Revised Figures for Construction Industry

The revised figures recently released by the Office for National Statistics show that construction industry output rose by 1.4% between quarters one and two in 2013. Although this still represents a 0.5% fall compared with the second quarter of 2012, this is significantly less than the 1% in the previous estimate. The upward revision of construction output from 0.9% growth to 1.4% growth confirms that the renewed sense of industry confidence, boosted by measures taken by the government in the form of Help to Buy and sustained investment in infrastructure are being converted in measurable growth. The figures also reconfirm that the economy is returning to growth, with a rise in GDP of 1.5% in the second quarter of 2013 compared with the same period in 2012. The upward revision of 0.1% for the economy as a whole was driven by balanced growth across the economy, underpinned by a rise in business investment of 0.9% in addition to rises in domestic consumption. Julia Evans, chief executive of the National Federation of Builders, said: “The revised GDP figures show that the foundations for long-term growth are being put in place, showing the construction industry is moving in the right direction and playing its part in driving economic recovery. However, more needs to be done to make sure that this growth continues into 2014 and beyond. Through the industrial strategy for construction, continued collaboration between government and industry will ensure that the industry continues on the path to sustainable growth for the future”. Julia continued: “in addition to the welcome upward revision to construction output statistics, the figures show that growth across the economy is balanced with business investment rising by £270 million from £29.19 billion to £29.46 billion between quarters one and two in 2013. The proof that businesses are investing across the economy is a further sign that private sector confidence is being converted into financial investment and economic growth”. For further information contact the NFB press office on 01293 586664 or email press@builders.org.uk

Right to Claim Statutory Interest After 60 Days after 16 March 2013

Under the Regulations, statutory interest will begin to accrue 60 days (or 30 days where the paying party is a public authority) after whichever is the latest of:

1.     the day the payee performs the obligations to which payment relates;

2.     the day the payee submits a claim for payment; or

3.     the day the payer verifies or accepts goods or services provided (where the contract includes a verification or acceptance procedure).

The effect of the Regulations is therefore to impose a limit on how long a payment period can be before statutory interest begins to accrue. On a strict reading of the Regulations, it appears that if the contract has a payment period of longer than 60 days, the payment period will still stand but the payee has a right to claim interest after the 60 day period has expired, even if that is before the agreed contractual payment date.

However, the guidance on the Regulations issued by the government explains things differently. The guidance states “businesses must pay their invoices within 60 days”, but the Regulations, on a strict interpretation, do not say this. The Regulations say that statutory interest will start to accrue after 60 days. Businesses therefore do not have to pay invoices within 60 days if they do not wish to do so, but they may face a claim for statutory interest after the 60 day period applicable under the Regulations has expired.

In theory, it could therefore be costly to have payment periods of longer than 60 days. However, payers may not need to worry unduly about reducing their payment periods to 60 days or less because there are two important exceptions to the rule.

First, the 60 day rule appears, on a strict interpretation of the drafting of the Regulations and the Act, only to apply in cases where statutory interest applies i.e. not in cases where there is a contractual “substantial remedy” for late payment. Arguably, this means where there is a substantial contractual interest rate, the 60 day rule will not apply. However, given the wide range of remedies for late payment now available under the Act and the Regulations, it may be that payees can now argue that an interest rate alone does not constitute a “substantial remedy” and that contracts must provide more generous remedies in order to exclude the Act and the Regulations.

Secondly, the Regulations say that the 60 day rule does not apply in cases where the contracting parties have “expressly agreed” a payment period longer than 60 days and that period is not “grossly unfair”. The Regulations state that, in determining whether something is “grossly unfair”, all the circumstances should be considered. Specifically, anything that is a “gross deviation from good commercial practice and contrary to good faith and fair dealing” may be grossly unfair. It is not clear what is meant by “expressly agreed” or whether standard terms and conditions can give rise to an “express” agreement.

Ref Source: Hawkswell Kilvington www.hklegal.co.uk

Recovery of Reasonable Costs after 16 March 2013

The right to claim the “reasonable costs” of recovering a debt only arises when:

1. the Act applies i.e. when there is no alternative “substantial remedy” for late payment in the contract; AND

2. the fixed sum of £40, £70 or £100 (depending on the value of the debt) does not cover the payee’s reasonable costs of recovering the debt.

It is not clear from the Regulations what is meant by “reasonable costs”, and this has led some to question whether the costs of adjudication or legal proceedings can be recovered as “reasonable costs”. However, although the courts have yet to clarify the issue, it is unlikely the Regulations will be interpreted in this way.

The legal costs of adjudication are irrecoverable and the Housing Grants, Construction and Regeneration Act 1996 (as amended) prohibits contracting parties from including any term in their contracts which provides for one party to the pay the other’s legal costs incurred in adjudication. It would therefore be contradictory if the Regulations allowed the recovery of legal costs in adjudication proceedings.

As far as legal proceedings are concerned, if the Regulations permitted the automatic recovery of legal costs, this could undermine both the detailed procedural rules and the courts’ general discretion in relation to the award of costs.

It therefore seems that the “reasonable costs” which payees can recover under the Regulations will be limited to costs incurred prior to formal debt recovery proceedings, such as the administrative costs of sending letters and possibly the cost of preliminary legal assistance such as solicitors’ letters.

Payees should, however, note that it is unlikely the paying party will voluntarily pay their “reasonable costs”, at least not without considerable scrutiny of the costs incurred. In some cases, it may be necessary to consider legal action in order to recover costs, which is unlikely to be appropriate unless significant costs have been incurred. Payees should therefore ensure they keep detailed records of the costs they incur in recovering debts.

Ref Source: Hawkswell Kilvington www.hklegal.co.uk

Late Payment under Construction Contracts

 

The Late Payment of Commercial Debts Regulations 2013 (the “Regulations”) came into force on 16 March 2013. They apply to all commercial contracts, including construction contracts, entered into after this date. The Regulations amend the Late Payment of Commercial Debts (Interest) Act 1998 (the “Act”) by introducing new remedies for late payment.

Remedies for Late Payment For Contracts Entered Into Before 16 March 2013

The Act implies into contracts a statutory rate of interest on late payments of 8% above the Bank of England base rate. The Act also allows payees to recover a fixed sum as compensation for late payment of a debt. The fixed sums are £40 (for debts up to £999.99), £70 (for debts £1,000-£9,999.99) or £100 (for debts over £10,000).

Remedies for Late Payment For Contracts Entered Into After 16 March 2013

The Regulations implement EC Directive 2011/7/EU, which attempts to combat late payments in commercial transactions across the EU by increasing suppliers’ rights.

The Regulations introduce two new rights for payees which exist in addition to the rights already available under the Act:

1. A right for payees to claim the “reasonable costs” incurred in recovering the debt.

2. A right to claim statutory interest after 60 days.

These additional rights only apply to contracts entered into after 16 March 2013.

Ref Source: Hawkswell Kilvington www.hklegal.co.uk

Government to End Self build Tax - GIVE YOUR FEEDBACK

As you will by now be aware, on April 15th the Government announced that it proposes to exempt self builders from paying the Community Infrastructure Levy (CIL).
CIL, which was introduced under the Labour Government but began to be implemented by some councils in January 2012 (and now affects thousands of self builders in dozens of local authorities), raised a levy on new homes set at a standard charge per m² of new development. On average, self builders and developers affected by CIL were being asked to pay £100-150/m² – typically adding 10-15% onto build costs. Homebuilding & Renovating and NaSBA have been campaigning on this issue.

The result is that the Government now proposes to scrap CIL for self builders but, as part of the legislative process, has launched a consultation on the change. We are keen for as many self builders (all of whom could be affected by CIL charges in the future) and companies with an interest in the self build industry (which has seen many projects postponed or downsized as a result of CIL) to respond. If the consultation is not in favour of the self build exemption, CIL may well affect 1,000s of self builders in years to come.

NaSBA are co-ordinating the consultation process. We urge you to take two minutes to comment.

http://www.nasba.org.uk

Government to End Self Build Tax

On the 15th April 2013 the Housing Minister, Mark Prisk, announced that the Government proposes to exempt self builders from paying the Community Infrastructure Levy (CIL). There will be a 6-8 week consultation on the changes which will likely come into effect during the summer.
CIL, which was introduced under the Labour Government but began to be implemented by some councils in January 2012 (and now affects thousands of self builders in dozens of local authorities), raised a levy on new homes set at a standard charge per m² of new development. On average, self builders and developers affected by CIL were being asked to pay £100-150/m² – typically adding 10-15% onto build costs. In some areas the charge was significantly higher, and in many cases self builders were being faced with invoices for £20-40,000 as a condition of being granted planning approval.
Details of the criteria for the exemption have not yet been finalised, but it is expected to involve self builders declaring that their project is non-speculative before commencement, and have to provide evidence as the project completes (e.g. by having the completion certificate and title in their name) as well as a set period of occupation, proved by Council Tax payments. The changes will only apply to Local Authorities in England.
Homebuilding & Renovating first began to highlight the issue in late 2011 and since then has been vigorously campaigning with the National Self Build Association (NaSBA) for self builders to be excluded from the charge. Homebuilding & Renovating Editor Jason Orme lobbied the then Housing Minister Grant Shapps on the issue at a meeting in Downing St. in April 2012, and much behind-the-scenes work has been going on to ease the burden for people building their own homes.
CIL was originally designed to replace the complicated (and fully negotiable) raft of local planning obligations such as Section 106s and Affordable Housing Contributions, which will still affect self builders.

Government Revising Planning Permission

The Government has announced it is revising its proposals to grant permitted development rights for larger house extensions for a period of three years.
Communities Secretary Eric Pickles made the announcement in the Commons when MPs debated Lords amendments to the Growth and Infrastructure Bill.
During the debate the minister told MPs: “I can announce that in the spirit of consensus we will introduce a revised approach to the contentious question of permitted development rights for home extensions when the Bill returns to the Lords.
“If we cannot persuade the other House, the issue will return to the Commons next week so that Hon Members can debate and vote further.
“Given the discussions I have had with colleagues who have concerns, I believe that the problem is eminently bridgeable. I would like the opportunity to build that bridge.”
His comments came before the Commons voted to reject a Lords amendment which would have allowed councils to opt out of the new regime, a move opposed by Coalition ministers.
Earlier Planning Minister Nick Boles had insisted that the proposed reforms “should make it quicker, easier and cheaper for up to 40,000 families a year wishing to build small-scale, single-storey extensions and conservatories.”
18th April 2013

Planning Permission News

Planning Permission relaxation - update to follow

Last Chance to Read our Winter/Spring Newsletter Page1

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How much is your building work going to cost?

Have you ever wondered why building quotes vary so much?

There are a number of reasons and knowing these will help you evaluate which builder presents the best option for successful completion of your new home or other building project. It is possible to calculate costs and doing this can be quite revealing. It will give you some insight into how the builders have arrived at their quotations.  

Looking at these calculations before approaching a builder will also help you budget for your building work or new extension. Perhaps more important, working out even a rough calculation will protect you from speculative builders who under quote.  Take the lowest quotation and you are risking increased costs and you might well find your project going over your budget. The cheapest quote is more often than not the worst option. Read more on this in my guide to choosing a builder.

Visit this link for a calculator to help you work out the costs of your building project. The cost per square metre figure allows for a finished new build home or extension. This includes kitchens and bathrooms but does not including external landscaping.

10 things you need to consider when viewing building quotations

1. The extra fees involved. These include Legal Fees, stamp Duty, Land Tax and planning Application fees
2. You must build in a contingency fund – building work can be unpredictable and something  unforeseen might arise
3. Standard size or bespoke windows? Bespoke will involve a higher cost and this applies to pretty much ‘bespoke’ anything else.
4. Extra storey or rooms in the loft? Some loft conversions can be more expensive if the existing structure is unsuitable
5. Which heating system will you choose? Ground source heat pumps are more expensive than air source  heat pumps but will save energycosts long term 
6. How green do you want your finished building project to be? Energy efficiency usually involves higher cost upfront with savings made over a longer term
7. Finished effects – type of materials used can greatly affect the cost. eg roofing slate type needs to be specified as quality and cost varies significantly
8. Landscaping, will your builder design and organise this or will you do it yourself?
9. Final finish on kitchen and bathroom and other fittings all affect quotations
10. Design costs. Opting for design and build provides a much more cost effective option

Obviously if you decide to self build you will be saving on labour costs. But bear in mind the skill and time involved. Hiring different trades will take you longer than employing a building contractor. Whichever route you decide to take, building costs are affected by quality and specification. Always choose a builder who provides a fully detailed and realistic quote.  

Renovations Homes - How to retain original features

Keeping original features retains the character of older homes and listed properties, without them you are in danger of creating a theatre set. The reason most people take on a renovation project is a love of old buildings and the desire to create a comfortable and characterful home. Most people in these circumstances are determined to save as many of the original features as possible.

It’s often the little details that count and that will make the difference to your finished renovation. It’s important to be flexible and be prepared to make decisions about original features as your renovation progresses and the condition of those features is revealed.

At the same time it is important to plan ahead and to incorporate those original features in your renovation plan. Use a specialist builder and designer with experience of older properties. They will be able to advise you on what can be saved, used and restored as well as how to retain original features and how to best incorporate them to ensure you have a comfortable stylish home.

Original features such as inglenook and feature fireplaces, original timbers and beams, plaster work and roof tiles can make considerable difference to your finished renovation. Don’t discount specific features from buildings that were originally used for agricultural, industrial or religious use. This might include dove cots, cattle troughs, feature windows, high ceilings, brick work and original flooring.

What you need to consider

• Firstly can the original feature be retained 
• The condition of the feature might reveal itself at a later stage of your renovation 
• How will the feature affect your room layout and design?
• What will removing old paint reveal? Is it better to recreate from new using a specialist?
• Can you make better use of original features by using them elsewhere 
• Beams and ceilings in agricultural buildings might be too low so relocation will be the only option 

To see some of Kent Building Developments Renovations >>>>>

Garden Rooms

 

More people than ever are opting to extend their homes rather than move. Creating new spaces,  more room and improving the layout can make your home work more efficiently. Garden rooms can be designed to create an area where you can enjoy the warm breeze of a summer day, or in winter, shut out the cold and get cosy by the fire! Garden rooms are a fantastic way to let you enjoy your garden all year round. Good design will create a seamless transition between the house and the garden.

Whilst the majority of garden rooms are attached to properties, they can work just as well free standing as a part of your garden. Garden Rooms by Kent Building Developments can create that special area for different uses such as,
 

      Studios for art work and pottery

      Home cinema

     Children's playrooms

     Teenage hideaways

     Swimming pools

     Home offices

 

 A Garden Room may be a once in a life time opportunity, therefore,  good planning and design will make sure your Garden Room brings you more space, adds value to your home and complements the style and individuality of your home.

What you need to consider when planning your garden room

      Planning permission may be needed (link to other article)
     Will it be eco friendly and energy efficient
     Modern or traditional, glass or brick to blend in with your home and garden or something  more original, for example,  Green Oak
    Wide doors to connect you with your garden
    Type of heating

 

     A garden room for business and work

Around 30% of the working population now work from home. Garden rooms are the perfect solution, warm and spacious. Good design will create an office, or meeting room free from the distractions of a home environment.

Kent Building Developments Garden Rooms

Whether attached or a stand-alone construction. Garden Rooms by Kent Building Developments benefit from the highest standard of workmanship with comfort, energy efficiency and the use of environmentally friendly elements. Your garden room will be designed and built to your personal requirements and preferences.

Kent building Developments garden rooms are designed with style, longevity and quality in mind. Please visit our photo gallery. We are a Yorkshire based family run company and are committed to 100% customer satisfaction, with comprehensive guarantees.