Week commencing 12 December 2016

In today's bulletin

• No New Homes Bonus for underperforming local authorities
• Heathrow’s planning application for expansion takes off

• Government gives five-year assurance on electricity needs
• Local authorities need more resources to meet housing shortages

Property, Planning and Regeneration

No New Homes Bonus for underperforming local authorities

The New Homes Bonus will not be paid to local authorities that fail to meet a new ‘national baseline’, according to the Secretary of State for Communities and Local Government, the Rt Hon Sajid Javid MP. In a statement to the House of Commons on 15 December, Mr Javid announced a number of reforms to the local government finance settlement, including a minimum baseline of 0.4 per cent housing growth to qualify for the New Homes Bonus.
The number of years for which payments are made will be reduced from six to three between 2017 and 2019. The Department for Communities and Local Government is also planning to consult on proposals to withhold funding from local authorities that it deems are planning ineffectively, as well as exclude homes built following an appeal from the figures used to calculate the New Homes Bonus.

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CIH Local authorities need more resources to meet housing shortages

Almost 90 per cent of local authorities believe that the Government will not be able to meet its target of one million new homes by 2020 unless council planning departments can access more resources, according to a report from the Federation of Master Builders and the Local Government Information Unit. Published on 13 December, the report also found that more than two-thirds
of small and medium-sized (SME) housebuilders agree with the councils’ assessment. The report concludes that more small sites need to be allocated for development and that councils and SME housebuilders need to communicate more effectively to aid the delivery of more housing. Read more

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CBRE predicts mixed outlook for UK property market in 2017

The UK property sector will remain attractive to investors despite a backdrop of continuing political and economic uncertainty, according to CBRE’s 2017 Outlook report which was released last week. CBRE argues that, although the effects of Brexit are likely to be felt in 2017, there will be a number of other factors influencing performance; for instance, a weaker currency and tighter
labour market will mean inflation becomes a much more prominent risk factor for the market. Despite a weaker outlook in some respects, the report concludes that the appetite for UK property is likely to remain strong, particularly from foreign investors.

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Average London house price doubles in a decade

House prices in the capital have grown by 98 per cent since 2006, according to new research by Halifax, released on 12 December. Combined with the growth in private housing stock by a quarter of a million properties, the data indicates that privately owned housing stock in the UK has grown to over
£5.5 trillion for the first time. London has seen the largest rise in private dwellings and the value of housing in southern England has risen two and a half times faster than in the north of the country.

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Lack of office space in South West threatens investment prospects

There is a lack of new office development across the South West of England, according to the first South West Office Market Report from commercial property consultants, Lambert Smith Hampton. Released on 15 December, the report that a lack of office space in the region claims has been
exacerbated by conversions to serve the residential and student markets, and states that the urgent building of new facilities is required to strengthen the area’s chances of attracting investment.

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House price inflation slows in October

UK house price inflation dropped to 6.9 per cent in October, down from 7 per cent in September, according to the latest UK House Price Index (HPI). The figures, released by the Office for National Statistics (ONS) on 13 December, indicate that the average value of British homes did not move from September’s figure of £217,000. However, this is still £14,000 higher than in
October 2015 annual increase in UK house prices has been led by England, where overall prices rose 7.4 per cent over the 12 months to October. However, the ONS data shows that the North East of England is the region with the lowest average house price and the lowest annual rate of growth, at just 2.7 per cent over the year.

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Transport

Heathrow’s planning application for expansion takes off

Heathrow has started work on its planning application to expand the airport with a new third runway, the airport announced on 12 December. The application is due to be submitted in 2019 once the Government has prepared its National Policy Statement on the expansion plans. Heathrow also announced that an extensive year-long consultation had already begun
with the local community and other stakeholders who will be affected by the expansion. Environmental and wildlife studies will be taking place from early 2017, while the airport has promised to incorporate local views and feedback into the designs.

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Energy and environment

Government gives five-year assurance on electricity needs

The Government has announced that it has secured Britain’s energy needs to the winter of 2020/21 after buying over 52GW of electricity capacity four years in advance through the Capacity Market Auction mechanism. The auction has also seen construction brought forward of two new gas
generation power stations in King’s Lynn and Spalding, as well as agreements granted for low-carbon battery storage. It is estimated that the auction will have an average net cost for bill payers in the long term of around £2 per year.

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Fall in household recycling in 2015

The proportion of UK household waste that was recycled in 2015 has fallen for the first time since records began in 2010, according to new data from the Department of Food and Rural Affairs. The data, released on 15 December, shows that 44.3 per cent of household waste was recycled in 2015,
down from 44.9 per cent in 2014. Although there is an EU target for the UK to recycle 50 per cent of waste generated by households by 2020, the 2015 figure is still the second highest proportion since 2010.

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Manufacturers lack confidence in Government’s energy supply management

Only four per cent of British manufacturers believe energy infrastructure has improved in the past two years, with a quarter believing it has worsened, according to a new report by manufacturers’ organisation EEF. The report, released on 12 December, also found that only a third of companies
believe that the Government has a long-term strategy to secure future electricity supply. The report calls for the Government to reinstate an annual energy statement which should set out the Government’s plans for energy policy and decarbonisation.

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