Week commencing 3 May 2016

In today's bulletin

• Government rejects Lords’ amendments to Housing Bill
• UK’s appeal increases for global infrastructure investment

• New report calls on Government to decide on South-East airport expansion
• New reforms to secure UK energy supply

Property, Planning and Regeneration

Government rejects Lords’ amendments to Housing Bill

The Government has again either rejected or revised each of the House of Lords’ amendments to the Housing Bill, including a proposal to give councils greater control over whether to prioritise the construction of Starter Homes over other types of affordable housing. The House of Commons is due to
vote on the Government’s rejection of the amendments today, 9 May. If MPs vote to reject the changes to the Bill then it will return to the Lords. The Bill has been put forward under the rules of ‘English votes for English Laws’, giving the Conservative Party a majority of more than 100 MPs on the vote.

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International businesses postpone investment in Britain due to Brexit fears

Uncertainty around Brexit is creating unease with short term economic investment in the UK property sector, according to the Royal Institute of Chartered Surveyors (RICS). In its report EU Referendum – Impacts for Land, Property and Construction released on 3 May, RICS found that 43 per cent of survey respondents felt that Brexit would impact negatively on the
commercial property sector despite long term predictions for continued steady growth. In the last three months, just five per cent of RICS members surveyed reported increased interest from overseas companies in UK commercial property, a drop from 36 per cent in the second quarter of 2015.

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Construction output growth slows to three-year low

Construction output slowed in April to its weakest rate of growth since June 2013, falling 2.4 points on the previous month’s barometer to reach 52.0, above the critical 50.0 no-change threshold. The latest Markit / CIPS UK Construction Purchasing Managers’ Index (PMI) shows that new business volumes stagnated during the month, with construction companies
pointing to uncertainty among clients about the economic outlook and a general reluctance to invest in new projects. Commercial work was the strongest sector, while civil engineering work grew at its weakest pace during 2016 so far.

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UK’s appeal increases for global infrastructure investment

The UK has been named the ninth most attractive market worldwide for infrastructure investment. The Global Infrastructure Index 2016, released on 3 May and authored by the global design and consultancy firm Arcadis shows that the UK is the fastest-growing of 41 countries and has climbed four places
since 2012 when it was ranked 13th. The report argues that the Government’s commitment to infrastructure – notably schemes such as HS2, Crossrail and HS3 – as well as the relatively low-risk and stable UK business environment, has contributed to a growth in private infrastructure investment.

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Rents continue to rise despite new Stamp Duty fees

Increased Stamp Duty rates on buy-to-let homes have failed to destabilise the market according to HomeLet’s first Retail Index to be published since the changes came into effect. Rents on new tenancies have continued to grow steadily in the three months to the end of April, with rents outside of
London over five per cent higher than in the same period last year. The index, published on 5 May, suggested that rents are rising faster in Scotland than in any other part of the country; only the north west of England saw rents fall during this period.

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CBRE figures show strong investment in UK offices

Global investment in the UK office market remained strong in the first quarter of 2016, according to real estate advisor CBRE. The company released figures on 4 May revealing that £3.5 billion was invested during the course of the quarter, which is similar to the first quarter of 2015, but marks a 14 per cent
drop on the strong performance which closed 2015. CBRE expects global investment in Britain’s office market to decrease during the second quarter of 2016 in the run-up to the EU referendum, but predicts that the market will pick up if voters choose to remain.

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Top RTPI award goes to Plymouth City Council

Plymouth City Council’s ‘Plan for Homes’ has been awarded the Silver Jubilee Cup by the Royal Town Planning Institute (RTPI). The Council was awarded the prestigious planning award in recognition of the scale and ambition of its plans to deliver 5,000 new homes in partnership with the private sector
and institutional investors on council-owned land. The Plan also won the Excellence in Planning to Deliver Housing category, while the Council was recognised as the RTPI’s Local Authority Planning Team of the Year.

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Transport

New report calls on Government to decide on South-East airport expansion

The opportunity to finally make a decision on airport expansion in the South East has been “squandered”, according to a report by the House of Commons Transport Committee published on 4 May. Airport expansion in the South East reports widespread agreement that additional airport capacity in the South
East is essential if the UK is to remain economically competitive. The report concludes by urging the government to end “years of political dithering” and make a decision.

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The future is here – self driving cars on the streets of London next year

London will be the testing area for self driving vehicles in 2017, Volvo announced on 4 May. The Swedish car manufacturer claims that its autonomous driving technology will reduce everything from accidents, to congestion, to air pollution. The company’s president Håkan Samuelsson
described self driving vehicles as “a leap forward in car safety” and expects up to 100 self driving cars on the streets of London by 2018 as part of the ‘Drive Me London’ project.

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Energy and environment

Conservative MPs rally PM to accept carbon targets

Conservative backbenchers are calling for “early and full acceptance” of the UK’s fifth carbon budget. Twenty Conservative MPs have written to the Prime Minister, the Rt Hon David Cameron MP, asking that he accepts the recommendations – chief among them a 57 per cent fall in emissions below 1990 levels by 2032 – as soon as possible. The twenty backbenchers told Mr
Cameron that his early acceptance would give investors and Government the confidence to act decisively and take early action. The budget must be approved by the end of June, but last week’s local elections alongside the Brexit debate have hitherto made Mr Cameron loathe to make a decision on the recommendations.

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New reforms to secure UK energy supply

A series of reforms to guarantee the UK’s future energy security will include buying more electricity earlier; penalising firms which renege on their Capacity Market (CM) agreements more severely; and bringing forward the first CM delivery year to 2017/18. The reforms to the CM – the UK’s main tool for ensuring security of electricity supply – were confirmed by the
Government on 6 May following a consultation of the industry and investors launched in March this year. The DECC will now put together Draft Regulations – based on the consultation’s recommendations – to be laid before Parliament.

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Gas storage is ‘vital’ to the UK’s energy security

The Government has been urged to recognise the benefits of gas storage in delivering energy security in a report published on 4 May by the Energy and Utilities Alliance Gas Storage Operators Group (GSOG). Gas Storage: Securing the future of the UK energy market suggests that gas is the “single and most important fuel in the UK’s energy mix” and maintaining gas levels protects
consumers from increasing prices at times of supply and demand shocks. GSOG calls on the Government to ensure the continuing viability of gas storage through direct subsidies to “top up’” revenues, or through a reduction in business rates which would reduce the costs borne by storage owners.

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