ROOF Blog

Deloitte, Britain’s second-biggest professional services group, is to seize a foothold in the £2 billion commercial property consulting market by acquiring one of Britain’s oldest real estate firms. The ‘big four’ accountant will merge its real estate practice with Drivers Jonas, the UK’s eighth-biggest commercial property adviser. The new unit will have revenue of £110 million and 700 staff, but John Connolly, Deloitte’s chief executive, who forged the deal, said that fee income is expected to more than double to £250 million within three years. Mr Connolly said that Deloitte identified Drivers Jonas as the most attractive target in the commercial property market because of its size, profitability and reputation.

Britain is unlikely to return quickly to the peak rate of housebuilding during the boom of the past decade, the chief executive of Taylor Wimpey has said. Despite reporting a rise in demand for new homes that was better than expected - running at nearly a third higher than the dark days at the end of 2008 - Peter Redfern said that planning requirements would hold back a wholesale recovery in building volumes. Mr Redfern said: ‘At the peak, the industry in the UK was building 170,000 units. That has halved and last year the industry completed around 85,000 to 90,000 units. It will be a very long time before we get back to those high volumes because of the constraints on land availability and the planning system.’

Housing associations are preparing for a funding crisis that will result in a shortfall of newly built social homes from next year. The Chartered Institute of Housing (CIH) has warned of the risk that the needs of the poorest will not be met from 2011 as public money dries up, leaving housing associations less able to finance the social rented sector. The Tenant Services Authority (TSA) said that it expected the number of homes built by housing associations to fall from 50,000 a year last year to 40,000 a year after 2011. Even at current funding levels, housing associations — the main providers of UK social housing — said that, to stay afloat, they had been forced to switch away from provision of social rented homes and towards more lucrative home ownership schemes geared towards renters on higher incomes.

The government risks repeating the mistakes of the postwar housing boom by wasting hundreds of millions of pounds on funding ‘grotty’ new homes, say MPs. The Homes and Communities Agency (HCA), which has an annual investment budget of more than £5bn, has admitted that 27 of the private-sector projects it has bailed out scored five or less out of 20 on the industry’s Building for Life benchmark, with two scoring just 1.5. Homes failed on a range of basic measures, including poor space standards and over-reliance on single-aspect dwellings; inflexibility; low sustainability standards; and poor compatibility with neighbouring properties.

Construction activity fell in December for the 22nd month in a row as a surge in housing was offset by a sharp decline in commercial building. The construction purchasing managers’ index, where any level below 50 signals a drop in business activity, rose slightly to 47.1 from 47 last month. ‘December was another disappointing month for the UK construction sector. Unlike other parts of the economy, it seems unable to escape the shackles of the recession,’ said David Noble, chief executive of the Chartered Institute for Purchasing and Supply. ‘Purchasing managers painted a bleak picture as firms suffered from reduced client demand and falls in new business.’

The Homes and Communities Agency (HCA) has shortlisted 265 bids totalling nearly £550m in round two of its Kickstart housing delivery programme.

Shortlisted bidders include a mix of RSLs along with national and local developers aiming to unlock up to 22,000 homes across the country.

Bidding opened in September with the criteria that eligible schemes should be housing-led with a minimum of 50 homes (fewer in rural areas or if the scheme delivers to Code for Sustainable Homes Level 5 or 6) and that sites should have detailed planning consent in place or the ability to achieve this by the end of March 2010.

Sir Bob Kerslake, HCA chief executive, said: ‘Kickstart continues to be a crucial component in maintaining momentum in the house building industry.’

A due diligence process will now follow, which will look in detail at value for money, design, financial viability and risk, as well as an assessment of quick delivery.

The economy shrank by 0.4 per cent in the three months to the end of October, an unchanged rate of contraction from the third quarter, the National Institute of Economic and Social Research (NIESR) has estimated.

The projection of continued weakness came after official figures showed that industrial production in September had picked up after factory stoppages caused a sharp fall in output during the summer, but there were no signs yet of a sustained upturn.

NIESR director Martin Weale, said: ‘People have been hoping for a clear recovery and that isn’t visible yet. The past pattern doesn’t lead us to think there has been a strong turnround.’

Mr Weale foresees the economy bouncing along the bottom at depressed levels of output for some time, even if spending brought forward to the fourth quarter to avoid the hike in VAT rates early next year provides a modest boost to growth in the short term.