Week commencing 30 April 2018

In today's bulletin

• New Secretary of State at MHCLG after Rudd resignation prompts reshuffle
• Record number of planning permissions granted in 2017

• Brexit uncertainty curtails logistics industry’s optimism
• EU urged to harness floating wind power

Property, Planning and Regeneration

New Secretary of State at MHCLG after Rudd resignation prompts reshuffle

The Rt Hon James Brokenshire MP was appointed as the new Secretary of State for Housing, Communities and Local Government on 30 April, following Rt Hon Sajid Javid MP’s move to the Home Office. Mr Brokenshire is making his return to the front bench after he stepped down from his role as Northern Ireland secretary in January due to ill health.
The appointment has been welcomed across industry, with the Royal Institute of British Architects stating it hoped that the new Secretary of State would continue to drive the agenda established by his predecessor. Among other bodies to react to the news, the Royal Institute of Chartered Surveyors noted that another change at the helm of the department was unhelpful in maintaining a consistent approach to dealing with the housing crisis.

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Record number of planning permissions granted in 2017

A record 350,000 new homes were granted planning permission in 2017, according to new data from the Home Builders Federation (HBF) and Glenigan.
The latest Housing Pipeline report published on 2 May claims that housing supply is up 74 per cent in the past four years, while the 217,000 homes completed last year have put the industry on track to meet the Government’s target of delivering a million new homes in the second half of this decade. Among the main key challenges outlined in the report is to ensure that outline planning permissions can be consistently converted into implementable housing projects.

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MPs call for ban on “clearly dangerous” desktop studies

Desktop studies should not be used for safety assessments on materials used in cladding for high-rise buildings, Clive Betts MP, chair of the Housing, Communities and Local Government committee has said. In his letter of 30 April to the newly appointed Secretary of State for Housing, the Rt Hon James Brokenshire MP, Mr Betts also reiterated the committee’s view that combustible materials should be banned altogether from cladding for high-rise residential structures.
The government is currently considering a ban on desktop studies following recommendations made by Dame Judith Hackitt’s review into building regulations and fire safety, established following the Grenfell Tower tragedy.

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UK construction industry recovers from March’s wintry weather

The UK’s construction industry recovered strongly in April to rise at its fastest rate in five months, following heavy disruption experienced from snow and poor weather in March. Published on 2 May, the latest IHS Markit/CIPS UK construction purchasing managers’ index (PMI) confirmed the growth was spearheaded by residential housebuilding activity, while the industry also saw a modest expansion in overall construction output.
The PMI rose above market predictions to 52.5 points in April, up from a 20-month low of 47.0 in March, although overall demand for new work remains subdued.

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Specialist property investment up 40 per cent

Investment in specialist property in the UK grew by 40 per cent in 2017 to reach almost £18 billion, according to research by independent real estate consultancy Knight Frank. The firm’s Human Factor; Specialist Property report released on April 30 revealed that the hotel sector made the greatest contribution to the growth, with transactions up by more than £2 billion, while the private rented sector (PRS) saw an increase of around £1.3 billion.
The report makes bold predictions for the future of the PRS market, forecasting that investment activity will grow rapidly over the next five years, possibly reaching £70 billion by 2022.

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Baby boomers ‘hidden’ victims of housing crisis

Research from the National Housing Federation has revealed that over half a million people aged over 50 are now renting from private landlords compared to ten years ago. Conducted in association with YouGov and published on 30 April, the findings indicated that 1.13 million over 50s live in rented accommodation, up from 651,000 in 2008, with 12 per cent claiming to have been forced to borrow money from friends and family in the past year.
Older generations in rented accommodation are also set to have wider consequences for the public purse, with the housing benefit bill for pensioners likely to double to £16 billion by 2060 and ill-health caused by poor quality homes already costing the NHS £414 million annually.

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Lack of regulation leads to poor-quality housing

The reduction of regulatory safeguards through the extension of permitted development rights has led to a growth in low-quality housing, a new report has claimed. Commissioned by the Royal Institution of Chartered Surveyors (RICS) and released on 1 May, the research has shown that schemes developed through permitted development rights have a higher number of poor-quality homes than those constructed through full planning permission.
Although the report acknowledges the importance of delivering new housing more quickly, it suggests that the Government should reregulate the industry or introduce further safeguards.

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Tenants Fee Bill to improve rental market transparency

The exploitation of tenants by property agents has been addressed by the new Tenants Fee Bill, introduced to Parliament on 2 May 2018.
The Bill aims to eradicate unexpected letting fees, saving tenants approximately £240 million a year and guaranteeing that tenants’ deposits cannot exceed more than six weeks’ rent. The Secretary of State for Housing, Communities and Local Government, the Rt Hon James Brokenshire MP, stated that the Bill will improve fairness and transparency across the rental market.

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Brexit uncertainty curtails logistics industry’s optimism

Uncertainty caused by Brexit and ongoing economic instability are obstacles to what should otherwise be a successful year for the UK’s logistics industry, according to new report from the Freight Transport Association (FTA).
Published on 2 May, the FTA’s Logistics Report, which surveyed the opinions of more than 500 businesses, revealed grounds for optimism for the coming year among respondents following a strong performance both domestically and internationally in 2017. However, uncertainty of the political and economic post-Brexit landscape were the most immediate concerns raised for the next 12 months.

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Energy and environment

EU urged to harness floating wind power

The European Union has been urged to embrace floating offshore wind in its continuing campaign to embrace renewable energy. Speaking at the Floating Offshore Wind Turbines 2018 event, WindEurope CEO Giles Dickson claimed floating offshore wind can be complementary to traditional wind turbines and, following an extensive research and development programme, is now ready and fit for purpose.
Despite no floating offshore wind projects currently in Europe’s energy pipeline between 2021 and 2025, Mr Dickson stated that these untapped resources could have a key role to play in helping the EU to meet its 2030 climate goals.

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Other News

Local government committed to public health

Councils are having to make “difficult decisions” on vital public health services as they deal with a £600 million reduction in funding, Local Government Association (LGA) has said.
Responding on 2 May to a Pulse Magazine report which found nine out of 10 councils have been forced to cut spending on sexual health, alcohol misuse and weight management services, Chair of the LGA’s Community Wellbeing Board Councillor Izzi Seccombe claimed that the findings were “not unexpected” but that councils were “determined” to maintain vital services. Councillor Seccombe said local authorities were keen to tackle public health but called for additional resources, including for the NHS to address the current issues.

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Manufacturers call for Apprenticeship Levy reform

Britain’s manufacturers are calling for a Government summit to push through major reforms to the Apprenticeship Levy. A study released on 30 April by EEF, the manufacturers’ organisation, has shown overwhelming support for proposed policy changes to create more ‘high value’ manufacturing and engineering apprenticeships.
Its research revealed that two in five businesses believe colleges and training providers are unable to offer manufacturers with the apprenticeships they require.

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Growth of UK manufacturing slows in second quarter

Growth in the UK manufacturing sector has slowed to a 17-month low at the start of the second quarter, according to the latest data from the IHS Markit/CIPS UK Purchasing Managers’ Index. The latest survey, published on 1 May, records production, new business and employment as areas of limited expansion, reflecting a drop in new work obtained from overseas.
Growth is predicted to remain subdued in the coming months as supply chain constraints, increasing supplies of completed projects and work backlogs continue to slow the manufacturing sector.

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