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ARTICLE · 24 MAY 2011

A Good Time To Develop A Care Home?

Charles Russell Speechlys LLP
Charles Russell Speechlys LLP
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Charles Russell Speechlys LLP

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The construction industry continues to feel the savage effects of the recession, with public sector cuts likely to accentuate the existing shortage of work for contractors.

United KingdomReal Estate and Construction
Andrew Keeley
Andrew Keeley

The construction industry continues to feel the savage effects of the recession, with public sector cuts likely to accentuate the existing shortage of work for contractors. One consequence is that tender prices are still falling. From the developer's viewpoint, 2011 may present a good opportunity to take advantage of competitive tender prices in relation to both new build and refurbishment projects, if the necessary finance is available.

Suicide bidding

However, the rates of insolvency within the construction industry remain high in comparison to other economic sectors. Voluntary insolvencies leapt 20% in the first quarter of 2011. It has been widely reported that some companies have resorted to 'suicide bidding', whereby unprofitably low tender bids are submitted by contractors in order to win work. While low bids may appear superficially attractive, the likely consequence is aggressive claims for additional payment once work has commenced and/or the potential

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