Week commencing 2 October 2017

In today's bulletin

• £10bn extra for Help to Buy
• 100,000 new homes needed each year to improve affordability

• £400m boost for northern transport infrastructure
• Data hoarding costs energy sector £4bn annually

Property, Planning and Regeneration

£10bn extra for Help to Buy

The Help to Buy Equity Loan, which makes it possible to buy a new build home with a five per cent deposit, will receive £10 billion in additional funding and enable a further 135,000 people to take advantage, the government has claimed. The Chancellor of the Exchequer, the Rt Hon Philip Hammond MP,
announced the investment on 2 October and cited the popularity of Help to Buy, which now has funding committed to continue until 2021. Since 2010, Help to Buy has facilitated the sale of over 130,000 homes across England, 81 per cent of which were purchased by first-time buyers.

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Government pledges £2bn for social rented homes

Plans for an additional £2 billion of funding for new affordable homes were set out by the Prime Minister, the Rt Hon Theresa May MP, during her speech to the Conservative Party conference on 4 October. Moving away from the government’s previous focus on affordable rent, the new funding is
aimed at delivering 25,000 new homes for social rent over the next five years. Ministers also announced that social landlords will once again be allowed to increase rents in line with the Consumer Price Index, plus an additional one per cent, for five years from 2020.

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100,000 new homes needed each year to improve affordability

The government is on track to realising its target of one million new homes by 2020 but an additional 100,000 homes are needed each year for the supply of new housing to have any effect on affordability, Savills has claimed in a new report. Published on 4 October, On track to solving the housing
crisis? argues that housing supply is almost meeting demand across most of the UK, with house-building volumes up nearly 50 per cent on three years ago. However, there remains an annual shortfall of 104,000 homes in high-demand areas, with an acute housing shortage in the south east of England.

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Student accommodation attracts global investors

More than £2.85 billion has been invested in the UK student accommodation sector so far this year, including nearly £800 million from Canada and £227 million from Singapore. Property consultancy CBRE released the figures
on 5 October, stating that there continues to be strong demand for studios and premium schemes in prime locations.

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UK house prices hit record high

The average cost of a home in the UK has reached record levels after house prices rose four per cent in the year to September. Data from Halifax’s latest House Price Index report, released on 6 October, revealed that prices had increased at the fastest pace since February, with the average cost peaking
at a new high of £225,109. Despite a fall in mortgage approvals and total house sales remaining flat, the continued price growth has been boosted by a shortage of available properties and a rise in the number of people in full-time employment.

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Housing bucks downward trend for UK construction industry

Activity in the UK construction sector fell for the first time in 13 months during September, according to data from the IHS Markit / CIPS Purchasing Mangers’ Index (PMI). Released on 3 October, the data found that house-building was the only sector to register expansion, yet overall construction growth fell
to a six-month low amid reported concerns over uncertain market conditions. New business volumes in the construction industry as a whole dropped for the third consecutive month, suggesting a shortage of new work to replace completed projects.

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Transport

£400m boost for northern transport infrastructure

The Treasury will invest £400 million in improving transport infrastructure across the north of England in the latest funding deal aimed at supporting the government’s Northern Powerhouse initiative. Approximately £300 million will be targeted at making HS2 infrastructure “future-proof” and able to integrate
with the planned Northern Powerhouse Rail and Midlands Connect services. The 2 October announcement confirmed that the remaining £100 million will be drawn from the National Productivity and Investment Fund to strengthen road networks identified as requiring improvement by local authorities.

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£80m investment in smart rail ticketing

Rail passengers will have the choice of travelling without a paper ticket by 2018 following an £80 million programme to introduce smart ticketing across England and Wales. The Secretary of State for Transport, the Rt Hon Chris
Grayling MP, announced on 5 October that all passengers will have the option of using mobile barcode ticketing or smart cards hosted on phones by the end of next year.

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Rail passenger journeys hit lowest level since 2015

Rail passenger journeys between April and June fell by 2.7 per cent to 416 million – their lowest level since 2015 – while the number of journeys made using season tickets fell to a five-year low. The latest Passenger Rail Usage
data from the Office for Rail and Road, published on 5 October, also revealed that the number of kilometres travelled by rail in London and the south east plummeted for the third quarter in succession.

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Energy and environment

Data hoarding costs energy sector £4bn annually

A potential £4 billion in annual savings is being lost because the energy sector is failing to share data, according to research released on 2 October by law firm Foot Anstey. Data in energy storage: mine, mine, mine claims that up to £70,000 is wasted per megawatt of peak capacity generated because of
unknown inefficiencies and that these could be corrected by strategically sharing information. Foot Anstey recommends better collaboration between energy asset owners, distributors and system operators as a means of more quickly identifying efficiencies and delivering savings.

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Carbon capture could unlock £160bn for UK economy

The deployment of carbon capture and storage (CCS) technology on the eastern coast of the United Kingdom could create societal and economic benefits totalling more than £160 billion, according to a report by the Global CCS Institute. Released on 5 October, Clean air – clean industry – clean
growth: how carbon capture will boost the UK economy also claims that CCS deployment would create up to 225,000 jobs on the eastern coast while capturing approximately 1,500 million tonnes of carbon dioxide.

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University partnership to drive forward battery technology

Seven UK universities will partner with industry leaders to establish the UK as the ‘go-to’ destination for battery technology, the Secretary of State for Business, Energy and Industrial Strategy, the Rt Hon Greg Clark MP, announced on 2 October. The partnership will include scientists from Imperial
College London, Oxford, Cambridge and Warwick as part of a new Faraday Battery Institute. Headquartered in Harwell, the institute will be supported by £65 million of funding from the government’s Industrial Strategy Challenge Fund.

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