There’s so much in today’s issue that our editors simply gave up on writing a foreword – and who can blame them, amidst snow-speckled Christmas merriment only slightly dimmed by strikes 😉
We open with an unusual foray into the world of finance, before diving into more familiar topics: The cost of living, extreme weather patterns, industrial action, and underperforming public services.
But we promise it’s not all dystopian doom-and-gloom in today’s edition.
We also cover a hefty collection of planning decisions and people news, important legislation going through Parliament (guess which bill…), energy infrastructure, the latest from the social housing sector, as well as soundings of the housing and office markets.
And to wrap it all up with something a little bit more positive, we’ve got a fair bit of happy news from our friends and clients.
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BIG BANG 2.0
Banking is not part of LDN’s usual beat, but this week we make an exception. Rishi Sunak has been promising a ‘Big Bang 2.0’ since he was Chancellor under Boris Johnson, as the sequel to Margaret Thatcher’s radical deregulation of the financial sector in the 1980s. In the event, the ‘Edinburgh Reforms’ announced by the Chancellor last week comprise over 30 measures, including ‘repealing burdensome pieces of retained EU law’ to ‘unlock investment and turbocharge growth’ not only for the Square Mile but ‘in towns and cities across the UK.’ On the plus-side, this is a refreshing acknowledgment of London’s contribution to the national economy. The capital, after all, accounts for about half of the UK financial services sector’s output and jobs. And yet, the capital’s response has been muted. The City of London Corporation has only cautiously welcomed Hunt’s statement as a ‘positive step’, whilst most of the capital’s political leaders and business associations have been rather quiet on the subject. Why? On one hand, some claim the reforms are more fizz than bang. On the other, many worry that even limited deregulation risks recreating the conditions that led to the 2007-2008 financial crisis. With hungry global competitors circling, the City certainly needs a boost. But is this it?
COST OF LIVING LATEST
Most Londoners seem to be far less worried by bankers’ bonuses than about their own bills. London Councils’ latest annual survey of Londoners estimates that 77% consider the cost of living one of the most important issues facing the capital. This, we are told, is ‘the highest ever level of concern for any issue recorded on this question in the past decade, and an increase in 15 percentage points since last year.’ The survey of 1,000 Londoners using Ipsos MORI’s Online Access Panel also unsurprisingly found that renters, women, those aged 45-54, those in manual occupations and those most dependent on welfare are most likely to say they are worried by the rising cost of living. This is followed as a top concern by housing affordability (58%), crime and policing (51%), the NHS and GP services (49%) and ‘housing supply / not enough housing’ (42%). You can see a fuller analysis of the results here. One particularly worrying finding is that 45% of respondents said that they have not turned on the heating when they would usually have. The survey preceded the current cold snap, being taken between 27 October and 9 November.
On that note, emergency cold weather measures have been activated across the capital, as freezing temperatures threaten the lives of rough sleepers. Last week, the Mayor activated the Severe Weather Emergency Protocol (SWEP) which ensures councils and charities open additional emergency accommodation for rough sleepers. However, frontline services are under intense pressure to cope with increased demand as figures from the Combined Homelessness and Information Network (CHAIN) show the number of people sleeping rough in London rose by 24% in the past year. Newham Council alone is expected to overspend £5.2m on temporary accommodation as it does not have enough homes to support the 9% increase in homelessness applications in the year 2022/23. There is a glimmer of hope, as the Mayor has announced that his manifesto pledge to deliver more than 1,000 homes for rough sleepers in London has been achieved, 18 months ahead of the April 2024 target.
But to get through this winter, rough sleepers will desperately rely on the support of local authorities and charities. You can do your bit by connecting rough sleepers with local support services using the Streetlink app or website – some boroughs also have their own apps. For those who want to make a contribution, City Hall is working with TAP London to raise money for four youth homelessness charities – you can donate at one of 35 TAP points across London or on their website. Other charities, including Shelter and St Mungo’s, are also accepting donations.
Rail workers, including those on London routes, are striking over the festive period as part of disputes over jobs, pay and conditions, with normal services only set to resume on 9 January. Transport for London has told Londoners to expect some disruption on parts of the District and Bakerloo lines, as well as on the London Overground and Elizabeth Line – but there are no planned Tube strikes, at least not yet. There will however be strikes on some bus services throughout December and January, with drivers employed by Abellio walking out over pay. Separate strikes planned by drivers employed by Metroline have been called off after they accepted an 11% pay rise. It does however look like there will be more disruption on the cards for Londoners in 2023, with members of Prospect at TfL subsidiary Rail for London Infrastructure overwhelmingly voting in favour of industrial action on the Elizabeth Line in a dispute over pay, though strike dates have not yet been confirmed. The TSSA union is also balloting its members on carrying out industrial action on the Elizabeth Line and RMT members on the Underground have voted to approve – in principle – six more months of industrial action over ongoing disputes about jobs and pensions.
SPECIAL MEASURES (CONT'D)
London’s emergency services are not covering themselves in glory these days – and it’s a shame, as the vast majority of first responders do sterling work, day in and day out. The Met Police saga continued this week, with Sadiq Khan appearing again before the London Assembly’s Police and Crime Committee. He was summonsed for a special session to discuss the findings of Sir Tom Winsor’s investigation over the circumstances surrounding former commissioner’s Cressida Dick’s resignation. It was a rather unpleasant affair, with the Mayor reading out ‘horrific messages of racism and sexism from Met Police officers’ and sparring with Conservative AMs over who said what and when. In the final analysis, no-one is the winner until the Met (and Mayor) get a grip on what is clearly an entrenched problem. Beyond policing, the London Fire Brigade (LFB) has now been placed into special measures. His Majesty’s inspector of fire and rescue services has taken the drastic step after a report last month revealed that the LFB has also seen a worrying number of incidents of misogyny, racism and bullying.
LONDON PLANNING ROUNDUP
- The public inquiry into proposals to demolish and redevelop 72 Upper Ground, the site of ITV’s former headquarters on London’s South Bank, continued. The developers’ counsel has described the proposals as ‘best in class’, whilst opposition campaigners criticised them as ‘overbearing’. The inquiry will continue throughout this week and resume in the new year.
- Redbridge Council has approved plans by Telford Homes and Sainsbury’s for the redevelopment of the supermarket’s superstore site in Ilford. The plans foresee 837 ‘predominantly build-to-rent’ homes (35% affordable by habitable room) and 447 student rooms, plus public green space and flexible commercial units, across five tower blocks between 16 and 36 storeys.
- Berkeley Homes and Transport for London’s proposals to develop 523 homes (35% affordable) across four blocks ranging from 15 to 26-storeys in Woolwich have been approved by Greenwich Council.
- Haringey Council's planning committee has approved plans for the redevelopment of the Broadwater Farm Estate in Tottenham. The Council plans to deliver 294 new council homes on the estate alongside a health centre, a grocery shop and affordable workspaces. Willmott Dixon has meanwhile been named as the council’s preferred contractor for the scheme.
- Waltham Forest’s planning committee has approved developer Scape’s proposal for a nine-storey 272-room ‘shared-living’ building opposite Blackhorse Road station – which will also see the ‘iconic’ former music venue The Standard replaced with a new double-height ‘cultural venue’ in the basement with space for around 500 people.
- Conegate Limited has won permission, on appeal to redevelop a former school playing field in Croydon into 140 new homes (50% affordable). The council had failed to make a decision on the scheme, allowing the developer to take the scheme to appeal.
- Sellar is reportedly set to unveil revised proposals for its £1.5bn redevelopment of Liverpool Street Station to deliver station improvements and around one million sq ft of mixed-use space across two new over station blocks, after Historic England’s decision to expand the site’s listed status. Sellar’s planning application is now expected to be submitted later than planned.
- The join venture between Canary Wharf Group (CWG) and Kadans Science Partner has submitted a detailed planning application to Tower Hamlets Council for a 23-storey life sciences tower that will deliver 823,000 sq ft of combined laboratory and workspace.
LITTLE LURB LOST
With compromises made and deals struck, the Levelling-Up and Regeneration Bill (LURB) has cleared the Commons. Yesterday was earmarked for the second of two Report Stage sessions, but as it turns out it was that and more besides. For those interested in the sordid detail of a debate that took over five hours, you may find it all on Hansard. But in brief, the Bill now contains several amendments, outlined in our last edition, forced through by rebel Tory MPs. Yesterday’s session saw the Bill complete its Report Stage and a very summary Third Reading, meaning it has completed all key stages in the Commons and now heads to the Lords. The vote has attracted very little media coverage – even in the trades, which contained not a whisper this morning. In any event, the amendments in question and in particular the one which makes central housing targets ‘advisory’ rather than mandatory, continue to be controversial. Voices as diverse as the British Property Federation’s CEO Melanie Leech and the Chair of the Levelling Up, Housing and Communities Committee Clive Betts (a Labour MP) worry that the decision will only lead to fewer new homes. Others, including the national Local Government Association, have welcomed it.
COAL FOR CHRISTMAS?
The Levelling Up Secretary has been met with backlash from environmental campaigners after granting approval for the UK’s first deep coalmine in 30 years. Cumbria County Council initially gave the plans the go-ahead, but they were called-in by the Government last year. Gove said that his decision to grant approval was based on the economic benefits and the creation of a domestic supply for the UK steel industry. However, opponents say that the majority of the coal would be exported and that the mine would increase emissions, putting the Government’s climate change targets at risk. There are further concerns about the UK achieving its net zero aims after Foresight Group warned that the Chancellor’s windfall tax on power generators will discourage investment in renewables. A report by Cornwall Insight has meanwhile also found that a number of factors including costs and skills shortages will mean that less than a fifth of planned renewable generation will go ahead, with major supermarkets calling on the Government to improve incentives to boost investment in renewable energy.
SOCIAL HOUSING LATEST
The Better Social Housing Review, chaired by Shelter’s Helen Baker, has laid out a series of steps that the social housing sector should take to address housing standards. The report was commissioned by the National Housing Federation (NHF) and the Chartered Institute of Housing (CIH) in June 2022, in response to widespread reports of poor conditions in social housing and with the aim of gathering ‘insights and testimonies on how to change social housing for the better.’ It pulls few punches, describing a ‘reality gap’ of over 10% between self-reported compliance with the Decent Homes Standard and actual compliance, as found in the English Housing Survey. Most of the review’s headline recommendations are uncontroversial, including HAs refocussing on their core purpose, giving tenants a voice in the decision-making process and developing a local community presence. It does however notably recommend that registered providers should ‘work together to conduct and publish a thorough audit of all social housing in England’, working to an ambitious six-month implementation timetable. It also recommends the universal adoption of new HACT UK Housing Data Standards. The industry press has reacted positively to the review’s recommendations and both NHF and CIH have accepted the recommendations in full.
HOUSING MARKET LATEST
The housing market also continues to suffer from a cold snap as prices continued their sharp down-turn in the past month. According to Halifax, average UK house prices recorded their third consecutive and largest monthly drop since 2008, falling by 2.3% in November. In the short term, prices look set to continue falling as Rightmove has found the average asking price for a newly listed property has fallen by 2.1% in December so far, whilst the RICS November 2022 UK Residential Survey of Chartered Surveyors has found demand among house-buyers also continued to fall in November. A period of downwards price adjustment on the back of a booming market need not be hugely problematic for housebuilders and is of course positive for first-time buyers, but increasing mortgage rates and soaring inflation continue to take their toll on affordability. Even those who are able to afford higher mortgage payments are faced with a limited supply of properties to choose from – and for those who can’t, the rental market is tough. Rents across the UK have risen by 12.1% to record highs over the past year and the average renter now spends 35% of their salary on accommodation – the highest level in a decade according to Zoopla.
OFFICE PROPERTY LATEST
There has been a mixed news for the London office sector in recent weeks. On the bright-side, research by Savills has found that leasing transactions for fitted offices of up to 10,000 sq ft in the City have doubled in the past 12 months. A report by BNP Paribas Real Estate has meanwhile shown that the office market in central London has registered a 63% increase in take-up in the first nine months of this year compared to 2021, with the capital ranking second in take-up among 25 European cities. Citi has however said that it expects the value of London’s office buildings to fall by 38% in the next two to three years and Canary Wharf Group has begun to diversify its portfolio as demand for office space falls, having now submitted plans for a new 23-storey life sciences campus. Separately, LCA client London Property Alliance has written to the Levelling Up Secretary representing a number of the UK’s biggest developers calling for local authorities to end their insistence on a ‘retro-fit only’ approach to redeveloping commercial buildings.
FROM OUR FRIENDS
- Open City has won the long term youth programme award at the Thornton Education Trust annual Inspire Future Generations Awards, for Accelerate, a design, education and mentoring course providing access to a wider pool of young people and increasing diversity in the built environment professions.
- Future of London have launched Future of Greater Manchester with their Executive Director (and Coherent Cities Director) Lisa Taylor as Chair and Regeneration Brainery director Judi Greenwood as Programme Lead. The new entity is an evolution of the GM Leaders Plus courses launched in 2020 – and will connect regularly with London peers.
- The Davidson Prize, an annual design ideas competition, is now open for registrations. The 2023 theme and judging panel will be announced by The Alan Davidson Foundation on Tuesday 10 January 2023 and anyone interested in competing has until Tuesday 24 January to register interest.
A VERY LONDON XMAS
We were delighted to attend – in force! – On London’s Christmas party at the iconic India Club yesterday. Our founder, Partner and Senior Advisor Robert Gordon Clark officiated the party’s quiz alongside LSE's Professor Tony Travers. Whilst the prize went to data analyst and former Hammersmith & Fulham Councillor Christabel Cooper, we’d give an honourable mention to our very own Account Manager Sam Griffiths, who beat a crowd of peerless anoraks and London nerds to a couple of the more devilish questions. The evening also saw a series of excellent speeches about London’s past, present and future, including from London Assembly Member Sem Moema, Camden Leader Georgia Gould, Deputy Mayor Jules Pipe, On London’s very own founder Dave Hill and a surprise visit and speech from Mayor of London Sadiq Khan himself. This afternoon we are attending the APPG for London’s bash and will tell you all about it next Wednesday!
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