack of supply to the commercial market is pushing investors away from prime location investments and towards B grade investments.

In London and the South particularly, respondents reported that growing demand and the resulting drop in yields is encouraging investors to look for opportunities beyond prime locations.

In London, a net balance of 50% of respondents indicated that investors were looking to add 'secondary or tertiary' assets in their portfolios, while in the South, 62% signalled a growing appetite secondary space.

Looking ahead, expectations for rent levels over the course of 2014 revealed a net balance of 33% more surveyors expecting rent levels to increase throughout the year. Respondents forecast rents will rise by 5.5% in the industrial sector, 4.3% in the offices sector and 2.8% across retail space.

‘The latest results provide clear evidence that the economic recovery is broadening out across the country with rising employment increasing the demand for space in all sectors of the market. As a result, the balance of power is now shifting back to landlords with rent expectations turning increasingly positive,’ said Simon Rubinsohn, RICS chief economist.

‘Meanwhile, the pressure in the office sector is being exacerbated particularly in popular locations by the gradual conversion of some secondary space into residential. While making a much needed contribution to the substantial shortfall of homes, there are understandable concerns that this could be creating a related problem for businesses looking expand their footprint as economic confidence grows,’ he added.

Property prices growth in the prime central London market slowed to just 2.5% in the first six months of this year and values now appear to have now plateaued having risen by just 0.4% in the second quarter of the year.

The most established core prime central locations such as Mayfair, Knightsbridge, Belgravia and Chelsea, where average values are in the £2,100 to £2,400 per square foot, have all recorded quarterly growth below 1%, while in lower priced Marylebone, where prices average £1,600 per square foot, values rose 3.5% in the quarter.

The data from real estate firm Savills also shows that at the very top end of the market, homes worth over £10 million fell by 1.5% in the second quarter of 2014, meaning that London’s highest value homes saw zero growth on an annual basis albeit values remain 48.0% above peak.

This division is also reflected in sales activity, with sales between £5 million and £10 million in the first six months of the year up by 7% on the same period in 2013 but sales over £10 million down by 10% over the same period.

The strongest growth is now being seen in the lower value core prime markets of Islington and Canary Wharf and Wapping, reflecting confidence amongst young financial sector employees and investor buyers targeting City based renters.

For example, average values in the prime East of City markets have risen 10.1% year to date, which follows 13.3% growth in 2013.

The domestic markets of prime south west London, which beat all other prime markets to rise 14% last year, have also slowed. The report says that in the face of buyer resistance to further price inflation and higher stock levels, year to date growth stands at 4.4%, having slowed to just 0.4% in the past three months.

Across the prime London index, approximately one in four properties recorded small price falls over the last three months.’ This suggests the spectre of interest rate rises, and in some parts of the market more constrained mortgage lending, is beginning to impact on buyer sentiment and constrain prices even in markets rich in equity,’ the report explains.

‘With an election approaching and the taxation of high value property still on the political agenda we expect values to plateau in locations that have seen the steepest price rises as buyers apply the brakes on further increases for a period. New sellers entering the market should price for these new market conditions and a more cautious group of buyers,’ it adds.

Leading house-building Persimmon Homes and one of its scaffolding contractors have been fined after two bricklayers were hurt falling from an unsafe scaffold.

Lincoln magistrates heard that the two men were working for Persimmon Homes Ltd on a development site in Ploughman’s Lane, Bunkers Hill, Lincoln, when the incident happened on 4th April 2012.

They were about to start work on a scaffold platform, 6m from the ground, which had been loaded with materials. Just as they started work, the scaffold collapsed and they fell approximately 2m onto a platform below.

A Health & Safety Executive (HSE) investigation found The Cathedral Scaffold Company Ltd had constructed the scaffold to bridge a narrow gap between the gable ends of two neighbouring properties. However, the company did not build it to a recognised design, which would have incorporated standards to transfer loads to the ground. They wrongly believed they could not fit them and a four board-wide working platform, as required by Persimmon, into the gap.

Instead they used a non-standard configuration of scaffolding but failed to carry out strength and stability calculations to ensure it was fit for purpose. The company issued a handing over certificate to Persimmon, setting out restrictions on the use of the scaffold. This identified it as a general purpose scaffold capable of supporting a specified distributed weight load, but because no strength or stability calculations were undertaken, this distributed load could not be guaranteed.

Persimmon subsequently overloaded the platform, causing it to collapse.

HSE found that the weight of just one pack of dry blocks distributed evenly over the platform would have taken it over the load limit – even without the men, tools or mortar on the platform. It was likely that the actual loading could have increased the danger as the blocks were all stacked towards one side of the platform.

{{image2}}

Persimmon Homes Ltd, of Fulford, York, pleaded guilty to breaching Regulation 8(b)(i) of the Work at Height Regulations 2005 and was yesterday (28th July) fined £8,000 and ordered to pay £10,426 costs.

The Cathedral Scaffold Company Ltd, of Dixon Way, Lincoln, pleaded guilty to breaching Regulation 8(b)(ii) of the same Regulations and was fined £4,000 with costs of £5,500.

HSE inspector Linda-Jane Rigby said after the hearing: “Unless a scaffold is a basic configuration described in recognised guidance it should be designed by calculation, by a competent person, to ensure it will have adequate strength and suitability. The design information should describe the sequence and methods to be adopted when erecting, dismantling and altering the scaffold. That did not happen in this case.”

One in 10 home buyers in the UK have bought a property to renovate with most intending to make a profit from their endeavours, new research shows.

However, half found the work was harder than they expected although two thirds said they would be prepared to do it again, according to the survey by loan provider Ocean Finance.

The research also shows that the average profit renovators have made or expect to make for their efforts is between £20,001 and £30,000. This was calculated by subtracting the purchase price of the property and the cost of the renovation work from the value of the house now.

While this much money is no small change, some home renovators are expecting to make much more. Some 7.8% of these respondents claimed they had either pocketed or hoped to make a profit of more than £100,000.

While the majority, 78%, of the people who have taken on a renovation project have completed it, some 22% admitted it was still underway.

Many respondents also revealed that the project had not been as easy to complete as they were expecting. In fact, nearly half, 46%, of home renovators admitted the work involved had been harder than they anticipated.

However, despite this the end result may have been worth it for most, as 63% of people who had taken on a property renovation scheme said they would do it all again.

People aged between 25 and 34 years old were found to be the most likely to have invested in a property in need of improvement, with 19% of this age group revealing they have done so. This might be because this is the age when people are thinking about taking their first steps on the property ladder, and buying somewhere that needs a facelift could save them some money.

Londoners were also the most likely to take on a renovation project at 20%. With house prices in the capital so much higher than the average across the rest of the UK, buying a house or flat that needs doing up might save residents money.

‘Taking on a renovation project can be a daunting prospect, but not only could it help you bag your dream home for a bargain price and you may end up making a profit too,’ said Ian Williams, Ocean Finance spokesman.

‘Of course, people should always make sure they carefully budget so that they don’t end up spending more than they can afford on doing up the property, and that they don’t take on a project they can’t manage,’ he pointed out.

‘House prices can go up and down, as can mortgage rates, and this may have an impact on the project’s budget but if all goes well, when the work is finished not only will they be left with a sense of achievement, but hopefully a healthy profit as well,’ he added.

Construction industry capacity shortages have prompted Mace to increase its forecast for tender cost inflation in London as contractors become increasingly picky about projects they take on.

Mace’s cost consultancy division reports that contractors are now turning down work in the capital as they are able to pick and choose their jobs. With competition falling, margins are rising, it says.

The surge in demand has led Mace to increase its forecast for London tender cost inflation from 3.5% to 4.5% for both 2014 and 2015.

Outside of London, there is still enough capacity across the UK to meet demand, as well as steady competition. This continues to subdue price increases. Mace’s forecast for average inflation in tender prices has therefore remained unchanged at 2% for 2014, rising to 2.5% in 2015 and 3% in 2016, by which time it is expected that the general economic recovery will have increased demand for construction across the regions.

The performance of private commercial work is also increasing, with the London office market proving to be increasingly active. However, across the rest of the country, Mace Cost Consultancy has found that the supply of private commercial space is still sufficient to meet general demand, confirming that this sector has not yet recovered across all UK regions.

In what Mace’s tender cost update calls the ‘next stage of the UK economic recovery’, capital investment has increased consistently over recent quarters. Business investment, one of the main components of fixed capital, grew by 5% to £33.4bn in the last quarter and is the highest since 2008 following five quarters of consecutive growth.

Mace Cost Consultancy managing director Chris Goldthorpe said: “While it is still possible to obtain competitive tender returns in the regions, the London market has seen contractors unable to meet the rising demand, resulting in a selective response to tender invitations and an unwillingness to take on risk.  It is now a regular occurrence for contractors to turn down tender opportunities, particularly if they involve single stage tendering, incomplete design information or significant construction risks.  We are also seeing overheads and profit allowances increasing to levels that have not been seen for the last five years as competition is reduced.”

Scientists have come up with a way of using noise cancelling technology for acoustic barriers alongside roads and railway lines.

Sonobex Limited, a newly formed spin-out from Loughborough University, has funding from the Technology Strategy Board, to bring its SonoBarrier acoustic fences to market.

The first CE mark prototypes are expected to be produced by February 2015, the company says.

Sonobex uses a patented acoustic meta-material technology called sonic crystals, which are fabricated materials designed to control, direct and manipulate sound. Sonobex sonic crystal based noise reduction technology is a passive method that superimposes disturbing noise with scattered anti-acoustic noise to cancel out the disturbance. Designs are tuned to particular dominant frequencies to achieve significant reduction levels.

Sonobex has a £358,000 budget for its project, with an anticipated £161,000 from the Technology Strategy Board.

Sonobex chief executive Paul Gooch said: “Sonobex is delighted to have secured this funding. These next generation acoustic barriers will revolutionise the market, true performance measured in-situ under the new CE will differentiate these products from current market solutions and provide the protection required and expected.”

The number of people who do not want new homes being built in their neighbourhood appears to be in decline.

The latest social attitudes survey conducted on behalf of the government found that opposition to new homes fell substantially between 2010 and 2013, with 46% saying they would oppose new homes being built in their local area in 2010, compared to 31% in 2013. The proportion that was supportive increased from 28% in 2010 to 47% in 2013.

The strength of opposition for new homes has also decreased. The proportion of respondents stating they would strongly oppose new homes being built in their local area almost halved from 15% in 2010 to 8% in 2013. At the same time the proportion of respondents who said they would strongly support new homes more than doubled from 5% to 11%.

Unsurprisingly, those who own their own homes are more likely to oppose new developments changing the face of the neighbourhood in which they have invested.

37% of owners were opposed, compared to 17 % of council tenants, 20% of private tenants and 21% of housing association tenants. Between 2010 and 2013 opposition fell by a similar proportion for all tenure groups.

Source: Public attitudes to new house building: findings from the British Social Attitudes Survey 2013

Balfour Beatty has won a £24m contract to build accommodation for more than 400 students of the Royal College of Music in London.

Client for the project is Campus Living Villages and completion is scheduled for September 2015.

The accommodation on Goldhawk Road in Shepherd’s Bush will replace existing facilities that Balfour Beatty will also demolish. The new development will have 417 new bedrooms, two self-contained flats and amenities including a gym, laundry, cinema and music practice rooms.

The bedrooms will have acoustic features to enable music students to practice without disturbing others, as well as an open plan central amenity space that breaks out onto external courtyards and an informal performance space.

The building has been designed to be BREEAM ‘Excellent’, with roof mounted photo-voltaic arrays, LED lighting and on-demand heating systems for individual bedrooms.

Other student accommodation projects that Balfour Beatty is currently building around the UK include the Holyrood Postgraduate Student Accommodation & Outreach Centre for the University of Edinburgh and 199 Westminster Bridge Road in London for Urbanest.