6 INDUSTRY NEWS
Government proposes restrictions on new leaseholds
Proposals suggest the majority of new build houses should be sold as freehold, with new leases capped at £10.
While leasehold generally applies to flats with shared spaces, a number of developers have increasingly been selling houses on these terms, which places additional finan- cial burdens on buyers through surcharges such as ground rent.
Communities Secretary James Brokenshire has launched a consultation on such plans to improve the leaseholder sector for prospective homeowners. Brokenshire explained: “Unfair ground rents can turn a homeowner’s dream into a nightmare by hitting them in the back pocket, and making their property harder to sell.
He added: “That’s why I’m taking concrete action to protect homeowners and end unscrupulous leasehold practices that can cost tenants hundreds of pounds.”
Fund is professed to allow councils to bid for up to £750,000 each to boost their housing and planning teams. This could include hiring new staff to lead council housebuilding projects and develop new masterplans.
Khan explained: “Despite wanting to do far more, councils have been hamstrung by swingeing cuts from Government for far too long. My new Homebuilding Capacity Fund won’t reverse those cuts, but it will help ambitious councils to enhance their capacity to deliver large-scale new- build programmes.
“I am able to do this thanks to the business rates devolution deal between the capital and central Government – giving us more control to spend more money on the things that matter most to Londoners.” The Homebuilding Capacity Fund is being funded through the Business Rates Retention Pilot announced at last year’s Autumn Budget. This sees the capital retain 100 per cent of any increase in business rate receipts above the Government’s baseline during the financial year 2018/2019.
ACM, while criticising schemes that would put costs on residents: “I want to see landlords protect leaseholders from these costs. I am pleased that a number have stepped forward to do so, including Barratt Developments, Legal & General, Taylor Wimpey, Mace and Peabody. However, there are some who are not engaging in this process. If they don’t, I have ruled nothing out.”
Sector growth predictions downgraded
Growth predictions have been downgraded for the UK’s construction sector in 2019, amid concerns around Brexit uncertainty and ongoing delays in the delivery of major infrastructure projects. The Construction Products Association’s
Funding released to remove high- rise cladding
Khan funds £10m boost to London’s housing and planning teams
A new £10m fund to boost London councils’ housing and planning teams has been launched by the Mayor of London, Sadiq Khan.
According to the Mayor, over the last eight years central Government cuts have seen council budgets for planning and development fall by 50 per cent in London. He believes this has held back housing growth, and particularly plans to build new council homes. Sadiq’s new Homebuilding Capacity
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An estimated £400m to remove and replace unsafe aluminium composite material (ACM) cladding systems on social sector high-rise housing has been released by the Government. In total, 12 local authorities and 31
housing associations in England have been told that they have been allocated money in order to remove and replace unsafe ACM cladding on social buildings which are 18 metres or higher. According to Ministry of Housing,
Communities and Local Government figures, over 75 per cent of social housing buildings with unsafe ACM cladding have completed remediation, or are currently removing and replacing the cladding, plans are in place for the remaining 25 per cent. Secretary of State for Communities,
James Brokenshire explained: “We are doing the right thing by residents and fully funding the replacement of unsafe ACM cladding in social housing buildings 18 metres or above.” As to the private sector, he praised some housebuilders approach to the removal of
(CPA) Autumn Forecasts anticipate growth will remain flat in 2018, and only rise by 0.6 per cent in 2019, a downward revision from its previous estimate of 2.3 per cent. Despite a ‘weakened’ market, private
housing continues to be a key growth sector for the construction industry, with first-time buyer demand enabled by the Help to Buy scheme. Over the last 12 months, equity loans accounted for almost one-third of all housebuilding sales, in particular sustaining demand for housebuilding in the north and midlands, thereby offsetting falls in London and the South East. The sector’s output is forecast to rise 5 per cent in 2018, and 2 per cent in 2019.
The infrastructure sector also remains a primary driver of growth for the whole construction industry, with output forecast to hit a historic high of £23bn by 2020, driven by large projects such as HS2 and Hinkley Point C. However, concerns remain about the Government’s ability to deliver major infrastructure projects without the cost overruns and delays seen recently on Crossrail. Caution surrounds the forecast, and growth in the sector has been revised down to 8.7 per cent in 2019, from its previous forecast of 13 per cent. Brexit uncertainty continues to drive expectations of the sharpest construction decline in the commercial sector, particu- larly expected to be felt in the offices subset. Investors have reportedly signalled the uncertainty is too high to justify signifi- cant up-front investment in new floor space for a long-term rate of return, and output is expected to fall 10 per cent in 2018 and a further 20 per cent in 2019.
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