Construction Loans News:- Private housing workloads is supporting growth in the building industry, according to the Royal Institution of Chartered Surveyors UK Construction and Infrastructure market study.
A positive net balance of 24 per cent of chartered surveyors contributing to the survey said there was a rise in residential development for the first quarter of this year. This was up on the previous quarter’s figure of 20 per cent.
But the professional body’s economist, Jeffrey Matsu, warned this was against a backdrop of tightened credit conditions.
“Financial constraints continue to impede growth across the industry as lenders respond, to recent events such as Carillion and Interserve with less generous lending criteria, particularly to SMEs. Although market confidence has become more subdued in recent quarters, the outlook for workloads and employment growth has modestly improved,” he said.
However, finance brokerage Hank Zarihs Associates said there were was still plenty of alternative lenders offering attractive rates for construction loans and development and refurbishment finance.
Quality standards matter
RICS said permitted development rights, to convert and refurbish properties, had fostered growth in the short term. But it warned that research had shown some commercial to residential conversions had been of poor quality and design.
It said if the scheme, introduced in 2015, was to work then measures to ensure refurbishments and conversions were of sufficient calibre should be adhered.
“The future of PDR and its contribution to the government’s target of delivering 300,000 additional homes will need to ensure that regulatory safeguards and minimum dwelling standards are upheld,” it said.
The survey said in the past respondents had flagged up problems with planning delays but since the start of 2018, this worry had eased. It said concerns were now in-line with averages over the past six years of the survey.
” This has the potential to ease the housing shortage and speed up the delivery of developments,” said the survey.”
RICS said the number of respondents reporting a shortage of skilled labour had reached its lowest level in five years. Although a positive net balance of 41 per cent of respondents still said they struggled to employ all skill sets, particularly quantity surveyors.
Across construction as a whole, growth in workloads slowed across nearly all sectors in the first quarter. At the headline level, only +9 per cent more respondents reported a rise in workloads this quarter, the lowest net balance in six years.