Week commencing 6 June 2016

In today's bulletin

• ‘Build to Rent’ could help government reach housing targets, claim developers
• Real estate investors branching out

• Cameron delays decision on Heathrow’s third runway again
• Doubts over policy cloud growth in renewable energy industry

Property, Planning and Regeneration

‘Build to Rent’ could help government reach housing targets, claim developers

A group of developers and real estate investors have penned a letter to housing minister, Brandon Lewis MP, with a three point plan which they say could lead to 250,000 more homes to rent. The Better Renting campaign
claim that Build to Rent, an initiative where corporations build homes just for renting, could help the government deliver its housing target to build a million homes by 2020.

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House prices to slow due to ‘affordability issues’

The UK’s largest mortgage lender, Halifax, has predicted house price growth is set to slow for the remainder of the year due to ‘affordability issues’. The firm claimed that “the sustained period of higher-than-earnings house price
growth, should curb housing demand”. House price inflation in the year to May remained at 9.2%, while house prices from March-May increased 1.4%, the lowest rate since November 2015

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Lords report claims the Tees can become economic powerhouse

A report, by the Rt. Hon. Lord Heseltine, has suggested that the Tees Valley, former home of Redcar steelworks, can become a “bustling powerhouse of economic activity”. The new report, Tees Valley: Opportunity Unlimited,
proposes a new development corporation as well as plans to increase the regions tourism. The aim is to mitigate the 3,000 jobs that were lost following the steelworks closure earlier in the year.

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Mistakes of the past absent from real estate lending

While the real estate market may have peaked, the mistakes leading to 2007’s global crash are largely absent from today’s market, according to real estate services provider Savills. Regulatory reform is cited as the most positive change, contributing to 180 new lenders entering the market since 2013.
This increasingly diverse and balanced lending market has led to the market share held by UK clearing banks dropping to 34 per cent, from a peak of 70 per cent in 2008.

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Real estate investors branching out

Real estate investors in the UK are expanding their property portfolios with more complex property types, according to the latest report from Mortgages for Business. The most noticeable shift was those considering purchasing houses in multiple occupation (where tenants have their own rooms
but share living space), up to 28 per cent from just 10 per cent six months ago. Meanwhile, the total share of investors looking to expand their portfolio has dipped, from 46 per cent last November to 41 per cent.

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House price drop predicted by RICS

Average house prices are predicted to fall over the next three months, according to research conducted by the Royal Institution of Chartered Surveyors. The UK Residential Market Survey, compiled with data from estate agents, showed that a 10 per cent majority of surveyors expected
prices to fall. Surveyors cited the uncertainty caused by the EU referendum and the impact of stamp duty changes from April as the main contributory factors.

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MPs demand government takes action on flood building

A report by the House of Commons Environmental Audit Committee has found that almost 10,000 properties were built in high flood risk areas in 2013/2014 – leading to calls for the government to take action. MPs on the committee have called on the Department for Communities and Local
Government to develop a “systematic approach” to ensure that homes approved in flood risk areas were built in accordance with planning conditions.

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Transport

Cameron delays decision on Heathrow’s third runway again

A decision on a potential third runway at Heathrow will be announced “this summer”, the Prime Minister Rt. Hon. David Cameron MP has said. Leading industry figures have raised fears that the EU referendum has caused a “Whitehall logjam” of important decisions,arguing that any decisions
made on the extra runway could be postponed until the autumn. The Prime Minister has already delayed the decision for six months after ordering extra research on noise and pollution.

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Energy and environment

European ministers sign renewable energy pact

Nine energy ministers from European countries have signed a new agreement on renewable energy, promising to cooperate to reduce costs and facilitate use. The Memorandum of Understanding, which does not include the United
Kingdom, was signed in Luxembourg on 6 June. It focuses on offshore wind, with provisions designed to encourage cooperation on spatial planning, finance and technical standards.

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Ex-energy minister calls for early end to coal power

Former Conservative energy minister, the Rt. Hon. Lord Greg Barker, has called on the Government to close all coal-fired power stations by 2023, two years earlier than planned. Lord Barker is one of a number of “green Conservatives” from think tank Bright Blue who claim that the move would
not cause the lights to go out but would cut carbon emissions and air pollution. The think tank has released a report highlighting this view, which also claims that troubled nuclear project Hinkley Point C could be replaced by renewable energy if necessary.

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Doubts over policy cloud growth in renewable energy industry

A new report from the Renewable Energy Association has claimed growth in the sector is under threat from “sudden and severe” policy changes. Despite finding the UK is on track to meet the Renewable Energy Directive target
of 15 per cent renewable energy by 2020, the report stated that political uncertainty creates “high levels of uncertainty” over how and whether the target will be achieved.

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Other News

EU referendum holding the economy to ransom

A report, released 6 June, has revealed that the uncertainty generated by the EU referendum in June is causing a slowdown of the UK economy. Published by accountants and business advisers, BDO LLP, Business Trends shows that business investment is down, with UK growth expectation falling for
the tenth month in a row. The company also stated that the sharp fall in the official figures were ‘no doubt related to Brexit fears’ and claimed insecurity over Brexit had led to a drop in firms willing to hire new employees.

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