Week commencing 25 September 2017

In today's bulletin

• Average house price eight times the average wage
• Housing authorities and councils must work closer together

• International standards key to securing infrastructure investment
• Welsh Government targets 70 per cent renewable energy by 2030

Property, Planning and Regeneration

Average house price eight times the average wage

The Local Government Association (LGA) has called on the Government to allow councils additional borrowing powers to invest in new housing, as new analysis revealed average house prices in England are almost eight times the average wage. The LGA analysis found that average house prices in 2016 were 7.72 the average yearly salary, compared to 3.96 times in 2000. London was the most expensive region with house prices at almost 12 times the average
income. In its Budget submission, released on 28 September, the LGA said the restrictions were preventing local authorities from building the genuinely affordable homes the country needs. The LGA outlined a series of measures to tackle these restrictions including allowing local authorities the right to keep 100 per cent of receipts under Right to Buy.

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Northern buy-to-let markets challenging the South East

The latest LendInvest Buy-to-Let Index report has revealed upward mobility in Northern markets as prices in London and the South East supress yield. The quarterly data, published on 28 September, suggests the impact of price sensitivity in London and the South East is not being felt to the same degree elsewhere in the country, with cities such as Hull and Nottingham making
significant gains in the index – up 33 and 35 places respectively. Luton, which retained the top spot as the best buy-to-let location in Britain, has a rental yield of 4.5 per cent, capital gain of 10.29 per cent and rental price growth of 6.81 per cent. Colchester and Manchester were second and third in the buy-to-let index.

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Build-to-Rent sector nears 100,000 homes mark

According to research published on 26 September by the British Property Federation (BPF), 95,918 build-to-rent homes are now either complete, under construction or in planning across the UK. While over half of that number are in London, the sector is also growing strongly outside the capital.
Since the first quarter of 2017, the total number of build-to-rent homes has risen by 37.4 per cent, with build-to-rent developments of over 500 homes rising from 24 to 34 over the same period.

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New housing pipeline hits record levels

The number of residential units granted planning permission in Britain has risen to its highest level in over 10 years. Data published on 29 September from the latest Housing Pipeline report, compiled by Glenigan and the Home Builders Federation (HBF), has revealed that 321,982 new homes were approved in the year to June 2017, the most in any 12-month period since
figures were first compiled in 2006. Despite a slight slowdown in Q2, the year-on-year growth can be partly attributed to a rise in the number of new social housing units being approved, while the HBF has cited the Help to Buy scheme as a driver in demand from first-time buyers.

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House prices in London fall in September

London house prices have fallen year-on-year for the first time since 2009, according to Nationwide’s latest House Price Index. Published on 29 September, the index reports that prices in the capital fell by 0.6 per cent in the year to September 2017, making it the worst performing UK region for the
first time since 2005. By contrast, average prices across the UK rose by two per cent in the year to September 2017. Nationwide also found that price growth was strongest in the East Midlands, with prices up 5.1 per cent compared to this time last year.

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Housing authorities and councils must work closer together

A new research guide published by the Chartered Institute of Housing has called for a closer working relationship between housing associations and councils in an attempt to deliver new and innovative housing solutions. Launched on 25 September, the report Building Bridges examines current
tensions between local authorities and housing associations, and outlines a series of proposals to improve their existing relationship. The report underlines the importance of a cohesive working relationship between the two entities to successfully meet the country’s current housing demand.

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Councils face clampdown on investments outside their own jurisdictions

Her Majesty’s Treasury is reportedly considering plans to limit councils’ investment in commercial property out with their own area. A report released on 28 September by Estates Gazette claims that local authorities seeking additional revenue have spent £2.2 billion on commercial property since
July 2015, 22 per cent of which was extra-jurisdictional investment. The publication states that restrictions may be announced in November’s Autumn Budget.

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International standards key to securing infrastructure investment

Adopting new international measurement standards could be crucial to the Government securing much needed infrastructure investment, the Royal Institution of Chartered Surveyors (RICS) has said. In its paper Attracting Infrastructure Investment Through International Standards, published on 25 September, the body recommends the adoption of the recently-launched
International Construction Measurement Standards (ICMS) to help attract private investment in infrastructure projects and offset an expected reduction in public spending. The report asserts that signing up to the ICMS would deliver greater levels of transparency and certainty for investors as negotiations over Brexit continue.

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Energy and environment

Chancellor announces new funding for North Sea surveys

The UK’s oil and gas industry will be supported by a new £5 million government fund to support North Sea exploration, according to an announcement on 25 September by the Chancellor of the Exchequer, the Rt Hon Phillip Hammond MP. The Chancellor claimed that the money will be used by the Oil and Gas Authority (OGA) to fund new surveys into
under-explored parts of the UK Continental Shelf to locate new deposits of oil and gas. The announcement came on the same day as the Oil and Gas Technology Centre in Aberdeen revealed that it is working on new underwater technology that could add 400 million barrels of oil and gas to the North Sea’s yield, boosting the industry by as much as £3 billion.

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Dyson to launch electric vehicle by 2020

Dyson triggered a strong reaction among the renewable energy sector last week when it announced it will launch an electric vehicle by 2020. Dyson says it already has 400 staff working on the project, with £1 billion being allocated on developing the car and a further £1 billion on its battery.
Announced on 26 September, the engineering company’s move into the bourgeoning market has prompted calls from the Renewable Energy Association for government to develop a national charging strategy to incentivise electric vehicle manufacturing.

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Welsh Government targets 70 per cent renewable energy by 2030

The Welsh Government will aim to generate 70 per cent of the country’s electricity demand from renewable sources by 2030 – up from the current rate of 32 per cent. In the announcement on 28 September, Cabinet Secretary for Environment and Rural Affairs, Lesley Griffiths AM, also set the
same deadline for one gigawatt of renewable electricity to be locally owned, with an “element of local ownership” in all new projects by 2020. The announcement coincided with the same day the country’s biggest onshore wind farm, Pen y Cymoedd, officially opened in South Wales.

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Wind power could provide 30 per cent of Europe’s electricity by 2030

Projections by WindEurope show that wind energy could provide 16.5 per cent of Europe’s electricity demand by 2020 and 30 per cent of Europe’s power by 2030. WindEurope’s Outlook to 2020 and Scenarios to 2030 reports caveated these claims by noting that the milestones could only be
reached through fundamental changes to the current energy framework and by the support of governmental policies. The increase in wind energy is predicted to create an additional 569,000 jobs across Europe and would save €13.2 billion worth of fossil fuels annually.

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