Olympics to Impact on London Construction Fees
Concerns have today been raised on the state of construction inflation by 2012, when London will host the Olympic Games. In the words of the Taxpayers’ Alliance, construction inflation is a prime “hidden cost” associated with the Games. The effect could be that new, London/South East-based, publically-accessible buildings, including doctors surgeries, universities and suchlike, could be much, much more expensive to build. The impact would also ricochet out to the housing sector, where soaring fees in respect of private residences would make it even more of a struggle for first-home buyers to gain a foothold on the property ladder than at present.
Ultimately, social housing could get pricier across the spread of London’s boroughs.
The Olympic Delivery Authority’s costs in respect of construction, as well as regeneration, are presently at £5.3 billion. This, according to the Taxpayers’ Alliance, places enormous demands on builders, with the resultant ripple effect for construction at large being that inflation within the sector is set to gain in each year leading up to the Olympics. In terms of new orders within the construction sector in London, significantly higher prices would result for buyers.
If, based on current industry models, construction inflation increases by 1.25 per cent per annum, then an extra £3.9 billion worth of building orders traceable to the Olympic Games will result.
The situation was detailed further by a spokesman from the Taxpayer’s Alliance, Matthew Sinclair, who stated: "Increasing the cost of construction in London and the South East is not only hazardous to the health of the British economy but also imperils the objective of getting enough new homes built to make things easier for first-time buyers.”
He added: "The bigger the bill for the Olympics becomes, the more damaging this knock-on hidden cost will be."
Construction International will focus on London Olympic-related construction issues in future News Items and other pieces.
Source – Construction International’s London Reporter
Recent related News Items:
New Report Highlights House Price Surge by 2012
McAlpine to Construct Prime London Olympic Stadium
Further Resources:
