“I have been involved in London politics for 32 years, starting when Margaret Thatcher was forced out by her party and a man thought by many not to have the ability or charisma to survive, one John Major, not only did survive, but won the 1992 election when most thought Kinnock’s Labour would win comfortably. We then had Black Wednesday and five years of Tory infighting (remember “the bastards”?) before the inevitable Labour landslide of 1997. Then 9/11, the Iraq War, the great financial crash, a coalition government starting over a decade of “austerity”, Brexit, Johnson, Covid and now….well….
I can safely say that I have not witnessed such chaos at the top of government in all that time as we are witnessing now. They make the coalition government look positively joined up. They are floating more ideas than boats sent to Dunkirk in 1940. They have alienated both older savers/pension holders and younger mortgage holders/aspiring home buyers in a way I didn’t think possible. The polls for the Tories mirror the fall of sterling as the polls for Labour reflect the rise of interest rates.
Our superb Insight Team is, every day (and night almost), gathering carefully gleaned intelligence, which is then thrown in the bin as things change on almost an hourly basis. Competitors and associates are no doubt in the same boat as us, and as for our clients, we can only shrug when they ask us what the hell is going on. Indeed, my colleague Jenna notes that she is attending an event next week entitled exactly that, “What The Hell Is Going On?” with special guest speaker Michael Gove…
But fear not, we will continue to provide you with regular intelligence and commentary. In the meantime, I am off to lie down in a darkened room for an hour or two as you read on.”
LCA Partner & Senior Advisor Robert Gordon Clark
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When it comes to London’s ‘fundamentals’ things do seem much as they always were, with major investors and occupiers continuing to read Central London as a safe bet. In the last week these have included pharma giant GlaxoSmithKline and big dog asset managers Blackstone. Clearly, though, these are not normal times and London’s housing market in particular seems headed for a reckoning. The latest forecasts are not great and we detect a tinge of panic in some quarters, but London is not alone in facing rising interest rates and build costs. Add to the mix that even luxury developers will freely admit that housing costs in the capital are, as they currently stand, “outrageous”. We all know though that London is extraordinarily, perhaps uniquely, adaptable. Look at how the transformation of King’s Cross has become an exemplar for regeneration or at how Battersea Power Station is now poised to celebrate its own reinvention. It’s not simply about bricks and mortar, or faceless market forces. The City of London Corporation’s upcoming “immersive theatre experience” is a microcosm of the mix of history, culture and commerce that makes London so appealing. If you’re still doubtful about London’s ability to learn new tricks, look no further than Tottenham Hotspur F.C., whose stadium is now regularly hosting NFL games . American football, in Haringey? Who would have believed that, ten years ago?
NEW LABOUR AXIS
Five months after gaining Wandsworth and Westminster, Labour is keen to prove it can transform these traditionally Tory boroughs. In Wandsworth, Labour councillors have grabbed headlines after it emerged that they will not be attending the opening of the revamped Battersea Power Station later this week, saying that they would not ‘accept hospitality from property developers’. The Council has also in recent weeks announced several initiatives, including a possible review into a landlord licencing system for the Private Rented Sector and funding of over £5m to help residents amid the cost-of-living crisis. In Westminster, the Council has launched its first consultation on a partial review of their City Plan, announced plans to hold a residents’ ballots on the Church Street estate regeneration programme, announced an independent review of the Oxford Street District Programme, launched plans to install 500 additional Electric Vehicle charging points by March 2023, and launched a wide-ranging Fairer Westminster strategy.
LOOKING TO 2024
London Labour politicians are practically falling over each other to be selected as parliamentary candidates. The numbers are certainly on their side, with a recent poll by Survation putting Labour at 59% of the vote in the capital, the Conservatives at 22% and the Lib Dems at 13% - a much wider spread than that shown in national polls. While the MRP technique used by Survation comes with a long list of caveats, if this result were to be replicated at the polls, the Conservatives could be wiped out in the capital. In Kensington, won by the Conservatives’ Felicity Buchan in 2019 with a slim majority of just 150, there are no less than five contenders for the seat, namely Hammersmith & Fulham Councillor and Leader Stephen Cowan, former MP Emma Dent-Coad, Hackney Councillor and Cabinet Member Mete Coban, charity activist Joe Powell and Salman Shaikh, CEO of the Shaikh Group. Up in Finchley and Golders Green, arguably a battleground seat now held by Tory MP Mike Freer, Labour’s selection longlist includes former Hounslow Councillor Hanif Khan, Barnet Councillor Arjun Mittra, barrister Sarah Sackman and civil servant Ruth Ward. We covered some of the key East London selection battles last week: since then Sam Tarry, the incumbent Labour MP for the “safe” Ilford South seat, has been deselected, in favour of Redbridge Council leader Jas Athwal, who will now stand for the seat.
A TALE OF THREE STATIONS
Back to the theme of London’s evolution, London’s transport hubs remain major regeneration hotspots – and some are getting hotter. A joint venture between developers Sellar, transport operator MTR and Network Rail has unveiled a huge £1.5bn plan to redevelop Liverpool Street Station in the City of London. The plans comprise a new 16-storey block above the station, housing a hotel and office scheme, plus a £450m programme of infrastructure works including new entrances and concourse, improved step-free access and more. Cue concerns by heritage groups, fretting about how the plans will affect the façade of the Grade II listed Andaz hotel, even though the public consultation itself only begins in late November. Meanwhile, a partnership between Newham Council, London Legacy Development Corporation (LLDC), Transport for London (TfL) and Network Rail have begun consulting on early plans, worth “anywhere from £300m up to and beyond £1m” for “transforming Stratford Station and improving the surrounding areas”. While the content of those plans is less clear at this stage, it is hoped that infrastructure improvements to Britain’s busiest rail station can enable the construction of up to 1,000 homes and improve local connectivity with Queen Elizabeth Olympic Park and Stratford Town Centre. Over in West Central, HS2’s demolition and enabling works at Euston Station are well underway and here, the discussion is currently focused on… spoil.
LONDON PLANNING ROUNDUP
- Plans by Lendlease for an 18-storey building delivering office space and a new community health centre in Elephant & Castle have been rejected by Southwark councillors against officers’ recommendations.
- Plans by Twenty Twenty Ilderton Wharf Limited and SGBD for the delivery of 170 homes (40% affordable by habitable room) in a part-25, part-23 storey building have been deferred and will now go to Committee next month. The plans have been recommended for approval by officers.
- Areli has withdrawn its plans for the redevelopment of the Walnuts Shopping Centre in Bromley after over 3,000 objections to the scheme were submitted. The plans included the demolition of the existing building and the delivery of 990 homes in 19-storey buildings, a new square, shopping centre, leisure facilities and day care centre.
- A referendum on the Roman Road neighbourhood plan in Tower Hamlets is being held on 13 October. The plan includes policies relating to walking and cycling, community-led housing and designating local green spaces. If it is adopted, then the Council would have to take these policies into account in its planning decisions.
- In West London, Scottish and Southern Electricity Networks (SSEN) has said that some of the developments which had been at risk of delay due to grid capacity issues can now go ahead.
- Jackie Doyle-Price MP has been appointed as the new Construction Minister in the Department for Business, Energy and Industrial Strategy. She is the eighth person in that role in less than four years.
- MP for Chelsea and Fulham Greg Hands has been (re)appointed as Minister of State at the Department for International Trade. In this case, the revolving door has at least brought an experienced minister to the role, which he also held between 2016-18 and 2020-21.
- James Bowler has been appointed as the new Permanent Secretary to the Treasury.
- Sir Kenneth Olisa has been announced as the new Chair of BusinessLDN.
- Patrick Franco has been appointed as the new Chief Executive of Notting Hill Genesis and is set to take over in January 2023.
- Catherine Webster has been appointed as the CEO of PfP Capital.
- Kate Morgan has been appointed as Gerald Eve’s first Chief Operating Officer.
- Andrew Child has been appointed by Knight Frank as head of central London property management.
- Executive Director of CBRE Stewart Smith has announced that he is to retire at the end of the year.
- It has been announced that Dermot Gleeson will be stepping down from the Board of MJ Gleeson at the end of the year.
- Des de Beer has stepped down from the Board of Hammerson with immediate effect.
- Mark Bensted has resigned as Chief Executive of London Irish for personal reasons. The role is to be filled by Chief Financial Officer Adrian Alli on an interim basis.
- Mark Gonnella, Arsenal Football Club’s director of media, communications and community affairs, is to step down at the end of the season.
- The Epping Forest Heritage Trust is recruiting for between three and five new Trustees. Find out more here.
The Government’s drip-feed of policy briefings and constant rescheduling of major policy statements is starting to get slightly ridiculous. It's also extremely annoying for the LCA Insight Team, who make a point of being on top of these things. Earlier this week, The Guardian reported that Levelling Up Secretary Simon Clarke was set to launch a ‘reset’ of planning in a speech on 19 October, but today The Times suggested that planning reforms will not be unveiled in full until after the Chancellor’s fiscal statement, brought forward from 23 November to 31 October. In the meantime, we’ve been treated to a cavalcade of rumours about what those reforms might contain, with The Times hinting at softened affordable housing requirements and environmental regulations and The Telegraph floating the idea of allowing the delivery of homes on brownfield sites on the Green Belt, as well as extending Permitted Development Rights and launching a review of the housing market in England. While ministers tinker endlessly with policy, the latest Department for Levelling Up, Housing and Communities statistics show that the number of planning applications submitted to local authorities in the second quarter of 2022 were down 17% compared to the same period last year, with the number of permissions down 12% over the same period.
In other DLUHC news, the Department has given the owner of a 15-storey residential building in Stevenage 21 days to commit to rectifying fire safety issues, or face legal action. Grey GR, which is the first organisation to face action by the Government’s Recovery Strategy Unit, has reportedly failed to address the building’s safety issues for two years and bills for remediation work have been passed on to leaseholders.
HEALTH INFRASTRUCTURE CRUNCH
Delivering on the Johnson Government’s pledge to build “40 new hospitals in England by 2030” was always going to be hard. It’s now got a whole lot harder. Late last month, Therese Coffey’s “first major intervention” as Health Secretary was to release a package of measures “to ensure the public receives the best possible care this winter and next” – including commitments to “accelerate” the hospital building programme. While welcoming the plans in principle, NHS Providers have since warned that market “turbulence” is pushing project costs upwards and complained that the Government refuses to clarify how it will enable Trusts to cover these. It was meanwhile reported by the Health Services Journal that the Government is tightening its control over spending on NHS capital programmes, potentially creating “an additional bottleneck delaying important spending decisions.” Such delays could be terminal for some hospitals, as underlined by recent Freedom of Information requests by the Lib Dems and New Civil Engineer. These confirmed longstanding fears that parts of no less than 20 existing hospitals across England, run by 18 individual NHS Trusts, have ‘roofs at risk of collapse’, only some of which have secured funding to remediate the issue.
RENT CAP CONCERNS
The future is also looking tight for both Registered Providers and social tenants. The government is consulting on options for capping social housing rent increases for the coming financial year, with 5% put forward as DLUHC’s preferred option. Analysis carried out by the G15 group of London’s biggest housing associations has found that a 5% rent cap could see their rental income fall by £1.52bn over the next five years. An impact assessment published by DLUHC itself indicates that the cost to housing associations and councils could be as much as £7.4bn over five years. Beyond rent revenues, credit ratings agency S&P has warned that a widening gap between inflation and rent increases also threatens housing providers’ creditworthiness. It is not only landlords that are feeling the squeeze, however, with tenants in some housing associations reportedly considering collective action up to and including withholding payment of increased rents. DLUHC describes the 5% option as an “appropriate balance” between the need to protect the most vulnerable households and enabling landlords to mitigate some of the impact of rising costs.
LCA SELLS IN
We were pleased to support long-standing clients Lee Valley Regional Park Authority in securing a lengthy feature in the latest edition of NLA’s New London Quarterly magazine – giving their CEO Shaun Dawson an excellent platform to spread the word about his organisation’s vital work delivering on the Olympic Legacy, from the bidding process right the way through to today. Separately, we helped clients Twelve Architects secure coverage in dezeen for the extraordinary linear park they designed for the National Trust, on the disused Castlefield Viaduct in Manchester. The piece walks the reader through this new “sky park” and features a multitude of beautiful pictures from this remarkable green space, which is now open to the public. Meanwhile, in response to the spate of Conservative Party Conference news, LCA also helped VU.CITY secure the publication of a letter to the editor in Property Week, highlighting proptech’s potential to become the Conservative’s saving grace for planning reform.
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