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Housebuilders to re-start work at construction sites despite coronavirus health warning

Building site workers may still be required to work within two metres of each other, in which case they should “work side by side, or facing away from each other”

Redrow PLC -

Two of the country’s largest housebuilding companies have announced that their construction sites will return to work in coming weeks.

The updated plans could set in motion the return to residential building for the whole industry, which will be a much-needed boost to the economy amid growing concerns that a lingering lack of activity would have irreversible effects on the country. 

However, Taylor Wimpey PLC's (LON:TW.) and Vistry Group PLC's (LON:VTY) return-to-work news comes the morning after the government’s chief medical officer advised that coronavirus social distancing measures will need to remain in place at least until the end of the year.

And earlier in the week trade unions representing construction workers have expressed worries this week about the “watered down” safety advice for the industry.

Building site workers may still be required to work within two metres of each other, according to fresh guidance from the Construction Leadership Council (CLC), in which case they should “work side by side, or facing away from each other, rather than face to face”.

When this is not possible and workers have to operate “face to face” within two metres of each other workers should “keep this to 15 minutes or less where possible”, the CLC advised.

In a letter to the secretary of state for business, energy and industrial strategy, Alok Sharma, trade union Unite warned that the CLC advice “undermines the safety of workers on construction sites and may even become a contributory factor to the spread of Covid-19 in our communities” and called for the “defective” advice to be withdrawn.

“Construction workers’ health is being threatened by watered down advice,” said Unite national officer for construction Jerry Swain.

“We sincerely hope that this is not a case of the economy being put before the health of construction workers and their families.”

A hotline has been launched for workers to report concerns and provide evidence of unsafe working practices, which can be on an anonymous basis.

On Taylor Wimpey and Vistry's re-opening plans, Swain said: "No construction sites should re-open unless social distancing can be maintained at all times, they must also take responsibility for ensuring safe travel to and from home.

"Equally contractors will have to ensure that there is an enhanced cleaning regime in place to assist in the effort to prevent the spread of the virus.

"Sites should not reopen until they can ensure workers safety. If workers believe the contractor is not meeting these requirements workers should contact Unite for advice and support."

We would be building 

Although construction has been deemed a permitted activity by the government, house-builders closed pretty much all of their sites in late March amid a public outcry. 

Redrow PLC (LON:RDW), for example, initially said it was keeping many of its sites open with “enhanced” cleaning facilities and social distancing measures in place, before making a swift U-turn days later, when it was joined by Berkeley Group (LON:BKG) amid a barrage of criticism as the rest of the country was put into lockdown to limit the spread of Covid-19.

Taylor Wimpey, which shut all of its UK sites on 24 March, said on Thursday it will begin a phased process of reopening construction sites will on 4 May, whilst sales centres, show homes and regional offices are to remain closed, with the ability to sell houses digitally.

“We are now confident that we have clear plans and processes in place so we can safely start back on site in a phased way,” said chief executive Pete Redfern.

New working practices include additional precautionary and risk management measures compliant with government coronavirus guidance such as a range of bespoke protective equipment (PPE) for two-person tasks.

Subcontractors will return to Taylor Wimpey's construction sites from 11 May, following a week of site preparation from site managers, which the company said was line with the “current government advice in England and Wales”, though Scottish sites will remain closed until further government advice is provided there.

Management of the FTSE 100 group, which has an order book of £2.7bn worth of homes, do not expect meaningful build progress until mid-May.

Similarly, Vistry said that, in accordance with “strict guidance and protocol” from the government, Public Heath England and the Health & Safety Executive, we have taken the decision to restart work on “circa 90%” of our social housing partnership sites and “a significant number” of private residential sites from 27 April. 

Citing the guidance from the CLC and support from supply chain partners, Vistry said its new safety protocols include “modified site operational practices, revised risk assessments, inductions, and changes to site format, including bespoke PPE for two person tasks”.

READ: How much of an economic shock can housebuilders take from coronavirus?

The news, said analysts at UBS, is “positive and important for the industry to return to some sort of normality, and importantly, ability to generate cash”.

“Any return to activity will be welcome,” said analyst William Ryder at Hargreaves Lansdown, adding that it was also good news that Taylor Wimpey and Vistry had both managed to add to their order books through the lockdown, though obviously sales rates had dropped significantly.

“To be clear, we don’t think everything is hunky-dory for Taylor Wimpey or the wider sector,” Ryder added. “The risk of a prolonged recession, falling house prices and sales volumes is still heightened – and we know how quickly that combination can demolish profits for housebuilders.” 

He said the update contained better news than had been feared, and news on other sector operators would come from rival Persimmon (LON:PSN) in an update next week.

Russ Mould at AJ Bell said the updates show how the UK housing market is beginning to be defrosted, though “it is becoming more apparent there won’t be a return to outright ‘normality’ in the UK any time soon”.

Looking to the wider economy, he added: “This is good news beyond the sector as any disruption to the country’s housebuilding efforts could exacerbate an already pressing housing crisis.

“In an example of how we might have to live with coronavirus until there is a vaccine or effective treatment, new protocols will be in place to enforce social distancing.”

Quick facts: Taylor Wimpey

Price: 141.45 GBX

LSE:TW.
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Market Cap: £5.16 billion
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