Week commencing 22 August 2016

In today's bulletin

• Government to miss target of 1m new homes by 2020
• DCLG figures show increase in housing starts and completions

• Prime Minister to chair committee on airport capacity
• Alternatives to Hinkley point could save the UK £1 billion

Property, Planning and Regeneration

Government to miss target of 1m new homes by 2020

The Government will fall 266,000 houses short of its target to build one million new homes by 2020 as Brexit uncertainty leads to a slowdown among the larger housebuilding firms, new analysis commissioned by housing charity Shelter has claimed. Conducted by Capital Economics, the report Outlook for the housing market in England, calls for the Government to take advantage of
low interest rates and create a new “Growing Investment Fund” to boost funding for homes and infrastructure. It also calls for new measures to allow the Government to directly commission small and medium size housebuilders, improved transparency on land sales and greater powers for local communities to force land owners to free up space for new homes.

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DCLG figures show increase in housing starts and completions

Housebuilding starts were estimated at 36,400 between April and June 2016 – up two per cent on the previous quarter, and six per cent year-on-year – according to the latest Housing Statistical Release, compiled by the Department for Communities and Local Government (DCLG). The report, released on 25 August, also states that completions are up seven per cent on
Q1 2016, but down two per cent year-on-year, at 34,920. Of these starts, those from private-sector developers are up 4 per cent on the previous quarter. For housing association, starts were down six percent on Q1, but completions were up by 29 per cent.

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UK house prices to fall next year then rise in 2018

New analysis from Countrywide predicts that UK house price growth will slow during the remainder of 2016, before falling in 2017 and rising again in 2018. The analysis factors in the predicted impact of Brexit on the UK housing market. Countrywide estimates that prices will fall by one per cent next
year, before recovering with two per cent growth in 2018. The prime central London market is expected to be most severely hit, with prices expected to fall six per cent in 2016, and not to return to growth until 2018.

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July sees stable lending results

Gross mortgage lending stood at around £21.4 billion in July, just shy of the £21.5 billion recorded in June and only one per cent lower than July 2015, according to figures released by the Council of Mortgage Lenders (CML) on 25 August. The CML’s chief economist, Bob Pannell, said that the
“subdued” nature of property transactions and lending in July were consistent with trends in activity after Britain’s vote to leave the EU, but expected there to be a rebound of sorts following recent interest rate cuts.

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July property transaction statistics published

HM Revenue and Customs has published the UK property transaction statistics for July 2016. These estimates are published monthly and predict how many property transactions took place in the preceding month, based on figures from HMRC and the Scottish Government.
In July 2016 it is estimated that 94,550 residential and 9,820 non-residential transactions took place. This constitutes a fall of 0.9 per cent between June 2016 and July 2016, which could reflect the impact of June’s Brexit vote.

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New CBRE logistics index shows strong performance for warehousing property

CBRE, the commercial real estate company, has published a benchmark index tracking the investment performance of modern logistics stock across the UK. This index, published on 24 August, revealed a total return of 4.4 per cent for UK logistics property in the first half of 2016.
Despite falling 4.5 per cent on results for the second half of 2015, the sector outperformed UK property as a whole (3 per cent return) and the wider industrials sector (3.6 per cent return).

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London Mayor begins recruiting ‘Homes for Londoners’ team

London Mayor Sadiq Khan has started recruiting experts to join his ‘Homes for Londoners’ team at City Hall. This team will have oversight of housebuilding in the city, and will focus on the production of new and affordable homes. At this stage financial surveyors and property consultant experts are being sought to scrutinise the details around how many affordable housing units new developments will include. Sadiq Khan will also head a ‘Homes for
Londoners’ board, which will oversee housing investment and project delivery. The board will include four London Councils nominees, the Executive Director (Housing and Land) of the GLA, the TfL Commissioner, the Chair of the G15 (representing London’s 15 largest housing associations) and two representatives of the London residential property sector.

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Prime Minister to chair committee on airport capacity

The London Evening Standard reported on 24 August that the Rt Hon Theresa May MP will chair the Economic Affairs (Airports) sub-Committee. A new membership for the committee is to be announced shortly. According to the Evening Standard, the Prime Minister is aiming to decide on a third runway at Heathrow Airport by October after reviewing all the evidence.
It is suggested that the Rt Hon Greg Clark MP, new Secretary of State for Business, Energy and Industrial Strategy, and Communities Secretary and Sajid Javid, new Secretary of State for Communities and Local Government could be among those from the old committee who might continue to have a seat at the table.

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Concern over lack of vision for transport sector

The Chartered Institute of Highways and Transport (CIHT) has published Uncertainty ahead: which way forward for transport, a new report into views of institute members towards future insecurity in the sector. The report, written by Professor Glenn Lyons of the University of the West of England,
highlights particular fears over inertia and an overall lack of strategic vision in the sector. It concludes with a series of recommendations for the CIHT, transport professionals and key external stakeholders.

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Energy and environment

Alternatives to Hinkley point could save the UK £1 billion

A new nuclear power station at Hinkley Point is “not essential” to the UK’s future energy mix according to a new report published by the Energy and Climate Change Unit (ECIU). The report: Hinkley: What If? found that the UK could save around £1 billion per year using a mixture of tried and tested technologies such as wind farms and gas-fired power stations, as well as
connecting the grid to other countries. Following the report’s publication, Richard Black, director of the ECIU, commented that “Britain could meet all its targets and do so at lower cost” without constructing the proposed Hinkley Point nuclear power station.

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