LDN Weekly – Issue 257 – 1 March 2023 - Marching Ahead
MARCHING AHEAD
"I am shamelessly hi-jacking the prime real estate of this LDN editorial to announce the launch of a brand new LCA Insight Series. Brought you to by the same team who bring you LDN each week."
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No images? Click here  MARCHING AHEAD
Jenna Goldberg, LCA Partner & Managing Director, Insight and LDN Editor We hope you enjoy this edition and if you don't already, do follow us on Twitter, Instagram and Linkedin. You can also visit our website for more information on LCA’s team, services, and clients. Oh and a technical note: If you like hearing from us, make sure to add ldn@londoncommunications.co.uk to your contacts or ‘safe sender’ list – this will help ensure our news bulletin lands in your inbox.  LABOUR'S DAY?The Labour Party is beginning to shift into pre-election mode in earnest. Last week, Labour announced its overarching Five missions for a Better Britain – broad ambitions for economic growth, clean energy, reforming the NHS, policing and crime, and ‘breaking down the barriers to opportunity at every stage.’ These came with some policy proposals, but most detail was understandably reserved for subsequent announcements. The first of these came on Monday. In a speech to business leaders and economists in the City, Starmer presented his ‘plan for growth.’ Whilst overshadowed by the Northern Ireland protocol deal, Labour did notably win a few high-profile endorsements from business. We were especially intrigued by widely-publicised commitments to planning reform though there is not much detail on this – yet. In his speech, Starmer obliquely suggested that the current system favours ‘the already wealthy’ and is failing to deliver ‘new houses, wind farms, and laboratories.’ In a linked op-ed, Shadow Chancellor Rachel Reeves referred only to ‘updating our planning system to remove barriers to investment in new industries.’ Reeves’ comment echoed language in Labour’s relevant briefing, which elsewhere also mentions ‘helping first-time buyers onto the housing ladder and building more affordable homes by reforming planning rules and arcane compulsory purchase rules, with new protections for renters.’ The briefing later adds an ominous reference to ‘the vested interests’ that need to be ‘overcome’ to achieve planning reform…
A BUILDING MAYOR?Whilst the national Labour Party’s approach to the built environment is still under construction, a certain Labour Mayor is onto the final fit. In mid-February, the Mayor recorded a remarkable uptick in the construction of new affordable homes funded by City Hall, with 3,698 started from September to December 2022 and a total of 6,877 total starts for the financial year to date. This is, City Hall informs us, ‘a more than 50% increase on the total number of homes built by this point last year when Sadiq went on to achieve the highest number of starts since City Hall records began.’ See the detailed figures here. Subsequently, the Mayor launched the new Architecture and Urbanism (A+U) Framework, a ‘diverse, pre-approved panel of built environment consultants.’ Open to Greater London Authority Group bodies, councils and housing associations, the framework is intended to make procurement for public sector projects quicker and easier. And on the first anniversary of the invasion of Ukraine, the Mayor announced funding for up to 600 new homes in London for Ukrainians and Afghans refugees. Whether you agree or disagree with these and other policies implemented by Sadiq Khan, the national Labour Party will surely be looking to his work for examples of how ‘Labour in power’ can deliver growth. LONDON PLANNING ROUNDUP
LONDON LEADS NET ZEROLondon’s built environment sector is leading the way when it comes to efforts to decarbonise, but a number of knotty challenges remain. Last week, Canary Wharf Group joined forces with British Land and Barratt Developments for the Ambition to Action summit, which aimed to encourage the sector’s wider construction supply chain to decarbonise. There are however a number of hurdles the sector will need to overcome. Policy is one, with a report by the British Property Federation and JLL having found that 9 in 10 industry leaders do not think that existing Government policy will help the sector transition to net zero by 2050. The sheer scale of the challenge is another, with BNP Paribas Real Estate finding that 8% of commercial buildings in inner London will be ‘unlettable’ from April, a figure that could increase to 50% from 2027, under upcoming changes to the Minimum Energy Efficiency Standards. From April, it will be illegal for offices with an F or G rating to be let out. The minimum standard will then rise to a C rating by 2027 and B by 2030. PEOPLE NEWS
 BUSINESS CREDENTIALS BATTERED?London has received mixed marks as an investment destination in a number of recent reports and rankings. We’ve taken a closer look. Schroders’ Global Cities Index for 2022 – which ranks cities across Economic, Environmental, Innovation and Transport criteria – saw London drop from first to third place. While third place is still a pretty sweet spot, above the likes of New York, Singapore, Berlin and Paris, London’s relative fall is, per Schroders and relevant press coverage, due in part to a new venture capital score added to the Index, boosting established innovation hubs San Francisco and Boston to first and second place. It is rather more concerning that the separate Savills Tech Cities 2023 report ranks London fifth globally, down from third place in its 2019 report. The city’s performance also varies in other sector-specific reports. London is ranked high as a ‘crypto hub’ (a controversial one, we know), but woefully low for broadband speeds. In brief, London cannot rest on its laurels. As per a recent blog by London Property Alliance’s Chief Economist Alexander Jan, ‘London, the grandmother of world cities, is going to have to start watching her back a little bit more carefully from now on.’ HOMEBUILDING CRUNCH?Housing supply, another key ingredient for a city’s success, may be headed for a bottleneck – and not just in the capital. The Home Builders Federation (HBF) has warned that housebuilding in England could fall to its ‘lowest level since the second world war,’ predicting that it could fall below 120,000 new homes annually over the coming years, or less than half of the Government’s long-standing annual target. The HBF attributes this tailing off of supply to planning policy changes and ‘over-strict enforcement of environmental regulations’. This is not just developers griping about ‘red tape.’ Planning’s Housing Supply Index update for February indicates that as of last month, 38% of planning authorities in England were unable to demonstrate at least a five year pipeline of deliverable housing sites - a slight improvement on the last update in June, when 39% were unable to do so, but still concerning. Separately, in a letter to the Levelling Up Secretary, the British Property Federation, National Housing Federation, Shelter, Crisis and the Church of England - an (un)holy alliance if there ever was one – have warned that the Infrastructure Levy enshrined in the Levelling Up & Regeneration Bill (LURB) will only further reduce the delivery of affordable housing and homes for social rent. Barking & Dagenham Council Leader Darren Rodwell has meanwhile said – in his capacity as London Councils’ lead on regeneration, housing and planning – that the LURB is ‘flawed’ and will ‘make levelling up and regenerating our communities harder, rather than easier.’ FLOORSPACE FLIGHT?The pandemic, hybrid working, online shopping and other factors continue to impact commercial property. It has been reported that HSBC is looking for a new, smaller London office as it embraces working from home. The bank’s current London headquarters are in 45 storey Canary Wharf tower, but it is reportedly seeking to cut its office space by 40%. Law firm Clifford Chance also recently left Canary Wharf and relocated to a smaller office in the City. Meanwhile, Cineworld is reportedly set to close 130 of its cinemas in the UK and Ireland, including 25 branches in London. Cineworld entered into administration in the US in 2022 and has so far struggled to secure a buyer. There is however some more positive news, with Avison Young reporting that professional service firms have acquired a record amount of office space in central London and data from Savills indicating a commercial real estate investment boom for the City in January. Meanwhile, asset manager Pimco has signed a deal with Derwent London to let additional space at a new office building on Baker Street. PROFESSIONALISE OR PERISH?The social housing sector is facing yet more pressure to improve its performance. Levelling Up Secretary Michael Gove has tabled further amendments to the Social Housing (Regulation) Bill, this time requiring social housing managers to gain formal professional qualifications ‘under new rules to protect residents and raise standards in the sector.’ An estimated ‘25,000 managers across the sector’ will be required to have a housing management qualification, regulated by Ofqual, ‘equivalent to a Level 4 or 5 Certificate or Diploma in Housing, or a foundation degree from the Chartered Institute of Housing.’ As ever Inside Housing offers a good explainer of this development, which has naturally been welcomed by the CIH, though the National Housing Federation (NHF) seems to still be mulling its response. On which point, the NHF notably welcomed the HBF’s intervention on housing supply, as well as joining the BPF and others in warning that the Infrastructure Levy could backfire. The NHF’s Chief Executive Kate Henderson had her first meeting with new Housing Minister Rachel Maclean last week, describing it as ‘positive.’ LONDON STADIA LATESTChelsea FC’s plans to redevelop Stamford Bridge are ticking along behind the scenes. Over the weekend, The Times reported that members of the club’s stadium redevelopment taskforce viewed Everton FC’s stadium development site to better understand how contractors Laing O’Rourke were able to overcome difficult construction circumstances. The club has not decided whether it prefers the option of rebuilding Stamford Bridge stand by stand or demolishing it and starting over – and the site clearly presents a few obstacles to both options, particularly height restrictions and the neighbouring train lines and cemetery. The Times understands that the club are hoping to pick an option by the summer and does not anticipate completion before 2030. Meanwhile, the London Legacy Development Corporation has announced plans to cover the London Stadium’s roof with solar panels. The plans, which have the support of the Mayor, are expected to cost about £4m over two years, but the corporation believes the panels will pay for themselves after just five years by generating roughly three million kilowatts of power each year. While subject to planning permission, the corporation says work to install the panels could begin in mid-2023, with power starting to be generated by April 2024. 
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