6 INDUSTRY NEWS
Mayor Khan awards councils share of £10m building fund
PM hopeful Raab criticised for housing reform calls
Local authorities in London are to receive a share of the Mayor’s £10m Homebuilding Capacity Fund. Sadiq Khan’s new fund is intended
deliver City Hall’s ‘Building Council Homes for Londoners’ programme, its first dedicated specifically to housebuilding. Through the programme, plans worth more than £1bn were agreed last year, with 27 London boroughs targeted to start building 11,000 new council comes at social rent levels by 2022.
Thirty London LAs will receive up to £650,000 from the new fund, to be spent on the delivery of more council and affordable homes, as well as masterplanning and planning.
Successful bids include a project to increase the pipeline of council-owned land in Ealing, a new Housing Delivery Hub in Newham, and a joint bid between Barnet and Harrow to develop a town centre planning brief.
The Mayor commented on the move, criticising the Government’s handling of the housing crisis: “London’s local authori- ties have seen their budgets slashed year after year through Government cuts. This has hit services across the board – and has severely hampered their ambitions to building more affordable homes.” He continued: “This funding won’t reverse all those cuts – but it will help councils boost their teams to go much further than they otherwise could. We are going as far as we can, and it is now imperative for the Government to give us significantly more investment and greater powers so we can build all the homes Londoners need.”
The Homebuilding Capacity Fund is being funded through the Business Rates Retention Pilot that saw the capital retain 100 per cent of the increase in business rate receipts above the Government’s baseline during the financial year 2018/19.
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Former Housing Minister and rumoured candidate for Prime Minister Dominic Raab has called for “radical” housing reforms, prompting criticism from the housing sector. Attacking the “Conservative failure” to stand up to developers and tackle the housing crisis, Raab told The Telegraph that a new Help to Buy scheme, that would exempt landlords from capital gains tax when they sell their property to existing tenants was one way forward. Raab’s other suggestions included releas-
ing more Government land – with councils being given more power to sell sites to smaller developers, plus designing by tender after outline planning permissions received, fewer impositions on councils who fail to get enough homes built, scrapping stamp duty on homes worth less than £500,000, digitis- ing land registry records, and finally, more support for modular housing. Richard Beresford, chief executive of the National Federation of Builders (NFB) criticised Raab’s comments, responding: “I don’t remember Dominic Raab having any of these ideas when he was Housing Minister.
“The revolving door used to usher in a steady stream of housing ministers is unlikely to get any rest, so how likely is it that these ideas will be implemented?”
Resi sector sees upturn in contracts in March
Contracts amounting to £1.8bn were awarded in the residential sector in March, Barbour ABI reported in the latest edition of the Economic & Construction Market Review, up by 8.3 per cent on February. Of the total contracts awarded in March, the research revealed that the residential sector accounted for 31.6 per cent, followed by commercial and retail with a 16.1 per cent share, and then hotel, leisure and sport with a 13.6 per cent share.
Residential unit numbers were also reported to increase, up by 2.1 per cent on February, at 10,066 units. The largest residential contract reported was the £100m Ten Broadway development at New Scotland Yard in London, which will see Multiplex Construction Europe Limited deliver a total of 246 luxury apart- ments in a 20-storey building. Overall construction contracts awarded
in March 2019 reached a total value of £5.3bn, which is a 1.2 per cent decrease on February, but 0.6 per cent higher year on year.
Private housing workloads prop up growth in construction sector in Q1
Private housing workloads are propping up growth in the UK construction sector, but supply is still falling short, according to the RICS UK Construction and Infrastructure Market Survey for Q1 2019.
A net balance of 21 per cent of private housing contributors reported a rise in workloads, compared to 20 per cent in Q4 last year. While it is the strongest sector in the industry, this is reportedly lower than pre-referendum, with RICS suggesting ‘political uncertainty and tax changes’ have ‘subdued growth’ in recent years. To back this up, it stated that in the four quarters preceding the referendum vote, 37 per cent more respondents were reporting stronger growth in this area. In the public sector, growth in activity slowed across housing and non-housing. Workloads in infrastructure were also down this quarter, with +11 per cent of respon- dents reporting a rise, down from +18 per cent in Q4.
Looking across construction as a whole, growth in workloads slowed across nearly all sectors this quarter. At the headline level, 9 per cent more respondents reported a rise in workloads, the lowest net balance in six years. 81 per cent of surveyors cited financial
constraints as an issue, the highest reading recorded by the RICS in five years. Prolonged political and economic uncertainty was another issue reported, with only 13 per cent more respondents expecting to see workloads, employment and profit margins rise in the coming 12 months.
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