Week commencing 3 January 2017

In today's bulletin

• Government confirms starter homes on brownfield sites
• Central London office investment reached almost £17 billion during 2016
• Call for upgrades to rail network as demand forecast to double by 2040s

• Investment in UK wind farms to fall over next three years
• Service sector experiences rapid growth

Property, Planning and Regeneration

Government confirms starter homes on brownfield sites

Plans for starter homes on brownfield sites are set to go ahead in 30 local authority areas, with construction expected to begin in some places later this year. Linked to the £1.2 billion Starter Homes Land Fund, the homes will be sold at a discount of at least 20 per cent below market value and will be
reserved for first-time buyers between 23 and 40 years old. It was announced on 3 January that the chosen areas have been selected because of the potential for early delivery, but more sites are expected to join the scheme at a later date

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Affordable homes scheme expanded with additional cash

In addition to greater provision for starter homes, on 5 January the government also announced that an extra £1.4 billion has been allocated to encourage the building of 40,000 new affordable homes.
Housing providers are able to apply for a share of the fund which now totals £7 billion and is designed to increase the availability of affordable housing across the country.

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Garden villages given go-ahead

Plans for 14 new “garden villages” across the country, which could deliver more than 48,000 homes, have been backed by the government. Six million pounds of funding has been allocated for the projects, which will take place at sites from Cornwall to Carlisle. The number of homes in each village
will range between 1,500 and 10,000, with settlements of over 10,000 homes classed as garden towns. The government is currently considering whether to seek further expressions of interest for additional garden villages in 2017.

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Charity calls on CofE to give up land for affordable housing

The Church of England is being encouraged by a national charity to release unused land and buildings for the development of affordable housing. According to Housing Justice, which operates a network of homeless
shelters, it is seeing a growing trend for Christian denominations to sell or donate unused land to developers and housing associations.

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Central London office investment reached almost £17 billion during 2016

International real estate advisor Savills has reported that central London’s office investment market saw more than £16.8 billion of turnover during 2016. Despite figures being 15 per cent down on 2015 (one of the strongest years on record) 2016 remained 20 per cent ahead of the long-term average.
Savills attributed a significant portion of the activity to overseas investors, including approximately £4.5 billion from Asia with weaker sterling proving an attractive investment prospect.

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UK Construction hits 11-month high for new orders

On 4 January Markit/CIPS UK Construction PMI announced the fastest rise in new order volumes since 2016, highlighting a positive end to the year for UK construction. Strengthened demand resulted in an upturn in business activity in December in addition to sustained job creation. Residential building activity continues to be the best performing sub-category while work on civil
engineering projects also showed robust growth. While the construction sector continued to experience intense cost pressures as suppliers pass on higher imported raw material costs, a number of construction firms voiced optimism that strong order books would help alleviate Brexit-related turbulence in 2017.

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Planning permissions highest since 2006 – but restrictions continue to slow build times

A 3 January report from the Home Builders Federation (HBF) claims builders are being denied access to sites due to authorities imposing spurious conditions. The report suggests that while 289,011 permissions were granted in the 12 months to September 2016 – the highest in a decade – builders continue to face restricted site access due to lengthy pre-commencement conditions.
Stewart Baseley, Executive Chairman of the HBF, said; “It is encouraging that so many headline planning permissions are being granted but we simply have to find a way to unblock the system and reduce the time it takes to get a permission to the stage where builders can actually start building.”

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South east to trial new infrastructure scheme

A pilot scheme to speed up house building was launched in the south east of England on 4 January. It will target building projects hampered by wider infrastructure problems associated with water, electricity and road
connectivity. If successful, the programme will be rolled out across the rest of the country later this year.

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Transport

Call for upgrades to rail network as demand forecast to double by 2040s

The Institution of Mechanical Engineers and TRL has published a report (4 January) outlining recommendations to tackle rail demand, which is set to double again by the 2040s.
Recommendations include greater investment in new railway infrastructure, increasing the frequency of train services and relieving bottlenecks with flyovers and shorter signalling sections.

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Treasury Committee chair questions value of HS2

The Rt Hon. Andrew Tyrie MP, Chairman of the Treasury Committee has written to Transport Secretary, the Rt Hon. Chris Grayling MP, to clarify the economic case for HS2.
In the letter he queries the project’s benefit to cost ratio and value for money in the wake of passenger demand growth forecasts.

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Energy and environment

Investment in UK renewables to fall over the next three years

The latest analysis from the thinktank, Green Alliance has found that investment in wind, solar, biomass and energy-from-waste projects could fall by up to 95 per cent by 2020. This has the potential to seriously jeopardise
the UK’s ability to meet emissions targets set out in last year’s Paris Agreement. Investment has already fallen by over £1 billion in the last six month due a shrinking pipeline of major infrastructure projects.

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Ministers recognise need for post Brexit environmental protections

The Environmental Audit Committee has called for the government to introduce a new Environmental Protections Act during the Article 50 negotiations. Chair of the Environmental Audit Committee, Mary Creagh MP, said: “Changes from Brexit could put our countryside, farming and wildlife
at risk. Protections for Britain’s wildlife and special places currently guaranteed under European law could end up as ‘zombie legislation’ even with the Great Repeal Bill.”

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Wind power generates more than coal for first time in the UK

The UK generated more electricity in 2016 from windfarms than coal-fired power plants for the first time, the latest estimates from Carbon Brief show (6 January).
The figures reveal that electricity generated by burning coal accounted for 9.2 per cent of the UK’s total energy market in 2016 – down from 22.6 per cent in 2015.

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Other News

Service sector experiences rapid growth

In December, UK service sector activity grew at its fastest rate in 17 months, according to the Markit/CIPS Purchasing Managers’ Index, released 5 January. The rate of activity expansion sped up for the third month in a row with new
business increases helping to account for the sharpest rise in figures since July 2015. Pressure from price inflation within the sector continued to be significant and prices charged rose by the highest rate in 68 months. su_column]

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