Week commencing 6 August 2018

In today's bulletin

• Debate over Green Belt continues following latest CPRE report
• Modest house price growth in July

• Department for Transport aims to boost SMEs
• Government should back ‘mini’ nuclear reactors

Property, Planning and Regeneration

Debate over Green Belt continues following latest CPRE report

The Campaign to Protect Rural England (CPRE) has claimed there are currently 460,000 homes planned on land in the Green Belt in its annual ‘State of the Green Belt’ report, adding that 72 per cent of homes built on greenfield sites are unaffordable, with this number due to rise.
The CPRE’s figures have been met with scepticism by some, who point out that this figure has been reached by looking at housing sites in local plans, rather than those that have been brought forward by applicants. One critic of the report, the Institute of Economic Affairs, has called for the release of Green Belt land that is not environmentally significant to help increase the number of homes available to first-time buyers.

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Modest house price growth in July

Annual house price growth rose to 2.5 per cent in July, picking up slightly from 2 per cent in June. Released on 6 August, Nationwide’s ‘House Price Index’ also revealed a monthly rise of 0.6 per cent, taking the average house price in the UK to £217,010.
These modest rises show little change in demand and supply in the market and suggest that house price growth for the rest of the year will continue to drag. Nationwide also commented that the recent Bank of England interest rates hike would only have a modest impact on households.

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Construction bounces back in Q2

The construction industry has shown signs it might be recovering from the impact of the Carillion collapse and bad weather that plagued it in the first quarter of the year. Figures from the Construction Products Association’s ‘Construction Trade Survey for 2018 Q2’ showed a return to growth for 20 per cent of heavy-side product manufacturers and 6 per cent for civil engineering firms.
Based on new data, it’s anticipated that the industry will continue to rebound in the coming quarters supported by private housing, public housing and infrastructure.

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New landlord instructions fall for ninth consecutive quarter

The number of new landlords instructing agents has fallen for the ninth consecutive quarter in the wake of tax changes in the Buy to Let market.
The drop is at least to some extent evident in all parts of the country, according to the Royal Institution of Chartered Surveyors (RICS) ‘UK Residential Market Survey’ for July 2018, as smaller-scale landlords exit the sector. However, the RICS survey anticipates that the rental sector will strengthen, with national growth of up to two per cent predicted in the market over the next year.

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Transport

Department for Transport aims to boost SMEs

One third of all procurement spending by the Department for Transport (DfT) will be allocated for small and medium-sized enterprises (SMEs), it was announced on 6 August.
The Government hopes that its ‘SME Action Plan’ will help encourage SMEs to bid for contracts, and will make the bidding fairer when competing with larger corporations. DfT also announced the awarding of £700,000 in Transport Technology Research Innovation Grants to support innovative projects to improve transport across the sector.

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Railway Customs Areas key to coping with post-Brexit rail freight congestion

The creation of Railway Customs Areas (RCAs) has been proposed by the Rail Delivery Group – the group of companies that run Britain’s railways – as a solution for the rail freight industry ahead of new customs declarations expected in the aftermath of Brexit.
The group says that RCAs – customs security measures at existing rail freight terminals – would avoid congestion caused by single border checkpoints and have the potential to reduce delays to manufacturing supply chains following Britain’s exit from the European Union.

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The untapped potential of the Thames

The London Assembly Transport Committee has said the River Thames has the potential to relieve pressure on London’s transport infrastructure. In a letter to the Mayor of London on 7 August, the Transport Committee said more should be done to increase use of the Thames River Bus, including through the appointment of a River Ambassador.
Currently, regular and commuter journeys made on the River Bus only account for between 20 and 30 per cent of total passenger journeys along the Thames. The Port of London Authority (PLA) and the Mayor have committed to a target of doubling passenger journeys on the Thames, with Transport for London aiming for 12 million journeys by 2023.

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Energy and environment

Government should back ‘mini’ nuclear reactors

Developers of mini nuclear power stations should be provided with subsidies to de-risk the sector and accelerate delivery of small modular reactors, an independent group convened by the Government has found.
The Expert Finance Working Group published its recommendations on 7 August, stating that subsidies could bring forward existing and new manufacturing capability for small reactor projects in the UK, much as they did for the offshore wind market. Small modular reactors are defined as those having a capacity less than 600MW, with development costs ranging from £100 million to £2.3 billion.

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Government must upgrade the electricity supply to new homes, says REA

The Renewable Energy Association (REA) has urged the Government to upgrade electricity supply to new homes to a three-phase installation.
Published on 8 August, ‘The feasibility, costs and benefits of three phase power supplies in new homes’ argues that three phase installation – which allows homes to connect to three phases of electricity supply and split the use of different appliances across these – would encourage greater adoption of solar, renewable heat and electrical vehicle charging.

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Policy changes required to accelerate renewable energy deployment

The International Renewable Energy Agency (IRENA) has recommended four policy changes to foster renewable energy innovations and accelerate a transition to a sustainable energy system.
In its annual Global Innovation Index, titled ‘Energizing the World with Innovation’, the organisation stated that current policy should foster a system wide approach to innovation; strengthen international cooperation; advance power system integration; and support a portfolio of technology options to electrify and decarbonise end-use.

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Other News

Firms remain optimistic despite services shrink

The UK’s services sector has shrunk for the first time since February 2010, according to the latest ‘Business Trends Report’ from accountants and business advisors BDO LLP. Output for the sector, measured by the organisation’s Output Index, plummeted to 94.73 in July from 97.29 in the previous month, while overall UK business output reached its lowest point for six years at 95.34.
Despite this, firms remain optimistic and BDO’s Optimism Index shows a rise in confidence likely due to increased employment figures and recent encouraging news for future UK and US trade

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