Developer tax | Details were published on plans for a residential property developer tax which could be introduced in 2022. Consultations will run until 22nd July 2021.
SME builders | The Federation of Master Builders found that small builders say enquiries increase at the fastest rate in ten years in Q1 2021, but the strongest increase was from repair and maintenance work. The survey also found that 93% of builders said material prices were rising.
Industrial values | Over the past five- and ten-year periods, industrial land values have increased and are now similar to residential land values, higher than office or retail, according to Savills.
External walls | A new publicly available specification for the fire risk appraisal and assessment of the external wall of a multi-storey, multi-occupied residential building has been published for consultation and the British Standards Institution is seeking views on the draft code.
Unpaid rent | The head of UKHospitality has called on the government to help resolve a £6bn crisis in rent arrears in the hospitality sector as the temporary ban on evictions comes to an end next month. A letter sent to housing secretary, Robert Jenrick, calls for the ban to be extended to the end of the year and an adjudication process to share losses between tenants and landlords, with at least 50% of debt written off.
Pensions | Data from the Department of Work and Pensions, received under a Freedom of Information request by Unite, has shown that the majority of construction workers are not paying into a pension. Unite stated that the way construction is organised “with short-term engagements, rampant bogus self-employment and nefarious schemes such as umbrella companies, it is incredibly difficult for construction workers to have confidence in their continued employment so as to allow them to consistently pay into a pension scheme”.
Housing market | Net mortgage borrowing was at its highest month since data began in 1993, encouraged by the stamp duty holiday, borrowing rates, and low deposit mortgages. Homeowners borrowed £11.8bn more than they repaid in March.
Materials, commodities, and currencies
Material pressures | Hudson Contract has reported that some regional projects have reached a crisis point as materials are being diverted to infrastructure projects such as HS2, and large-scale housebuilding.
Timber | The Timber Trade Federation has warned that supply chain disruptions caused by Covid-19 restrictions have inflated prices and extended lead times. The CLC’s Product Availability Working Group warned that timber, roof tiles, and roofing membranes are the worst affected materials.
Carbon| Carbon permits in the EU have increased in price by 50% this year and exceeded €50/tonne for the first time.
Copper | Following on from last year’s boom, copper prices have increased 26% this year driven by promises of infrastructure spending in the US and increased demand for global digital networks. Analysts at Goldman Sachs have called copper “the new oil”.
US Dollar | The dollar is on course for its longest period without gains against a selection of peers. Investors who are more positive about economic prospects have pushed the exchange rate down for four consecutive weeks.
Factory output | The manufacturing PMI has increased to 60.9, the highest monthly reading since 1994. However, the increase has been fuelled by longer delivery times and rising input costs, in addition to a rebound in new orders.
UK savings | Nearly £200bn of savings have been deposited in UK banks since the start of the pandemic according to data from the Bank of England. In March £16.2bn was deposited, much higher than the £2.6bn monthly average in the year to February 2020.
Trade | Global trade in goods rose in nine consecutive months to March 2021, which Capital Economics has called “the longest uninterrupted expansion in over 20 years”.
Published every six months, our Tender Price Index is an analysis of inflation price deviation in construction prices. Click on the link above to view our most recent Index.
Friday to Friday
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Brent Oil $/barrel
As we look to the end of Covid-19 restrictions, encouraged by Boris Johnson’s affirmations that we are on track to remove measures by the 21st June, thoughts turn to how to get back to business as usual and the task of repairing the impact of a year of stop-start business. Rent debt and disrupted supply chains could negatively impact the economic recovery without ongoing government support (such as the Super Deduction and Pay as you Grow) or proper thought and planning.
However, with nearly all of the economy in a state of flux, over the coming period, it will be important to determine the signals from the noise – what has fundamentally changed in the market, and what is suffering from a temporary disruption. At the same time, we cannot but be distracted by the growing evidence of materials shortages and the impact this could have on project costs and programmes, temporary or not.
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