Week commencing 10 July 2017

In today's bulletin

• GLA announces funding for 50,000 affordable homes
• Housebuilders urged to expand multigenerational living offer

• UK’s global position jeopardised by inadequate airports
• Government promises £20 million for new electric vehicle tech

Property, Planning and Regeneration

GLA announces funding for 50,000 affordable homes

An extra 50,000 affordable homes could be built in the capital after the Mayor of London, Sadiq Khan, announced a £1.7 billion deal with councils and housing associations in London. Announced on 13 July, the deal is set to target 17,500 new social-rented homes for affordable rents and 32,000 for
shared ownership or at the Mayor’s new London Living Rent aimed at middle-income Londoners. As part of the deal, eight of London’s biggest housing associations have signed up to deliver a minimum of 60 per cent affordable housing on their sites.

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Calls for built environment to take opportunity of Brexit

A new strategy to tackle the impact of Brexit and deliver positives for the sector was launched on 12 July by the All Party Parliamentary Group for Excellence in the Built Environment. Building on Brexit argues for ensuring EU migrant workers are able to remain in the UK; enforcing transitional
arrangements for existing migrant workers; implementing a strategy to attract, train, and retain domestic workers; and using digital technologies to increase productivity.

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Mayor announces Good Growth by Design

A new initiative aimed at creating jobs for Londoners through redesigning and updating London’s buildings was announced by Sadiq Khan on 10 July. Speaking at the London School of Economics,
Mr Khan stated that he hopes the scheme will help to deliver the 46,000 jobs and 50,000 new homes needed in London every year, as well as stimulating greater social and economic inclusion.

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Housebuilders urged to expand multigenerational living offer

British housebuilders should tap into the growing market for multigenerational and flexible living, according to the National House Building Council (NHBC). Published on 11 July, Multigenerational Living argues that 1.8 million households are now home to more than one adult generation, driven
largely by the growing number of people aged over 25 who live with their parents. The number of households containing two or more adult generations increased by 38 per cent between 2009 and 2014, indicating a potential demand for an additional 125,000 multigenerational homes per year.

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Average growth in house prices slows

House price inflation continued to decrease in June and reached its lowest level for a year, according to the Royal Institution of Chartered Surveyors’ latest UK Residential Market Survey. This headline figure of seven per cent represents a decline on the previous month’s growth of 17 per cent and
marks the lowest growth figure since July 2016. However, this masks significant regional variations between an overall decline in London and the South East, and increases of 38 per cent in Wales, 33 per cent in the West Midlands and 28 per cent in the North West.

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UK hotel investment hits £2 billion mark

The UK hotel market had a strong start to 2017 with investment in the sector reaching £2 billion in the first six months of the year, data from Savills revealed on 12 July. The real estate advisor says it expects investment will continue to strengthen, reaching £5.1 billion by the end of the year – representing a
28 per cent increase on investment during 2016. Figures also show that London is continuing to drive the hotel investment market, with the city accounting for over half of transactions in the sector by value.

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Landlords warned of new energy efficiency regulations

Private commercial property landlords should ensure their portfolios meet new energy efficiency regulations, property consultant Lambert Smith Hampton (LSH) warned on 10 July. Taking effect from 1 April 2018, regulations on Minimum Energy Efficiency Standards (MEES) require landlords to only offer leases on properties with an energy performance certificate (EPC) rating
of E or better, or else face fines of up to £150,000. LSH argues that, with EPC assessments changing in recent years and efficiency requirements of buildings improving, properties currently rated D or E – accounting for 47 per cent of all properties – could also be at risk of fines.

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Construction product manufacturers wary

Higher input costs and greater uncertainty have contributed to a pessimistic outlook from UK construction product manufacturers, according to the Construction Products Association’s State of Trade Survey 2017 Q2 published on 10 July. The survey revealed that only seven per cent of heavy side manufacturers anticipated a rise in sales in the next quarter – down from 68
per cent in the previous quarter – despite a 17th consecutive quarter of growth in sales and activity. Meanwhile, 93 per cent of heavy side manufacturers and 100 per cent of light side manufacturers reported a sharp rise in year-on-year costs, coming from cost pressures on raw materials, fuel and energy, as well as a hike on wage bills due to skills shortages.

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Transport

UK’s global position jeopardised by inadequate airports

London’s airports will reach capacity by 2025 without further expansion, jeopardising the UK’s position as a global trading hub, according to business lobby group London First. Released on 10 July, No Time to Waste: Keeping
London’s airports connected in a post-Brexit world calls for aviation policies beyond the expansion of Heathrow, including enhancing rail access to airports and lifting caps on airport capacity.

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CEBR calls for new tech to unblock traffic jams

Technological upgrades to the UK road network could abolish traffic jams and cut motoring accidents by up to 90 per cent, the Centre for Economics & Business Research (CEBR) has argued in a report published on 10 July 2017. The Future of Road Transport proposes a formula for financing
infrastructure spending, which CEBR claims would generate approximately £30 billion annually in road usage rents. This funding would, in turn, help to counter a predicted shortfall in fuel duties created by the move away from fossil fuels and the shift towards autonomous vehicles.

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Energy and environment

Government promises £20 million for new electric vehicle tech

A £20 million investment into new technology for electric vehicles was announced by the government on 8 July. Backed by both the Department for Transport and the Department for Business, Energy and Industrial Strategy, the investment will focus on creating new technology to allow electric vehicles
to return power to people’s homes or to the grid after they have been charged. The government hopes that so-called ‘vehicle-to-grid’ technology will help to improve the country’s energy system and increase the overall number of electric vehicles on the UK’s roads.

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Electric cars could fuel a major increase in UK energy demand

The UK’s energy demands could rise significantly over the next 30 years thanks to the expected growth in electric vehicles, according to National Grid’s latest Future Energy Scenarios report. In one scenario, National Grid predicts that peak demand could increase by as much as 18GW by 2050
– a 30 per cent increase on current peak levels. However, the report also includes a number of recommendations that could reduce the overall increase to 6GW.

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