RSM finds housing crisis remains despite increase in new builds

14 June 2017

England remains in the grip of a housing crisis, in spite of new research from RSM suggesting improvement, with the shortage becoming especially pronounced in London. While the number of new homes built across England has increased, the number is still well below what is required. Pressure groups have unexpectedly been joined by businesses, in their efforts to lobby the Government and local authorities to put an end to the crisis.

Shortages of affordable homes have reached crisis levels across the UK, particularly in the capital, London, where the situation has become so chronic that alongside traditional pressure groups, even business groups have begun to campaign for the government, and local government, to change policy and improve housing conditions for their staff. One of the major campaigns is the Fifty Thousand Homes campaign that aims to build 50,000 new homes, per year, in London.

The latest research, from professional services firm RSM, into the number of new starts for houses in England, shows that for the first quarter of 2017 home-building has increased compared with recent years. An estimated 43,170 new starts were engaged in that time, 21% higher than the same period last year. The increase means that new housing additions are now 152% above that of the low-point in 2009, and around 12% below the most recent peak in 2007. The vast majority of the latest builds were owned by the private sector, at 85%, while housing associations accounted for 15% of new builds, and cash-strapped local authorities flagged far behind, beginning to build just 1% of new homes – meaning while production continued to rise, the majority of these would do little to address the lack of affordable housing.

RSM finds housing crisis remains  despite increase in new builds

In the period preceding the global financial crisis, the sector had seen a relatively stable period of new starts, at around 44,000 per quarter from 2004 to late 2007. However, recent government research from the Government notes that the current increase is far under what is needed to meet population growth figures and the considerable deficit built up during the low period – with a target of around 225,000 to 275,000 or more homes per year in England alone.

The market also faces a number other challenges, with young people finding it increasingly difficult to afford housing – while the number of builders required to build the new stock, around 400,000 per year, are currently not available. With Britain’s divorce from the European Union remaining an unknown quantity meanwhile, the potential for a “Hard Brexit” which ends freedom of movement from the continent is still a real prospect, a key route to access new builders is likely to be cut off in the not too distant future, as the government aim to cut net migration by tens of thousands.

Remarking on the latest figures, Kelly Boorman, Head of Construction at RSM, said, “It has taken some time, but new build dwellings starts are edging back up to pre-crash levels. This growth will need to be sustained if the government is to deliver on its commitments to tackle the current lack of supply in the residential housing market."

He added that, to meet the number of builders required to build housing for the future, “Firms may have to be a little more creative in their approach, offering quality training and apprenticeship opportunities and generous packages to attract and retain staff.”


Ensuring data quality imperative for smart asset management

25 March 2019

By implementing innovative Asset Performance Management systems, utilities firms can maximise their utilisation of assets and minimise maintenance costs across their portfolio. However, according to Louis Morgan of Smart Grid Forums, without securing quality management systems for the data which smart grids rely upon, companies risk missing out on the benefits of asset performance grids.

Smart asset management presents a major opportunity to professionals across the business spectrum. In this context, a new event hosted in London is looking to help smart-grid asset management professionals meet the needs of a changing energy industry with digital asset management. The first annual Grid Asset Management event is due to take place between the 14-16th of May 2019 at the Millennium Hotel in Knightsbridge, London.

The conference will bring together leaders and experts from across Europe, in order to benchmark their digitalisation roadmaps. In a piece posted on the Smart Grid Forums website ahead of the event, Louis Morgan, a Conference Producer at Smart Grid Forums, has outlined the importance of investing in innovative asset performance technology for utilities firms, which can help ensure long-term stability for assets management in the utility sector in the face of increased complexity  .

Ensuring data quality imperative for smart asset management

Traditionally, the decision to invest in a given asset was made on the basis of an expert’s judgement of the risks posed by its failure, having typically been assessed via a risk matrix or a similar qualitative method. After that, a decision would be taken as to whether it should be replaced. However, according to Morgan, as the pace of change and complexity increases, these methods can no longer provide the required level of certainty. Uncertainty about changes to consumption patterns and load profiles brought on by the energy transition produces a vast number of possible scenarios that investment planners must consider.

As a result, Morgan explained, “utilities are seeking to support their investment decisions with quantitative risk management methods, centralising expertise from across their operations into a consistent, numerical framework that accurately captures the risk posed by all kinds of asset failure to all stakeholders.”

Companies are doing this by turning to ‘smart grid’ utility management, or systems which work to invest in the maintenance and replacement of millions of assets spread across thousands of kilometres of network. However, this is by no means a silver bullet, and in the age of the smart grid, planning ahead is more complex than ever. To ensure the long-term stability of their grids, then, utilities must deploy standardised investment decision-making practises supported by advanced modelling capabilities.

Morgan elaborated that the best way of facing this problem is through the combination of condition, utilisation, reliability and demand data. In that case, risks can be quantified in financial terms and investment budgets can target the assets posing the highest total risk, thus deferring investment in lower risk assets and optimizing the long-term budget. However, decisions informed by these risk models “will only be as good as the data and the assumptions that support them”, meaning utilities must therefore find ways to improve the volume, variety, veracity and velocity of the data they employ in their investment planning models.

“This means digitalizing asset operations, rolling out sensors and implementing systems that integrate data from a range of internal and external sources in real-time,” Morgan expanded. “Utilities must also scour their business for expertise about different assets to ensure that their risk management frameworks accurately capture the true risks posed by asset failures.”

This is in keeping with a trend which goes well beyond utilities. Business leaders of all shapes and sizes are currently having to address how they manage data quality – as poor information being input into any automated system can essentially negate the efficiencies such systems bring to the table. To this end, robust data governance is critical.

Concluding his article, Morgan said, “It is clear that there is a great deal of opportunity for utilities to obtain significant business benefits from improving their investment planning capabilities. More accurate risk management, supported by a reliable data-driven method, will deliver better financial outcomes from investment activity... But to achieve these capabilities, a lot of work must be put in to establish the systems, processes and frameworks which underlie them. Utilities must also make difficult choices about how they quantify risk and the appropriate range of data to feed into their investment planning models.”

This topic will be tackled in-depth at this year’s Grid Asset Management 2019, a conference, exhibition and networking forum aimed solely at smart grid asset management professionals.