Newsbriefs

Citation

(2012), "Newsbriefs", Structural Survey, Vol. 30 No. 1. https://doi.org/10.1108/ss.2012.11030aaa.002

Newsbriefs

Newsbriefs

Article Type: Newsbriefs From: Structural Survey, Volume 30, Issue 1.

RICS consulting on Japanese knotweed guidance

Keywords: Information paper, Japanese knotweed, RICS

RICS is consulting on a new information paper to help valuers and mortgage lenders consider the implications of a Japanese knotweed intrusion when undertaking valuations of residential property in the UK. Japanese knotweed is an invasive plant feared for its damaging effects when found on or near a property but these fears are often based on misunderstanding. There is a paper on identification and eradication of this problem plant in the current issue of this journal.

Surveyors now able to offer legal services

Keywords: Clients, Legal services, Multi-disciplinary practices, Surveyors

RICS members and other professionals in England and Wales are now able to set up alternative business structures (ABS) to offer a one-stop-shop for consumers. The ABS allows non-lawyer organisations to provide legal services and offers a greater degree of flexibility to lawyers about how they practise. This could provide clients interested in investing or buying property, for example, with a seamless service and access to all professionals involved in the process under one roof.

UK economy

Keywords: Commercial property, Economy, Trends, UK

RICS advise that the UK government has revised GDP growth forecasts down again but that the euro area turmoil is only partly to blame. Inflation is expected to gradually fall back towards 2 per cent target justifying the actions of the Bank of England. It would be convenient to be able to point the finger for the recent downshift in sentiment regarding the prospects for the UK economy on developments in the euro area. The seismic events taking place on the continent are clearly part of the explanation for the heightened sense of gloom amongst both businesses and financial markets. Yet it would be wrong to ignore the big domestic drags on growth which, to some extent, were being played down earlier in the recovery. Most notably, the deleveraging process in the household sector is only just beginning and, in all probability, has a considerable way to run. Meanwhile, the fiscal austerity programme being implemented by the coalition government is now beginning to bite. The key issue was whether freeing up the capacity from the public sector would spark activity in the private sector and so lead to a sharp recovery in business investment. Given the health of much of the non-financial corporate sector – it has been adding to its stock of assets for much of the past decade – this was always a possible if not a probable outcome. Unfortunately, the indications are that the lack of visibility on the scope for the economy to generate growth is discouraging business from committing to large-scale capital expenditure programmes. Against this backdrop and with a worsening turn of events in Europe squeezing exporters, it is hardly surprising that near term growth forecasts are being scaled back. For the whole of 2011, growth in the economy is likely to fall short of 1 per cent and while any numbers for next year need to be treated with a health warning, with suspicions that 2012 will be only marginally better. If this indeed proves to be the case, unemployment looks set to move higher, possibly climbing back to the three-million level on the more closely watched and broadly based ILO measure. RICS do have sympathy with the view promoted by the Bank of England that inflation will fall back towards the 2 per cent target over the next 12-18 months which, if nothing else, should help justify the strategy the authorities are pursing regarding quantitative easing. It will also help ease the pain for households who are at present facing a significant squeeze in their “real” incomes (the latest data shows CPI inflation running at 5.2 per cent compared with regular average wage growth of less than 2 per cent). Unfortunately, this at best will only provide a modicum of support for the real estate sector where activity levels are likely to continue to be inhibited by both a lack of confidence as well as a lack of finance. RICS expect regional trends to still be quite visible particularly in the real estate price data; this is something that continues to be highlighted in all the main RICS market surveys.

UK construction industry returns to growth

Keywords: Construction, Economy, Growth, House building, Trends, UK

Glenigan data shows that the construction industry has seen a 6 per cent year on year increase in the underlying value of projects starting on site. Growth in utilities, industrial, office, private and social housing project starts all contributed to the first growth seen by the industry in a year. “A poor August 2010 signalled the end of the 2010 construction recovery. The construction industry has seen a decline in year on year project starts since that time due to public sector cuts and weak private sector investment. While the return to growth is a positive sign, it is modest growth from a low base” commented James Abraham, economist, Glenigan. The most significant increase was in the utilities sector which grew by 24 per cent with several renewable energy projects starting on site. The decline in private housing which has dominated 2011 has bottomed out with modest growth of 1 per cent for the three months to August. Refurbishment projects, including a £50 m project in Kent, continue to drive growth in social housing projects with 11 per cent growth for the three months to August. “New build social housing projects will continue to fall due to Government cuts, while Glenigan expects private housing starts to stabilise over the coming months” commented Abraham. Regionally the southeast and southwest saw the most significant growth, with the East Midlands, West Midlands, Yorkshire and Wales all seeing annual growth of over 10 per cent. In stark contrast the underlying value of project starts in Scotland fell by nearly a third.