Industry news

Contractor enjoys run of success H

ousing contractor Wates has enjoyed a successful start to the year with a series of positive outcomes across its repair

and maintenance, regeneration and new build business areas. Wates Group’s results for 2017 showed a 5.9 per

cent increase in turnover to £1.62bn and profit before tax at £35.7m. The company saw its order book hit a record £5.1bn heading into 2018. James Wates, chair of the company, said its performance had been rising steadily over recent years despite challenges arising from the Government imposed rent cuts and a changed climate after the Grenfell Tower fire with social landlords moving planned spending towards safety work. He said: “We are seeing a change in the way

budgets are allocated – a lot of local authorities and housing associations are redirecting spend from what has been bathroom and kitchen improvements into fire safety. As they have made that switch there has been a slight delay in orders coming through, but not a material one. We are helping in a number

of areas to take cladding off buildings – we think we are trusted as part of the solution.” Wates has been chosen as a joint venture partner

for a giant £1bn regeneration programme covering 12 estates in the east London borough of Havering. This will see 3,000 new homes built in the borough over the next 12 to 15years, with the programme in line to receive £33m in grant from the Mayor of London. Plans include the creation of a construction

academy through a partnership with Havering College and the Construction Industry Training Board. It is intended that around 165 apprenticeships will be delivered over the scheme. Roger Ramsey, leader of Havering Council, said:

“This is the most exciting and ambitious council home building programme in London. Forming this joint venture will allow us to provide high- quality new homes for existing residents and young people who want to stay in the borough.” Midlands-based housing association Longhurst Group has appointed Wates Living Space to a

maintenance contract worth close to £100m. The 10-year contract includes repairs, void refurbishments and planned maintenance work to 16,000 of Longhurst’s 19,000 homes. In February, Southern Housing Group and The Guinness Partnership both appointed Wates Living Space to repairs contracts worth a total of £13m. David Morgan, managing director of Wates

Living Space, said: “Being appointed by Longhurst Group to deliver this contract is further evidence of our status as a trusted provider of large-scale maintenance services of exceptional quality to housing associations and councils throughout the country.” Sharon Guest, executive director of housing

services at Longhurst, added: “We are delighted to be working with Wates Living Space to provide a new and improved repairs service to our customers. Having a single contractor to manage repairs across our member companies and the many communities we serve will ensure that we can provide a more efficient and consistent service to our customers.”

Private rents falling for first time in six years

Private sector rents across the UK fell for the first time since 2012 during the first quarter of 2018 although the rate of decline was less than one per cent, The Deposit Protection Service has revealed. In the latest version of its Rent Index, the average

UK monthly rent during Q1 of 2018 was £772: some £4 (or 0.54 per cent) less than Q4 2017 (£776). The DPS says that if rents remain unchanged or there is another decline in Q2 2018, then the UK will experience its first annual rental decrease since Q4 2009. But the unpredictability of the current rental

market was revealed when HOMELET’s rental index for April was released showing on the basis of their figures, the average rent in the UK is now £918, up by 1.5 per cent on a year ago. When London is excluded, the average UK rent is now £761, a rise of 0.9 per cent on the year. Julian Foster, Managing Director at The DPS, said: “The decrease in average rents could represent

the beginning of a substantial development for the housing sector and a significant indicator for understanding the wider economy. Rent growth began to slow in summer 2016, and the slip into negative figures suggests that there is a genuine long-term issue affecting the private rented sector. It implies there is more at play than a short-term or local correction to excessive prices.” Northern Ireland experienced the biggest

percentage decrease of any UK region: down 3.14 per cent from £544 to £527, replacing the North East as the most affordable UK region in which to rent property. London saw an £18 decrease in average rent (falling from £1,325 to £1,307): the largest fall in value of any UK region and the second consecutive quarterly decrease for the capital. For HOMELET, the average rent in London is now £1,588 up 4.5 per cent on last year, while the North East saw rents grow by 2.8 per cent in a single month between March and April 2018.

Only four UK regions experienced growth in

average rent according to DPS: the South East (up from £870 to £879), the East Midlands (from £599 to £602), the North West (from £594 To £595) and Wales, which also experienced the biggest growth (up £21 or 3.62 per cent from £573 to £594). Every type of property became cheaper on

average to rent, with flats experiencing the biggest decrease (down £10 or 1.20 per cent from £796 to £786) in the quarter. As a proportion of salary, rents decreased from 32.63 per cent to 32.45 (using 2017 average wage data).

Contractor blames Grenfell for drop in profits

The Mears Group has blamed delays to work orders following the Grenfell Tower tragedy as a major factor in its profits falling by almost eight per cent over the past year. The contractor carries out repairs and

maintenance work for many social landlords, as well as providing housing management and care services across the housing sector. After a difficult year for business it has reported a drop in revenue from £940.1m to £900.2m (£766.1m from housing contracts down three per cent and

£134.1m from care, down 12 per cent) and a fall in profits before tax from £40.1m to £37.1m for 2017. Mears has seen expected work orders delayed

while customers reassess their planned maintenance programmes, as well as disruption to its care arm, which led to a restructuring of the business and some closures. However, the company has said it expects an upturn in its fortunes as a result of a “healthy pipeline of opportunities” as it bids for £2bn of work.

David Miles, chief executive at Mears,

said: “While 2017 proved to be a challenging year, we made solid operational progress. The decline in housing revenues following the tragic events at Grenfell Tower has stabilised, although there still remains some uncertainty as to the speed at which these revenues will recover.” He added: “The strategic evolution of our business means we are gaining access to opportunities that previously would have been out of our reach.” | HMM May 2018 | 21

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