Week commencing 4 July 2016

In today's bulletin

• UK construction output suffers biggest fall since 2009
• Commercial property market in danger following Brexit vote, warns Bank of England

• Network Rail commended on safety but needs to improve network performance
• National Grid reveals four possible scenarios for the future of UK energy

Property, Planning and Regeneration

UK construction output suffers biggest fall since 2009

The UK construction industry suffered its worst month for seven years in June, according to the latest Markit and CIPS Purchasing Managers’ Index. Industry output fell at the quickest pace since June 2009, from 51.2
in May to 46.0 in June. The results have been blamed on uncertainty in the sector prior to the EU referendum, with just over 80 per cent of survey responses arriving before 24 June.

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Commercial property market in danger following Brexit vote, warns Bank of England

The Bank of England has warned of a potential collapse in the commercial property market following the UK’s decision to leave the EU, providing a possible risk to the economy.
Foreign investment has previously helped account for a large proportion of commercial property bought in the UK since 2009, but investment has slowed as a result of high London property prices.

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Fall in house price growth could mark start of downturn

Annual house price growth fell from 9.2 per cent in May to 8.4 per cent in June, according to figures from mortgage lender Halifax, with growth at its lowest level since July 2015.
Howard Archer, chief UK economist at IHS Global Insight warned that “an extended and marked downturn” could now begin as a result of Brexit.

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Housing demand increases across UK apart from London

Research from online estate agents eMoov published on Friday 8 July shows that demand for homes in the UK (except in London) has increased by three per cent since the first quarter of the year. Despite demand for homes in
London dropping two per cent, the London Borough of Bexley remains the most popular place in the UK for property. Outside the capital, Bristol claims the title for the most in demand spot.

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Segro chief executive named as new BPF president

David Sleath, the chief executive of Segro plc, stepped into the role of president of the British Property Federation (BPF) on Tuesday 5 July. He takes over from Chris Taylor of Hermes Real Estate.
The BPF has also appointed Rob Noel, chief executive of Land Securities, to the position of Junior Vice President.

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New president appointed at BCO

The British Council for Offices (BCO) also welcomed a new president on Tuesday 5 July after appointing John Forrester, EMEA chief executive at Cushman & Wakefield. In a speech earlier this year setting out his
vision Mr Forrester said, “It is time to challenge ourselves and to recalibrate to ensure we continue to be at the forefront of innovation in the design and delivery of our buildings.”

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Transport

Councils bid for £60 million funding for sustainable travel

Local councils have been invited to start bidding for a share of the Department for Transport’s new £60 million Sustainable Travel Access Fund. The fund is on offer to help councils make sustainable travel to work,
education and training more accessible and is part of a wider government policy to boost walking and cycling.

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Mayor of London cracks down on air pollution

The Mayor of London, Sadiq Khan has set out his action plan for tackling London’s air pollution, which kills around 9,500 Londoners a year from long term exposure to poor quality air. Under Khan’s plan cars registered before
2005 will cost an extra £10 per day, on top of the existing £11.50 congestion charge. The Mayor of London also intends to extend the capital’s Ultra-Low Emissions Zone as part of plans.

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Network Rail commended on safety but needs to improve network performance

The Office of Rail and Road (ORR) has published its 2015-2016 report on Network Rail’s performance. The report concludes that Network Rail has experienced a good year for safety and made good progress in improving
performance by developing more reliable infrastructure. However these improvements have cost more than expected and not yet resulted in better performance for passengers.

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Energy and environment

National Grid reveals four possible scenarios for the future of UK energy

National Grid’s latest publication, Future Energy Scenarios 2016, provides a glimpse into the future of energy supply and demand in the UK. The report offers four scenarios built using data from 362 stakeholder organisations
across government, industry and academia. It incorporates the expected impact of new technologies like electric vehicles and electricity storage.

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Fracking not compatible with climate change targets unless key tests are met

New analysis from the Committee on Climate Change (CCC) has concluded that the large scale exploitation of shale gas is not compatible with the UK’s climate change targets unless key criteria are met. The report, ‘The compatibility of UK onshore petroleum with meeting the UK’s carbon
budgets’, concludes that key tests need to be met on methane leaks, gas consumption and carbon budgets if the UK is to meet its commitment to reduce emissions by at least 80 per cent by 2050.

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Government sets out electricity capacity for upcoming Capacity Market auctions

The government has announced parameters for the upcoming Capacity Market auctions, setting out how much electricity capacity it intends to buy.
Two auctions will be held, securing the UK’s electricity supply for the winters of 2017/18 and 2020/2021.

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Other News

UK services experience weak June

Growth in the UK service industry in June fell to match a 38-month low recorded in April, according to data in the latest purchasing managers’ index from Markit and CIPS. Growth in the service sector over the whole of the
second quarter is at its lowest level since February 2013, with the 12-month outlook at its weakest since December 2012 and employment figures witnessing the slowest rise since August 2013.

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