The Property Report: Recovering brick by brick
Brick-by-brick Lancashire’s property sector is slowly starting to build its way back from the depths of recession. Residential development is leading the way.The Government’s Help to Buy initiative is now having a major positive impact on housebuilding across the county.New Bank of England Governor Mark Carney’s announcement it will not consider raising interest rates until the jobless rate has fallen to 7 per cent or below, which could take three years, will also have an impact on that market. The question is, can commercial property also move forward and play its part in the rebuilding process? We report from across the sector.
Surveys and forecasts all point to brighter times ahead with predictions that construction will continue to move out of its slump.However, there’s also a solid piece of evidence that things are starting to build. Demand for leading UK brickmaker Hanson’s products has risen so sharply it is re-opening a mothballed plant in north Lancashire.
Claughton brickworks closed its doors in April 2010 with the loss of 28 jobs after 100 years of production.Now it is being brought back online with Hanson looking for it to restart brickmaking by the end of the year. The company is investing £500,000 in the reopening and recruiting 31 staff.
Hanson says lead times for its aircrete blocks have gone from just four weeks a month ago to between 8-10 weeks now, and it is even asking customers not to stockpile bricks.[quote-block]
[quote-content]The big house builders are telling us their forward order books are looking really good. Help To Buy has really stimulated the new build market. The entire industry is under pressure from this hike in demand after five years of volume decline and we are looking to increase capacity as soon as we can.[/quote-content][quote-author]David Weeks, Hanson[/quote-author]
[/quote-block]But what of other, equally important property sectors? New projects are beginning to rise once again across the region, according to the latest survey by the Royal Institution of Chartered Surveyors.
Both commercial and infrastructure projects saw an increase in activity during the second quarter.With every £1 spent on construction in the UK generating almost £3 of wider economic growth, this is good news for the region and the wider economy.
The word being used is “confidence”, although it is being uttered in hushed tones. And there are still challenges including funding for projects.[quote-block]
[quote-content]“It is clearly good news that the amount of construction taking place across the North West seems to have turned a corner. But this modest improvement comes after a long period of contraction and many businesses in the sector are still struggling to keep their heads above water. Securing finance for development is still a big challenge and, despite the government’s attempt to revamp the planning system, the feedback we are getting suggests that this issue also remains a major obstacle to getting projects under way.”[/quote-content]
[quote-author]Simon Rubinsohn, chief economist at RICS[/quote-author][/quote-block]
Despite that, regeneration projects are moving forward across Lancashire, including a £13m student accommodation development in Preston that’s looking to spark the wider regeneration of the city’s Friargate area.