Week commencing 31 July 2017

In today's bulletin

• Help for local authorities to release land for housing
• UK care home shortfall set to double within a decade

• Network Rail targets private sector investment with reforms
• Utilities urged to adapt to energy transition

Property, Planning and Regeneration

Help for local authorities to release land for housing

A £54 million funding packing is being made available to help councils remediate land and invest in small-scale infrastructure so that more sites can be brought forward to provide new housing. A new cross-government partnership between the Department for Communities and Local Government (DCLG), the Cabinet Office and the Local Government
Association’s One Public Estate is hoping the funding will make better and more efficient use of publicly owned property. Announced on 1 August, the DCLG’s ‘Land Release Fund’ will provide £45 million, while £9 million will be contributed directly by One Public Estate.

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July shows weak construction growth

Another slowdown was recorded in the construction sector in July, as companies struggled with lower volumes of commercial building and housing activity. Figures from IHS Markit and the Chartered Institute of Procurement and Supply (CIPS), released on 2 August, showed that July was the weakest
month for construction since August 2016, with the latest Purchasing Managers Index (PMI) falling from 53.8 to 51.9 (where 50 represents no change). A contraction in new business played a role in the sector’s weak figures, with the decline in new orders leading to a slow-down in job creation.

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£65m infrastructure loan for London Build to Rent scheme

The UK’s largest Build to Rent development in Brent, London, will receive a £65 million loan from the government’s Home Building Fund to help deliver infrastructure for the 7,600 home scheme. Developer Quintain will match-fund the investment at the Wembley Park site, which is set to provide
at least 6,800 privately rented homes over the next seven years. Minister of State for Housing and Planning, Alok Sharma MP, announced the investment on 3 August as part of a government commitment to improving the private rental market, which is expected to grow to £70 billion by 2022.

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House price growth remains steady

House prices increased by 2.9 per cent in the 12 months to July, only slightly lower than the 3.1 per cent increase reported in June, according to the latest House Price Index data from Nationwide released on 1 August. Despite signs of a cooling housing market and relatively low levels of new buyer enquiries, a lack of homes coming onto the market kept annual house price growth to
only just below the 3-6 per cent range that has been the norm for the past two years. These trends are set to continue for the foreseeable future, with the Index projecting a rise in prices of approximately 2 per cent overall during 2017.

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UK care home shortfall set to double within a decade

Care homes in the UK will need to double the number of available places within the next ten years to overcome the current shortfall. A report published on 2 August by property services company JLL has revealed that, although 7,000 new beds have been provided per year since 2002, the figure will need to rise to around 14,000 every year by 2028 due to a growth in demand and a
high rate of care home closures. New care developments are also needed to help meet improving living standards, with over three quarters of beds in Britain built before the most recent quality standards were introduced in 2002.

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Transport

Network Rail targets private sector investment with reforms

Network Rail has announced extensive reforms to its procurement procedures that will open up opportunities for private investment in railway infrastructure projects. Announced by chief executive Mark Carne on 31 July, the new funding and project delivery models have been put in place to boost competition and encourage innovation following recommendations outlined
in June’s review of the operator by former government advisor Peter Hansford. The reforms include regular publication of a third party project opportunities pipeline, while contractors adopting innovative technology that save Network Rail money will be allowed to take a share of the financial rewards.

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New regional road investment announced

Nineteen local highway authorities across England have been awarded a total of £75 million in funding by the Department for Transport to support regional road networks and boost economic growth. Announced on 1 August, the projects that were awarded a share of the funding include bridge
refurbishments, flood defence measures, junction improvements and resurfacing work aimed at making road journeys easier and supporting local businesses.

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Highways England publishes new Air Quality Strategy

Highways England has outlined how it will invest the £100 million government funding it has been allocated to improve air quality through to 2021. The agency’s Air Quality Strategy, released on 2 August, focuses on innovation and the ways in which new technology can reduce the number of deaths in
the UK linked to air pollution each year. Among the measures outlined in the report, Highways England has said it is exploring the possibility of covering certain roads in “canopy-style tunnels” in an attempt to cut pollution levels in built up areas.

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External organisation to investigate complaints against train companies

An independent ombudsman will be introduced to handle directly customer complaints made against train companies, the Rail Delivery Group (RDG) announced on 4 August. The rail industry body states that the service is intended to improve customer confidence, with the ombudsman having the
power to force train companies to take immediate action if failings are identified. The group’s proposals have the backing of the Department for Transport, the Office of Rail and Road, Transport Focus and London TravelWatch.

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Energy and environment

Utilities urged to adapt to energy transition

The UK energy system is transforming more now than at any point since the industrial revolution, a new report by Forum for the Future has warned. Authored by a group of six former energy leaders, ‘Wise Minds: The energy transition and large utilities’ contends that the UK’s utility firms must adapt more quickly to energy transition if they want to survive, noting that the ‘Big
Six’ suppliers have seen their market share fall from 99 per cent to 85 per cent since 2008. Published on 3 August, the report includes contributions from ex-SSE chief Ian Marchant, former RWE boss Volker Beckers and the previous National Grid CEO Steve Holliday.

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Other News

Bank of England cuts growth forecast

The UK’s growth forecast for 2017 has been cut to 1.7 per cent, down from its previous projection of 1.9 per cent in May, in the Bank of England’s quarterly Inflation Report. Released on 3 August, the bank warns that wages will continue to be squeezed in the short-term, with governor Mark Carney
citing Brexit as the key reason for ongoing uncertainty. Inflation, which was 2.6 per cent in June, is expected to rise to 3 per cent in October, before decreasing again in 2018.

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