Week commencing 28 October 2019

In today's bulletin

• Latest round of HIF funding allocated
• Rethink needed on urban transport cost-benefit analyses, says NIC

• New builds failing to meet highest energy efficiency standards, figures show
• Commons committee declares business rates system ‘broken’

Property, Planning and Regeneration

Latest round of HIF funding allocated

On 1 November, the Treasury announced a £250 million investment from the Housing Infrastructure Fund, to be allocated to successful bids from six county councils. The funding will help to deliver roads, schools, public transport and utilities, as well as unlocking a large number of new homes.
Winning bids include A-road improvements in Kent and Oxfordshire, a new school in Rutland and brownfield regeneration in Surrey.

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ONS data shows decline in new build starts

New build housing starts fell across the UK between April and June 2019, the latest data from the Office for National Statistics reveals. Published on 29 October, the data shows the decline was most dramatic in Northern Ireland, where new starts were down 30 per cent compared with the same period in 2018.
The outlook was similarly pessimistic in England and Wales, where construction work was down by ten and seven per cent respectively, while the number of new completions was up by 11 per cent compared to Q2 2018.

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Reports from letting and estate agents reveal resilience of first-time buyers

A report from National Association of Estate Agents Propertymark (the estate agency body) shows sales to first-time buyers have increased – possibly due to lower stamp duty on lower-priced properties.
This report and one produced by related organisation Association of Residential Letting Agents Propertymark (the letting agents’ body) evidences a fall in PRS (private rental sector) demand and supply with ARLA’s report also highlighting increasing rent hikes.

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Brexit drives down perceptions in UK commercial property market

This quarter’s RICS UK Commercial Property Market Survey sees the most pessimistic outlook on the overall market since the survey began in 2015. Occupier market demand has fallen with the retail sector continuing to experience severe decline.
The industrial space sector was more positive though, showing a rise in demand with rent rises expected. Despite perceptions, capital value expectations for commercial real estate are still positive in many parts of the country.

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Political jitters to blame for reduction in hiring rates

The Federation of Master Builders’ (FMB) State of Trade Survey for Q3 2019 reveals that employment levels for SME companies have fallen for the second quarter in a row, with employers blaming continued political uncertainty.
Coupled with wage inflation driven by skills shortages, this is leaving firms with unsustainable profit margins. The FMB has called on the Government to consider carefully new regulations such as Reverse Charge VAT that will further restrict the sector.

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Transport

Rethink needed on urban transport cost-benefit analyses

The National Infrastructure Commission (NIC) has called for a rethink of the way cost-benefit analyses are undertaken for urban transport projects. In a paper published on 29 October, NIC examines how current methods of appraising and modelling can distort decision-making and reduce the number of projects considered.
It proposes looking at changes in employment and population density as a better measure of different projects’ benefits.

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Councils could be given a five year funding settlement for roads

In its response to a Transport Select Committee report on 14 October, the Department for Transport indicated that councils could be given a five year funding settlement in next year’s spending review.
The response argued the settlement would be designed to address any road maintenance backlog and allow long-term planning for future works.

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Bristol City Council to consider radical Clean Air Zone

Bristol City Council will debate on 5 November whether to introduce a small area diesel ban for all privately-owned vehicles and a charging zone for non-compliant commercial vehicles. To date, 13 towns and cities have implemented Low Emissions Zones (LEZs).
However, unlike London’s scheme, the proposals for Bristol would see a total ban on diesel vehicles between 07:00 and 15:00 that would include buses and taxis. If passed, the deadline for these proposals to be implemented is March 2021.

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Energy and Environment

New builds failing to meet highest energy efficiency standards

Data from the Ministry of Housing, Communities and Local Government show that only one per cent of new homes are being built to the highest energy efficiency standard, EPC (Energy Performance Certificate) A.
Emissions from homes, both existing properties and new builds, will need to be cut significantly in order to meet the UK’s target of net zero emissions by 2050.

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Environment Bill halted by election

The Government’s Environment Bill was set to move to committee stage next month, having passed through its second reading on 28 October despite fierce scrutiny in the Commons. However, owing to the inability of a Parliament to bind its successor, it now falls and will have to be reintroduced – something Environment Secretary Theresa Villiers has promised to do as early as possible after the election.
The bill set out the UK’s targets, plans and policies for improving the natural environment, including the establishment of an independent Office for Environmental Protection, which would oversee the Government’s commitment to reach net zero emissions by 2050.

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Vision for UK’s cutting-edge offshore wind sector

The UK will need offshore wind to reach its legally binding net zero carbon emissions target by 2050 and Scotland to fulfil commitment for 2045, says a joint report by renewable energy trade associations RenewableUK and Scottish Renewables.
The industry estimates that floating wind can support 17,000 UK jobs by 2050, particularly in coastal communities, adding £33.6bn to the economy. It suggests the UK is in a unique position to export floating wind worldwide – a market that is expected to be worth at least £230m a year by 2031 to UK exporters.

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Other News

Business rates system ‘broken’

The Treasury Select Committee last week declared the business rates system of taxation ‘unfair’ and ‘broken’ in a report published on 31 October. Impact of Business Rates on Business found that the revenue generated by business rates is outpacing inflation and disproportionately impacts certain sectors, most notably those reliant on having a physical presence like struggling high street retailers.
The Committee called on Government to assess alternatives to the system in time for the Chancellor’s Spring Statement in 2020. The report has been welcomed in the industry, including by the British Property Federation, which stated that the current system has a negative effect on business and investment.

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