Hot topics

Question 1

What steps would you undertake in the event of a MC Insolvency?

Answer 1

RICS Guidance Note - Termination of Contract, Corporate Recovery & Insolvency:
- Secure site and any materials of site - moved to site if paid for
- Exercise relevant clauses to terminate
- Call in any bonds due
- Explore step in rights if CW’s in place
- Consider if an insolvency expert appointment is required
- Keep detailed records of current progress and the time of insolvency
- Prepare and issue statement of valuation highlighting current progress of works
- Prepare a notional FA
- Liaise with appointed administrators where needed
- Make a schedule of works to complete at the date of termination
- Undertake steps for the reletting of works

Question 2

What key challenges does the Global Economic Recession present to your area of surveying?

Answer 2

• Rising inflation rates of 10 - 11% have resulted in BoE increasing base interest rate
• Created pressures on developers & building owners who have pressure on budget plans prior to interest rate rises
• WFH has scaled back office space requirements meaning office space projects are being repurposed or postponed
• Financial viability of new developments & ongoing maintenance programmes in many cases is not stacking with borrowing, energy & labour costs all rising

Question 3

What effect has the conflict in Ukraine had on the UK property & construction industry?

Answer 3

• High dependence of Europe on Russian gas and oil has resulted in significant energy price increases
• Cost of producing building products that require high energy has increased: Steel / Bricks / Plastics / Ceramic
• Conflict has intensified a turbulent market previously effected by Brexit, Covid-19, Industrial strike action, energy fuel costs & inflationary pressures

Question 4

How has Brexit effected the UK market?

Answer 4

Movement of personnel
- now restricted from 31st Dec 2020
- Employers now have to register as sponsors
- Must now meet job, salary & language requirements
- Reduced availability of labour and caused cost increases

Movement of materials
- Have to meet Rules of Origin for products
- Increasing costs due to more administrative work
- Not having to pay tariffs
- Particularly effected: steel / plastic components / plaster board

Question 5

Are there any RICS guidance notes on Brexit?

Answer 5

• Number of position statements highlighting concerns on a sector by sector basis including an outline of what the RICS think the UK gov should be doing to make Brexit work for Post-EU UK

Statement highlights:
- Encouragement of growth and diversity as non-UK workers accounted for 12.6% of workers
- EU led funding stream such as European Investment Bank (EIB) losses could have a significant impact on project delivery
- RICS calling for UK Gov to keep EIB funding or new funding stream to plug the gap and prevent reduction in infrastructure investment

Question 6

What are the recommendations made by Bichard?

Answer 6

36 recommendations including
- Undertaking an independent review of effectiveness at working towards the public advantage once every five years
- Renewed focus in the Public Interest - appointment of a Public Interest Panel to advise GC
- D&I panel to advices Standards and Regulation Panel and RICS board