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Projects delayed as clients fear effects of credit crunch

Another £2 billion worth of building projects were mothballed last week as the credit crunch continues to cause panic among nervous clients. By Steve Menary

The shelving of 208 jobs in the last seven days brought the total value of work postponed in the last three weeks to £5.2 billion, according to exclusive research for Construction News by building information provider Emap Glenigan.

The number of schemes postponed fell slightly on the previous week but the total value of work deferred leapt by a third.

Schemes put on hold last week ranged from a £64 million mixed development in Wolverhampton – for tyre maker Dunlop and developer St Modwen – to a £230 million redevelopment of the former Yorkshire Chemicals site in Leeds by Reland.

The region being hit the hardest by the epidemic of work being delayed is London.

The North-west, Scotland and the South-east all suffered more than London in the penultimate week of October but the final week of the month saw two dozen projects – with a total value of £979.5 million – mothballed in the capital, according to Glenigan.

The schemes ranged from a £15 million office job at Gloucester Place in central London for the Portman Estate to a £305 million redevelopment of Northwick Park Hospital in Harrow.

In the past three weeks, 66 projects in London – with a combined value of more than £1.8 billion – have been shelved.

The other region being hit particularly hard is the Southeast – 105 projects worth a total of £660 million have been delayed in the last three weeks, although the total amount of work shelved last week was down on the previous week.

For clients and main contractors operating in southern England, the upside will be that tender prices from specialist contractors will become keener and this is already in evidence in the residential sector.

Another region being hit hard is Yorkshire & Humberside, where the amount of work being delayed is surging.

Last week, 21 schemes in the area, worth a total of £273.6 million, were shelved.

Projects postponed in this region ranged from an £810,000 Hexagon Properties scheme – comprising a dozen flats and three shops – in Carcroft, Doncaster, to the aforementioned £230 million Reland proposal.

Over the past three weeks, £544.6 million worth of work in Yorkshire and Humberside has been put on hold – the third highest of any region behind London and the South-east.

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