8 INDUSTRY NEWS


Prices forecast to rise after Brexit slowdown


Average property prices are forecast to rise over coming years despite a recent slowdown in the market, which has seen house price inflation falling from 7 per cent in 2016 to 3.7 per cent driven by uncertainty around Brexit. According to PwC’s latest UK Economic


Outlook average UK house prices could rise by as much as £8,000 in 2017 to £220,000, with the forecast for 2025 reaching over £300,000. PwC believes that housing transactions,


which tend to be more volatile than prices, are where the uncertainty caused by Brexit has manifested itself most strongly. Year-on-year, the number of transactions have been negative for 12 consecutive months. The London property market has


reportedly been the most severely impacted by economic and policy uncertainty, and the recent changes to stamp duty. Price inflation in London in the first four months of 2017 was around 4 per cent, compared with around 13 per cent for the same period in 2016. PwC projects the capital’s housing


market will continue to slow, with only 2.8 per cent and 3.8 per cent growth on average in 2017 and 2018 respectively. Elsewhere in the UK, the east and


southern regions of England are predicted to continue to grow above the UK average, but Northern Ireland and the north east will continue to lag behind. While the average house price across the UK has grown by 17 per cent since mid-2007, over a quarter of all local authorities are still below the 2007 peak. Richard Snook, senior economist at PwC,


said: “There is a huge disparity in how sub-regional housing markets have performed since the recession. The local authorities that have experienced the greatest falls in house prices since 2007 are


all based in Northern Ireland, while London dominates biggest risers, with all boroughs experiencing price growth of over 50 per cent.” PwC’s analysis has also found that


London’s housing market has seen a structural shift recently, as house price growth has moved outward from the capital. Growing unaffordability in London, coupled with policy reform, has seen house prices in prime central boroughs slow, while prices in the outer boroughs and the commuter belt have risen. Over the last two years, house prices in


the outer boroughs have risen nine per cent faster than inner boroughs, while growth in the fastest growing cities within the commuter belt (including Basildon, Luton and Slough) exceeded those in London by 4 per cent in 2016. Research also found that UK GDP


growth will slow from 1.8 per cent in 2016 to around 1.5 per cent in 2017, and 1.4 per cent in 2018. PwC puts this down to slower consumer spending growth and the drag on business investment due to ongoing political and economic uncertainty regarding Brexit. While UK economic growth held up


better than expected in the six months following the Brexit vote, growth slowed in the first half of 2017 as inflation rose sharply, squeezing household spending power. John Hawksworth, chief economist at


PwC, commented: “Brexit-related uncertainty may hold back business investment, but this should be partly offset by planned rises in public investment. Fiscal policy could also be further relaxed in the 2017 Autumn Budget, to offset the ongoing squeeze on household spending power. “There are still downside risks relating to Brexit, but there are also upside


possibilities if negotiations go smoothly and the recent Eurozone economic recovery continues. We expect the UK to suffer a moderate slowdown.”


Report finds construction falling behind on diversity


Research has found that just 6 per cent of construction companies in the FTSE 350 have executive committees which are over 25 per cent female, making the sector 19 points below the average. Women Count 2017, the second annual


report by the Pipeline, has been released, tracking and analysing the number of women on executive committees of FTSE 350 companies. Construction companies were also seen


to have below the average proportion of women executives that operate in P&L roles, 27 per cent compared to 35 per cent across the FTSE 350. Electricity, oil, gas, steam, waste and


water appeared in the top quartile for companies with at least 25 per cent women on executive committees, in P&L roles and on main plc boards. According to Pipeline, diversity success in other STEM based jobs gives hopes for construction companies. Analysis also showed the demonstrable


economic benefits for companies who have women in more senior roles. Net profit margins almost double in companies with at least 25 per cent females on their executive committee compared to those with none. Pipeline claims that if all FTSE 350


companies performed at the same level as those with at least 25 per cent females on their executive committee, the impact could be a £5bn “gender dividend” for Corporate UK. Commenting on the findings, Donald


Brydon, chairman of the London Stock Exchange Group, said the report “continues to confirm that companies with greater gender diversity perform better financially.” He added: “It is therefore concerning


that the percentage of women on executive committees has stagnated at 16 per cent for the second year,” he continued. “It is clear that companies will have to do more systematically to meet the Government’s target of 33 per cent by 2020.”


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