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8 INDUSTRY NEWS


Construction output falls as Brexit uncertainty continues


growth much softer than December’s 19- month high. Commercial work was the weakest performing area in January, “with anecdotal evidence pointing towards Brexit-related anxiety as the cause,”said IHS/CPS. New business growth eased to reach an


eight-month low in January. According to the PMI, construction firms widely reported softer demand conditions and longer sales conversion times, leading to what IHS/CPS calls a “wait-and-see” approach to spending by clients. Concerns about the near-term outlook for new projects resulted in more cautious staff hiring policies at the start of 2019, with the latest survey pointing to the slowest rise in employment numbers since July 2016. Meanwhile, slower growth of input


buying is said to have helped to reduce pressure on construction supply chains in January, with the latest deterioration in vendor performance being the joint weakest since September 2016. Construction firms also pointed to the smallest reduction in sub-contractor avail- ability for two and half years. Input price inflation continued to


The UK construction sector saw a “loss of momentum” in January, according to the latest PMI data, with business activity growth heading towards its weakest for 10 months. The IHS Markit/CIPS UK Construction


Total Activity Index dropped to 50.6 in January, from 52.8 in December. The index has posted above the 50.0 (no-change) mark in each month since the snow-related decline in March 2018, but the latest expansion was the weakest seen for a decade, IHS/CIPS confirmed. The Construction PMI data also showed


that new orders increased only marginally at the start of 2019, which contributed to the slowest expansion of employment numbers for two and a half years. Despite the slowdowns, construction


firms surveyed reported a positive outlook for business activity in 2019, with around 41 per cent of the panel anticipating a rise in output, while only 16 per cent forecast a fall. Large-scale civil engineering projects were cited as a key source of optimism, while Brexit uncertainty was the most commonly cited concern. A number of survey respondents noted that uncertainty caused by the current stalemate had led to hesitancy among clients, and a correspon- ding slowdown in progress on new projects. All three categories of construction


output recorded weaker trends than those reported in December. Residential work was the strongest performing area, although the latest expansion was report- edly only modest, and the slowest seen since March 2018. Civil Engineering activ- ity increased marginally, with the rate of


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moderate in January, with average cost burdens rising at the slowest pace since June 2016. Where an increase in purchasing costs was reported, this was generally linked to rising prices for imported construction products and materials.


Councils spend £22m a year renting back RTB homes


Government to continue with the Right to Buy scheme in a time of housing shortage. In the report, entitled ‘Right to Buy:


Wrong for London,’ Copley states that the number of Right to Buy homes now in London’s private rented sector has risen by at least 11,825 in the least five years, to reach a stock of approximately 54,000. These figures come in responses to Freedom of Information requests submitted by Copley to all London councils, and are reportedly conservative, as some councils did not provide data. It was revealed that 42 per cent of homes sold through Right to Buy in London are now being rented out by private landlords at market rates (up from 36 per cent in 2014). According to the report, councils are being


forced to rent back properties formerly sold under the Right to Buy to use as temporary accommodation to meet the needs of homeless families. It was found that at least 2,333 Right to Buy homes are now being rented by local authorities, with Newham alone renting back 808 of these at a cost of £12.9m per year. The total yearly cost to councils renting back these properties is stated to be at least £22,345,760. Westminster Council is reportedly renting


back 650 former council homes, but couldn’t provide a figure for the annual cost of this. Based on the average cost of renting back council homes across London, this could be in excess of £8m a year. In order to meet the growing need for


more housing, some councils are reportedly buying back homes they had previously sold under Right to Buy. Ealing Council, for example, has bought back 516 former council properties. While more than half of these were for regeneration projects, Copley tells that Ealing found themselves spending £107m buying these back – more than six times the £16.2m they received through the original sales of these homes, which were discounted by £15.6m under Right to Buy. Copley commented on his report:


“Something has gone very wrong when tens of thousands of homes built to be let at social rents for the public good are now being rented out at market rates for private profit, sometimes back to the very councils that were forced to sell them. “The Right to Buy is failing London and


Over £22m is being spent by councils in London each year renting back homes sold under the Right to Buy, with a London Assembly spokesperson calling for the aboli- tion of Right to Buy in the capital. In a new report from Labour’s London


Assembly housing spokesperson, Tom Copley, claimed that it was “reckless” of the


should be abolished. Home ownership is still important for many people, but it can’t come at ‘any cost,’ particularly if it means families struggling to put a roof over their heads or living in poor conditions. It’s not right that cash-strapped councils are having to fork out eye-watering amounts renting back proper- ties they were forced to sell at a discount.” He suggests that, “at the very least,” he wants to see the Government “exempt- ing newly built council homes from the Right to Buy and legislating to prevent Right to Buy homes being let on the private market.”


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