Week commencing 5 October 2015

In today's bulletin

• PM pledges to reform planning rules to build affordable homes
• Planning cuts threaten economic prosperity, says RTPI

• Lord Adonis to chair National Infrastructure Commission
• Wind energy industry forges ahead in Britain

Property, Planning and Regeneration

PM pledges to reform planning rules to build affordable homes

On 7 October, David Cameron announced that he would remove planning rules that require property developers to build affordable homes for rent to stimulate the building of homes for first time buyers. In his speech to the Conservative Party Conference, David Cameron said the planning reform would be essential to help build 200,000.
new affordable ‘starter homes’ by 2020. The announcement has since been criticised by the housing charity, Shelter, claiming that only those earning more than £50,000 will be able to afford a ‘starter home’, with this figure rising to £77,000 in London.

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PM announces new Right to Buy agreement

On 7 October, the Government announced its new Right to Buy (RTB) plans. The proposals, agreed with housing associations and the National Housing Federation (NHF), are expected to extend RTB to 1.3 million more households and start in 2016.
The scheme would allow the majority of social housing tenants to purchase their rented home at a discounted rate. The Government claims that this money would be reinvested by housing associations to build further homes – boosting supply and replacing the affordable homes that would otherwise be lost.

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LGA warns Government against forcing councils to sell social housing

The Local Government Association (LGA) has predicted that the Government’s extension of RTB to housing association tenants will cost £6 billion by 2020. Published on 6 October, the LGA’s Spending Review warns that the Right to Buy offer must not be funded by forcing councils to sell off their social housing,
as this would increase rents and housing benefit bills as well as reduce councils’ capacity to build more homes and tackle waiting lists. The Association predicts that under the renewed RTB offer, 24,000 housing association tenants a year will buy their home with an average discount of £63,271.

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Planning cuts threaten economic prosperity, says RTPI

The Royal Town Planning Institute (RTPI) has warned that the threat of cuts to local planning departments poses a risk to the economy and housing delivery. In two reports, published on 6 October and covering Scotland and the North West,
the RTPI suggests that a reduction in funding for planning offices is hindering local economic recovery and that greater investment is needed to support the pace of house building.

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Savills: London is the most expensive city to live and work

London is the most expensive city in the world to live and work, according to commercial property agent, Savills. Its Live/Work Index, published on 5 October (which is calculated on the combined cost of residential and office rental per person per year),
suggests that while London is the most expensive city in the world, Hong Kong, Shanghai and Mumbai are the least affordable. London’s Live/Work costs averaged $118.425 (USD) in the first half of 2015, an increase of 20.7 per cent since the index was launched in 2008.

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House price growth eases in September

Annual house price growth eased to 8.6 per cent in the three months to September following a slight fall in house prices between August and September. Data from Halifax,
published on 6 October, showed that year-on-year house price growth slowed from 9 per cent in April to June, to 8.6 per cent in July to September. Quarterly growth also slowed from 3 per cent to 2 per cent. The average price of a UK home now stands £202,859.

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September house sales rise despite scarcity of stock

House sales picked up across the country in September to reach a 16 month high, according to the Royal Institution of Chartered Surveyors’ (RICS) UK Residential Market Survey, released on 8 October.
This is the fifth consecutive month that residential sales have increased, reflecting a rise in overall demand – with the number of UK enquiries from new buyers increasing for a sixth consecutive month. Based on its report’s findings, RICS warns that a persistent and growing disparity between supply and demand could spell trouble for the future.

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ONS reveals construction sector slowdown

Construction output fell by 4.3 per cent compared to July this year and 1.3 per cent compared to August 2014, according to the office for National Statistics’ (ONS) monthly Output in the Construction Industry report for August.
The report, published on 9 October revealed that, compared to the previous month, work in repair and maintenance (R&M) fell in August 2015 (by 3.6 per cent and 5.6 per cent respectively).

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Lord Adonis to chair National Infrastructure Commission

Lord Andrew Adonis has been appointed as the chair of the National Infrastructure Commission – a new statutory body advising the Government on infrastructure projects. Chancellor of the Exchequer,
the Rt Hon George Osborne MP, also announced at the Conservative Party Conference on 5 October that the Government will commit £5 billion of funding towards major infrastructure schemes over the course of the current parliament. su_column]

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Energy and environment

Wind energy industry forges ahead in Britain

The UK wind energy industry delivered £1.25 billion in investment to the UK economy last year, according to RenewableUK’s annual Wind Energy in the UK report. Published on 6 October, the report shows that the wind energy industry generates ten per cent of the nation’s electricity needs,
and employs 30,500 people in the UK. The report found that onshore wind power generation remains strongest in Scotland, while England is leading the offshore wind sector. One-quarter of the UK’s electricity is now derived from renewable sources.

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Wind and solar power improve cost competiveness versus fossil fuels

Bloomberg New Energy Finance’s (BNEF) Levelised Cost of Electricity Update for the second half of 2015, shows that in the UK and Germany onshore wind is now fully cost-competitive against gas and coal. Published on 5 October, the report reveals that as a result of cheaper technology and lower finance costs,
onshore wind’s global average levelised costs decreased from $85USD per megawatt-hour in the first half of the year to $83USD in the second and crystalline silicon PV solar costs fell from $129USD to $122USD. Meanwhile, costs for gas-fired and coal-fired power generation have increased

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Other News

Weakest rise in two-and-a-half years according to the latest survey results

Growth in the UK service sector slowed further in September to its lowest rate in nearly two and a half years, according to the latest Markit/CIPS figures for September, with the service sector purchasing managers index (PMI)
falling to 53.3 last month from 55.6 in August. While the PMI is above 50 and indicates growth, it is its lowest figure since April 2013 as global uncertainty and weak UK manufacturing weigh on businesses.

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Fiscal devolution plan announced by Chancellor

On 5 October, the Chancellor of the Exchequer, Rt Hon George Osborne MP, outlined his proposals for devolving greater powers from Whitehall to local government at the Conservative Party Conference.
By the end of the current Parliament, local government will retain all local taxes including £26 billion in revenue from business rates. The Government also plans to give greater flexibility for spending on local infrastructure projects to any areas that choose to have directly accountable elected city-wide mayors.

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