At first glance, it may seem that this edition covers a lot that’s gone awry. But don’t be disheartened.
Legal action against the ULEZ is not the end of the line (not yet at least) and the policy may yet emerge in a stronger, better-rounded form that addresses its unintended negative impacts more effectively. And whilst the Grenfell Tower fire was an unmitigated disaster in its own right, the progress of efforts to bring those responsible to account is encouraging.
There are also flies in the ointment in many of our other stories - covering London’s population trends, planning news, culture in the built environment, people news, the housing and commercial property markets and the high street. But there’s invariably a silver lining to each story.
And that’s the moral of the story. Yes, some of its components are outdated and whole swathes of it desperately need an MOT. But London remains a powerful engine for growth and one that has a unique ability to repair and renew itself whilst in motion.
The London Chamber of Commerce & Industry’s latest quarterly economic survey certainly seems to confirm as much, indicating business leaders are fully conscious of the challenges ahead, but increasingly optimistic.
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ULEZ HITS ROADBLOCK?
A legal challenge to the Ultra Low Emission Zone’s (ULEZ) expansion has passed its first hurdle. The London boroughs of Bexley, Bromley, Harrow, and Hillingdon, plus Surrey County Council (all Conservative-dominated) have formally applied to the High Court for a judicial review of the Labour Mayor’s plans. They claim that the expansion is unlawful on five grounds. A High Court judge has now allowed the case to proceed, but only on two grounds, namely: an alleged ‘failure to follow statutory procedures’ by using provisions of the GLA Act to ‘vary’ the existing scheme order rather than issue an all-new charging order; and an alleged failure to consider the inclusion of non-Londoners in the scrappage scheme launched to mitigate the expansion’s negative effects. The news has generated headlines across national, regional and local media. Opponents of the expansion have pounced on this as evidence that Sadiq Khan is on the back foot. Some even claim it is a a turning point in what they see as a wider ‘war on motorists.’ The Mayor himself has deployed some interesting rhetorical gymnastics in his reaction to the the High Court decision, saying he's ‘pleased that the judge refused permission on the majority of grounds.’ In fact, in the days since Sir Ross’ decision, City Hall has been on a media blitz in support of the expansion plans, covering everything from efforts to increase the availability of electric vehicle charging points to further research on the effects of air pollution on health.
Looking ahead, the one-day High Court hearing is expected to take place sometime in July, less than two months before the ULEZ expansion’s target launch date of 29 August.
(NOT) SETTLED, YET
With the final report from the Grenfell Inquiry only expected to be published later this year, survivors of the fire and bereaved family members are continuing to make their voices heard. Over 900 of those affected by the fire, which killed 72 people in June 2017 and left many more injured and traumatised, have settled a civil claim with a number of companies and organisations, including cladding manufacturers Kingspan, Celotex and Arconic. The settlement, which will see an undisclosed sum paid to survivors and the bereaved, will not affect any criminal charges that may be brought forward following the publication of the Inquiry’s report. Separately, there has been some backlash to an upcoming TV drama and separate play about the fire, with survivors questioning the need for the productions. In response, the BBC, which is planning a three-part series, has said that the dramatization will be based on ‘over five years of research’, while the National Theatre’s play will be based on interviews with survivors and the bereaved and will ensure that a ‘story of national significance’ is ‘told on a national stage’. Read on for the latest on the Government’s wider building safety campaign in the Caught Our Eye section.
POPULATION BY PROXY
The ebb and flow of London’s population continues with new figures from London Councils on primary school starters for this September giving us our latest sounding. In good news for their families, 98% of London’s primary school starters have been offered a place at one of their preferred schools. This includes 88.5% of the total number of children securing a place at their first preference. However, in less encouraging news for London and its school system, the boroughs are also seeing decreasing numbers of applications for both primary and reception level education with primary schools receiving 2.67% less applications for primary school places compared to last year. A separate report from London Councils in January predicted a fall in demand for all school levels across the 32 boroughs. Camden, Hackney and Islington councils have all indicated they will be merging or closing primary schools in response to a surplus of empty seats. London Councils attributes this negative trend to several factors including ‘the localised effect of families leaving London during the Covid-19 pandemic and following Brexit.’ A link between falling demand for school places and asupposed flight from London also appears in the latest spate of reports claiming that young families priced out of London rental market are ‘deserting’ London. However, none of these reports seem to contain any specific evidence of a population flight from London, nor do they prove conclusively that there is (yet) a link between the rising cost of rental housing and any such speculated flight.
LONDON PLANNING ROUNDUP
- Redbridge Council has granted permission for Bellway Homes to commence enabling works across a highly-contaminated 10 hectare brownfield site on Billet Road, Romford. Bellway is planning to build up to 1,300 low to mid-rise homes on the site, in buildings of up to eight storeys though their precise plans are still at a very early stage, with the focus of this application being on making the site safe for development.
- Analysis of quarterly planning application statistics by Planning has revealed Camden Council as the leading local authority for the approval of plans for permitted development rights under householder extension ‘building upwards’ designation. In the period between the new PDRs coming into effect in April 2021 and September 2022, Camden approved all of its 44 received applications, with Kensington and Chelsea in sixth place nationally, approving 10 plans.
- Sellar Property Group’s £1.5bn plans for the redevelopment of Liverpool Street Station have received backing from the City of London Chamber of Commerce. The plans to improve access, passenger capacity and commercial functions were welcomed by the chamber to ‘future-proof’ Liverpool Street as a hub for travel and business. However, Historic England has criticised the designs of the redevelopment from Herzog & de Meuron as ‘fundamentally misguided’ given the station’s historical features.
- Westminster Council is set to reverse its planning decision to demand public access to the upper floors of the former US Embassy building on Grosvenor Square, citing security and public safety concerns. The building’s owners, Rosewood Hotel Group, were previously granted permission to convert the building into a five-star hotel on the condition of allowing members of the public to access the 7th floor, where a bar and restaurant will be established.
A PLACE FOR CREATIVITY
Yesterday, British Land held an event and produced a fascinating report on the success of their year-long collaboration with New Diorama Theatre at Broadgate. NDT Broadgate saw one of the UK’s biggest (20,000 sq ft) and most accessible arts hubs created in the heart of the City of London for a year during the pandemic. The investment into two floors of an office block saw a return of over £40m to the UK economy, with around 1,000 jobs created. But far more importantly 8,800 artists accessed the high quality free space and over 250 shows were created in just one year including the West End hit Black Boys Who Have Considered Suicide When The Hue Gets Too Heavy, which has just reported ticket sales exceeding £1m. To access the full report into NDT Broadgate and see the benefits of using empty commercial space for artists click here.
Separately, Camden’s creative credentials have been further enhanced by the council’s newly agreed deal with developer Yoo Capital to create a masterplan for regeneration projects in Kentish Town. The borough has approved the sale of council-owned sites on Holmes Road and Regis Road, with ambitions to create a new ‘Creative Quarter’ for film and TV production, affordable housing, and the intention of improving connectivity between Kentish Town and Gospel Oak.
- Pat Flaherty, currently the Chief Executive of Harrow Council, has been appointed to the top role in his home county of Staffordshire and is expected to begin in the summer.
- Residential developer Mount Anvil has appointed Katie Rogers as Chief Financial Officer.
- UK-wide city region transport network Urban Transport Group has appointed Jason Prince as its new director, joining from his previous position at Greater Manchester Combined Authority. He will take up the position in July 2023 following the departure of former director Jonathan Bray.
- New-builds insurance and warranty provider NHBC has appointed Charlie Ash as its sector lead for housing associations.
- Student housing developer Your Tribe has appointed Duncan Palmer as Director of Student Accommodation, joining from global real estate developer Mapletree.
- Property consultancy Knight Frank has appointed Karen Bowes and Shishir Paijal to its group executive board. Bowes joins from Barclays Bank in the newly established role of group chief people officer, while Paijal joins the board as current chairman and managing director of the company’s Indian division.
- Former director and head of development at British Land, Nigel Webb, has joined the board of real estate lenders Precede Capital Partners as non-executive director. He will also be sitting on the company’s credit and ESG committees.
- Clarion Housing Association have appointed Sasha Morgan and Sharon Critchlow to the association’s board. Morgan is currently the director of the Social Mobility Commission, while Critchlow joins as an experienced board member, author and member of the Association of Chartered Certified Accountants.
Another week, another tangle of contradictory headlines about the health of the UK’s housing market. Major mortgage lenders Nationwide and Halifax, whose house price indexes are closely-watched bellwethers, can’t even agree on whether house prices went up or down in March. Last week we also saw headlines suggesting upbeat expectations from HSBC Holdings Plc, but apparent gloominess from RICS. It should be said that even positive forecasts we have seen are all tempered by indicators of still-falling demand (which by some estimates has been falling sharply indeed). A recent edition of The Economist has meanwhile warned that even cautious optimism ‘may prove unwarranted’ not only for the UK but for other relatively wealthy nations. Of course, projected performance varies for different countries and within the UK itself. The Evening Standard has recently featured analysis by research firm Pantheon, who say that London house prices will ‘fall 10% by autumn’ – a sharper drop that an estimated minus 8% for the UK as a whole. Separately, a Financial Times piece entitled ‘London stalling: inside the prime property stalemate‘ cites analysis suggesting that luxury residential properties in the capital may be losing their lustre. But these alarming-sounding headlines ignore the fact that London house prices are already sky-high compared to the rest of the country. Ultimately, we remain reassured that though contradictory, none of the forecasts we have seen predict sudden movements in the market – and at a time of extreme uncertainty, relative stability is itself an asset.
It’s also been a bit of a mixed bag of a week for the commercial property sector, with post-pandemic work trends continuing to have an impact. While data from Remit Consulting has found that rent collection in the UK fell for the first quarter of the year for the first time in two years, individual firms such as office operator Workspace Group are finding that they are able to increase their rents as demand stays stable. Similarly, while data from CoStar has shown that the amount of vacant office space across the country has risen by 65% since 2020, a report by Cushman & Wakefield has found that in London, a record number of new office lettings have been signed, with a record number of tenants moving to larger premises rather than opting to downsize. New entrants to the London office market opted predominantly for premises in the City and in the West End, with a few choosing to locate their offices in East London. Recent reports meanwhile suggest that both Revolut and HSBC are on the hunt for new offices, which may see them both leave Canary Wharf.
BUILDING SAFETY LATEST
Building owners for high-rise residential buildings are now able to register their details with the new Building Safety Regulator. One of the major components of the Building Safety Act, the regulator operates through a digital portal, set up within the Health and Safety Executive. As required by the new legal framework, owners of occupied buildings of over 18m in height face criminal prosecution if they do not register. The regulator begins operations as the remaining two of 10 housebuilders previously ‘named and shamed’ by Michael Gove are said to be closer to signing the housing secretary’s landmark contract on remediation for cladding and fire safety works. Further to this, DLUHC has issued a procurement notice for specialist litigation support to work alongside its internal Recovery Strategy Unit (RSU) set up to pursue companies that are not fulfilling legal responsibilities to make their buildings safe. In its procurement notice, DLUHC said the firms procured will have powers ‘to hold high profile actors to account and deliver justice for leaseholders.’
PAINTING THE HIGH STREET RED?
The Labour Party continues to tease out its policies across different areas and last week, they put forward proposals for the high street. Its ‘five-point plan to bring high-streets and small businesses back to life,’ launched by Keir Starmer and Rachel Reeves during a visit to Great Yarmouth, made a moderately-sized splash in the media. The five points are: cutting business rates for SMEs and scrapping business rates altogether… ‘in the long term’; a £700m scheme to support SMEs in making themselves more energy efficient; forcing bigger businesses to publish information on their payment practices in their annual reports (to tackle late payments to SME contractors and suppliers); giving more powers for local councils to forcibly take over empty shops; and (in a crossover with its policing promises) encouraging more town centre patrols. All of which sounds broadly reasonable and largely chimes with the demands of business. In fact, one could even say that the plans sound remarkably like policies espoused by the Conservative Government – and in the case of empty shops powers for councils, like provisions of the Levelling Up & Regeneration Bill already making its way through Parliament. Consensus policies can of course, be a good thing, but there are risks in focusing on a small number of ‘vanilla’ policies. Indeed, per the British Retail Council’s reaction, what is missing from Labour’s plans may be just as important, from investment in new transport and digital infrastructure, to planning reform “which recognises and supports a wider mix of uses.”
JONATHAN REYNOLDS AT LCA
On Tuesday morning we welcomed Shadow Secretary of State for Business and Industrial Strategy Jonathan Reynolds MP to our offices for a Breakfast Briefing, expertly chaired by our very own Jonny Popper. We were joined by many of our clients and associates who got the opportunity to ask questions about a wide range of topics, including property and investment, life sciences, social housing and the Labour Party’s relationship with business. All our guests were given a copy of our latest LCA Insight Special Report, A red dawn? Looking ahead to a possible Labour government. You can secure your own copy here.
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