Setting aside the uncertainty of interest rate rises, what could severely hamper the speculative development all peer Cambridge agents are calling for in the long term - and have been eagerly anticipating for Q4 2014 and Qs 1 & 2 in 2015 - is a steep increase in build costs.
With developers keen to lock-in to fixed prices well ahead of the start of the build contract, contractors and the supporting services, professions, suppliers and merchants are in an enviable position where, in the south east of the country at least, they can cherry-pick the best projects.
There is circa 9 million sq ft of office space under construction in central London with about half that space again set for demolition or significant strip out, according to Deloitte Real Estate’s most recent London Office Crane Survey.
But building firms are reporting tender price rises so far this year due to increases in material prices and labour costs and not because of strong margin growth.
At the start of the year, the Construction Industry Training Board (CITB) was forecasting almost 26,000 new construction jobs in the next five years in the eastern region. This means, in figures broken down by CITB, 5,150 new employees required each and every year to 2018 to ensure the fulfilment of planned projects here.
The same CITB report identified that occupations most in demand would be in the wood trades and interior fitting, the electrical trades and installation. Stepping back from those directly on site at the brick-face, and it is plant mechanics, civil engineers and construction managers who would be the most sought after to ensure delivery.
Construction companies in the UK are seriously concerned about a skills shortage in the remainder of this decade as the economy continues to recover.
You see, we’ve not been encouraging the nation’s children towards careers in construction for several decades now. Quite the opposite.
The accumulation of this failure and any current or future politically-popular drift towards limiting access to, or creating an environment in which, skilled, migrant labour are discouraged to come and work on our building sites can only mean we must be prepared to pay the price.
Ultimately, all tenant occupiers will but those occupiers who can commit to pre-let sooner rather than later in this ever-tightening market will be the ones to benefit down the line. Leaving those who are more reluctant to consider the reality of their future property needs or, in doing so, hesitant to commit as the ones who will be paying an ever higher bill for the skills that make the builds.