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Shortage of bricks and bricklayers in UK could hamper new home building
The increasing shortages of bricks and bricklayers in the UK could threaten future house building plans, according to the Federation of Master Builders (FMB). How to solve the current housing crisis is one of the hot topics in the run up to the general election with all parties pledging to build new homes. But the latest FMB state of the trade survey reveals shortages. Half of all small construction businesses, that’s one in two firms, are finding it difficult to recruit bricklayers and 62% of firms are waiting for up to two months for new brick orders while almost one quarter are waiting for up to four months. An additional 16% are waiting for six to eight months. ‘The brick manufacturers are working hard to reignite their kilns which were mothballed during the recession and the ever growing lack of bricklayers is causing concern,’ said Brian Berry, FMB chief executive. He pointed out that compared to this time one year ago, more than twice the firms are reporting difficulties recruiting these tradespeople. In the short term, many SME house builders may have to rely on migrant labour. ‘To ensure we have an ample supply of skilled workers in the future, the next Government must ensure it sets the right framework in terms of apprenticeship funding and apprenticeship standards,’ said Berry. ‘Also more construction firms, large and small, need to willingly engage with training. After all, there’s strong evidence to suggest that training apprentices is good for business,’ he added. The survey also shows that the private new housing market saw its net balance increase by 5% to +13. More businesses reported higher workloads while those indicating no change in workloads decreased to 49% from 62% in the fourth quarter of 2014. The net balance for total enquiries remained in positive territory for the eighth consecutive quarter as it jumped by 27% to +29. Fewer firms stated lower levels of enquiries, compared with the previous quarter, while more respondents reported a higher level of enquiries. The net balance for total expected workloads increased by 25% to +30. The percentage of businesses with negative expectations went down, to 15% from 24%, while those anticipating higher workloads saw a rise, from 29% to 45%. Around 40% of firms predict no change in workloads, down from 46% in the previous quarter. The residential sector’s net balance moved back into positive territory as it rose by 22% to +19. Some 32% are predicting higher workloads over the next three months, up from 18%, while fewer firms are anticipating lower workloads. The private new housing market’s net balance jumped by 24% to +30. The proportion of firms with positive expectations for workloads went up from 22% to 41%. In contrast, those anticipating lower workloads declined, to 11% from 17% in the previous quarter. Continue reading
UK landlords expect rent rises to slow by next year
UK landlords expect annual rent growth to slow to 1.7% by next year, down from 3.7% currently, according to the latest sentiment survey. However, a quarter want to buy more rental properties this year and 60% thing it is a good time to invest in the buy to let property sector, the survey from UK lettings agent network Your Move and Reeds Rains. Overall it suggests that after a recent spurt of rent growth, landlords anticipate that rent rises will taper off over the next 12 months, seeing a sharp slowdown from the current rate of annual rent growth to a steadier trajectory. According to the latest buy to let index from Your Move and Reeds Rains, average residential rents across the UK climbed 3.7% in the year to March 2015, the fastest pace for two years, but that is set to change. Indeed, the proportion of landlords who will not raise their rents in the next 12 months has increased from 56% in September 2014 to 60% currently. Only a minority of 40% intend to increase their rental prices before March 2016. The research also shows that over the last six months some 45% of landlords have witnessed an increase in tenant demand, rising from 41% of landlords in September 2014. There has been a boost in lettings activity recently, with new tenancies agreed across England and Wales climbing 6.9% in the month to March 2015. As a result, the proportion of landlords who expect tenant demand to grow further now stands at 63%, up from 56% in January 2014. Only 3% of landlords currently anticipate demand for rental properties to fall within the next two years. However, strong demand for homes to let is a considerable factor encouraging further investment into the private rented sector. Some 60% of landlords now believe that it is a good time to invest in buy to let, a rise from 54% of property investors in September 2014. The main reason underpinning this increase in confidence is that buy to let offers better capital returns compared to other forms of investment, cited by 54% of landlords who think it is a prime time to purchase a rental property. Meanwhile 40% of property investors perceive now to be an ideal time given that current market conditions offer the opportunity to buy properties at more attractive prices, as price growth has stabilised. Some 18% of landlords have already expanded their buy to let portfolio in the last year, and a further quarter of landlords expect to purchase another rental property in the next 12 months, an uplift from 22% in September, in a sign of rising optimism in buy to let as an investment. According to Adrian Gill, director of Your Move and Reeds Rains, demand for homes to rent isn’t going to dissipate. ‘First time buyers have been thrown a lot of floating aids in the past year, most recently the reform of stamp duty… Continue reading
UK Home Counties prime property rents see highest quarterly increase for four years
Prime residential rents in the UK’s Home Counties increased by 3.5% in the first quarter of this year, the highest quarterly growth in nearly four years, the latest index figures show. On an annual basis prime residential rents have increased by 4.7%, according to the Home Counties Rental Index from real estate firm Knight Frank which also shows that this strong growth in prime rents between January and March was underpinned by an increase in demand. The data also shows that in the three months to March 2015, the number of tenancies agreed across the Home Counties increased by 18% compared with the same period in 2014. Meanwhile, the number of viewings rose by 26%, property inspections increased 37% and the total number of prospective tenants registering grew by 25%. Over this period, demand was strongest for family homes offered for up to £5,000 per month while three to five bedroom properties accounted for 55% of all tenancies agreed between January and March, a similar level to the average for 2014. Tenants have favoured towns with access to good schools, such as Beaconsfield, Ascot, Cobham and Esher. Though not prevalent, there is evidence to suggest that some tenants are renting before making a decision about purchasing in the area, a sort of try before you buy, the index report also suggests. Meanwhile, corporate demand from those relocating to the Home Counties for work also picked up in the first quarter. Interest from corporate tenants is expected to continue to increase as the summer months begin and this is when demand tends to be highest. In terms of nationalities, some 70% of new tenants in the first three months of the year were from the UK, followed by tenants from North America and Asia. Continue reading
