Confidence rises in region’s building sector

Central Square, which was recently constructed in Leeds city centre.  Picture Bruce Rollinson
Central Square, which was recently constructed in Leeds city centre. Picture Bruce Rollinson
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Confidence in Yorkshire’s construction market is slowly improving as activity grew in the last quarter, according to a new survey.

Nearly a quarter of chartered surveyors in the region (21 per cent) saw their workloads increase between July and September compared to 19 per cent in the previous quarter, the latest Royal Institution of Chartered Surveyors (RICS) Construction Market Survey found.

It comes as figures show office occupier take-up in Leeds city centre grew by 71 per cent during the same quarter.

Twenty four per cent of construction professionals in Yorkshire and Humber reported a rise in working on private housing schemes throughout July-September. Other areas of growth include infrastructure (23 per cent), private commercial (23 per cent) and private industrial (21 per cent). Activity in the public sector continues to underperform all others, according to RICS.

Jeremy Blackburn, RICS UK head of policy, said: “It seems that when it comes to private housing, the Government’s commitment to this critical sector has clearly had a positive impact on growth.”

However, he added that more affordable rental properties needed to be built in the suburbs and cities.

Looking further ahead, the region’s chartered surveyors are optimistic about the year to come with 50 per cent more respondents forecasting a rise in workloads rather than a fall. On average, contributors expect activity to rise by 2.7 per cent over the next 12 months.

Expectations for employment growth have also improved with 25 per cent more respondents in the region forecasting a rise rather than a fall, up from just two per cent during the previous quarter of the year.

However, both workload and employment expectations are still lower than what they were this time last year and anecdotal evidence from respondents suggests that uncertainty following Brexit is still causing them concern, RICS said.

Other areas of concern include financial constraints, which 69 per cent of respondents said is the most significant impediment to construction growth in the region. Planning and regulatory delays and the lack of skilled workers were also highlighted.

Richard Corby, director at Lambert Smith Hampton, said: “Confidence in the region’s construction sector is slowly returning. But the biggest issue at the present time alongside uncertainty appears to be credit constraints. However, the swift actions of the Bank of England in creating additional capacity for the banking sector to provide funding to meet demand should help alleviate some of this pressure.”

Meanwhile, take-up of office space in Leeds city centre in the same quarter reached 125,321 sq ft, a 71 per cent increase on the previous three months, according to the Leeds Office Agents’ Forum.

In the out-of-town market the figure was 65,944 sq ft, compared to 76,026 sq ft in the previous quarter.

In total, of the 53 deals that completed, five were over 10,000 sq ft, including 45,647 sq ft to Lowell at Leeds Valley Park.

Paul Fairhurst, director at Savills, said: “The UK’s property market may find itself in a more uncertain world, however this hasn’t impacted on occupational activity in Leeds especially for grade A space.”