07/05/2014
Headlines
07/05/2014
Housing market poses the biggest threat to financial stability, says BoE chief economist The Bank’s Financial Policy Committee is considering possible responses to the threat to financial stability and, since early May, now has powers to demand lenders impose tougher affordability tests on borrowers. The chief economist said the market was not yet overheating but that the Bank ‘should be nervous’ about the pace of recovery, but would investigate whether it is a London-specific issue. Separately, the Bank’s deputy governor said that the danger signs on the housing market resembled ‘a movie that has been seen more than once in the UK’.
Private rented housing: Labour manifesto proposal to reform sector Labour has promised significant reform of tenancy legislation to tackle ‘the terrible insecurity of Britain’s private rental market’: • Three year tenancies as standard • Initial rents will be based on market value • Rent reviews will not be more frequent than once a year • Rent increases no higher than an ‘upper ceiling’, set by legislation • Landlords only able to end tenancies with two months’ notice if they have a good reason, such as rent arrears, breaches of the agreement or anti-social behaviour • An end to the typical £350 fee people pay agents to secure a tenancy Labour has also proposed increasing Council Tax charges on empty homes from 50% after two years to 200% after one year.
Farming EU to promote the benefits of Europe’s diverse farming sector This interesting proposal aims to promote the EU’s diversity of farms and agricultural produce as a major asset for the economy, job creation and the environment. The background to this is increasing competition from global competitors such as the US, Brazil and China, where farm models are very different from the EU, which relies on smaller traditional farms. The proposal will be refined but one of its central arguments is that the diversity gives the EU greater resilience against shocks.
Water Bill and reform of the abstraction licensing system: ICE supports water shares The Government is asking for feedback on two proposals for reforming the abstraction system – one is a revision of the current licensing system, called Current System +, and the other is abstractors ‘owning shares’ in their local water catchments. The Institution of Civil Engineers (ICE) supports the water shares proposal as it creates a sense of mutual responsibility among abstractors to preserve water supplies and better promote water trading during times of water stress. ICE is also calling for an over-arching strategy for water security which covers all aspects of water use – domestic, industrial, agriculture, energy generation and the environment.
BRE National Solar Centre Biodiversity Guidance for Solar Developments Solar farms can greatly enhance wildlife, particularly bumblebees and butterflies, compared with surrounding farmland, according to research on four sites carried out for this guidance document.
Who benefits from GM crops? Friends of the Earth report This new study says that claims that genetically modified (GM) crops have higher yields, reduce farmer costs and hold the key to feeding a growing world population are based on myths propagated by the biotech industry. It urges the EU to help farmers produce for local markets rather than export, use traditional seed and livestock varieties led by local communities and support local farmer organisations. Cutting meat consumption in western countries would also reduce reliance on grain crops used as animal feed.
Property Issues European Structural and Investment Funds (ESI Funds) Growth Programme, 2014 to 2020 Just as you thought you were safe from CAP reform, we are now into a consultation phase on the numerous structural and investment funds that apply in the UK, including how Rural Development funds under Pillar 2 of the CAP will operate. The UK has just submitted its overall ‘Partnership Agreement’ to the EU on its strategy, priorities and delivery arrangements for the funds, and is now consulting on their operation in the UK:
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European Regional Development Fund (ERDF) Operational Programme European Social Fund (ESF) Operational Programmes Local Enterprise Partnership (LEP) Area EU Structural and Investment Fund Strategies European Agriculture Fund for Rural Development (EAFRD) LEADER National Delivery Framework European Maritime & Fisheries Fund Community-Led Local Development
Heritage good practice advice notes on Enterprise and Regulatory Reform Act changes The Act introduced a number of changes to the legal framework protecting heritage in England from 6 April 2014 and English Heritage has now published advice notes and briefing notes on the following: • Listed Building Heritage Partnership Agreements • Local Listed Building Consent Orders • Listed Building Consent Orders • Certificates of Lawfulness of Proposed Works
Land Registry heads for sale Leaked board meeting minutes suggest the Land Registry is heading towards privatisation, either as a joint venture between the Government and a private company, or allowing a private company to run it as a ‘govco’.
New employment allowance scheme will help farms and small rural businesses A new allowance of £2,000, in the National Insurance Contributions Bill, means that a small employer can pay its first employee a salary of up to £22,400 per annum without having to pay any employer’s National Insurance Contributions. It applies from 6 April 2014. PS Don’t forget that employer’s NICs will be abolished for under 21 year olds from April 2015.
Right to build The Government is introducing a ‘right to build’ scheme under which anyone with a local connection, expected to be defined as three years’ residency, will have the right to demand to buy a plot of land from their council on which to build a home. The Government hopes 50,000 people a year will participate.
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New Bank of England (BoE) stress tests will require banks to demonstrate they can weather a housing market slump with a worst-case scenario of a 35% fall in house prices (and 30% in commercial property prices) if interest rates rise sharply. Although it is only a hypothetical test, analysts have said that such a slump is unprecedented in recent decades. A KPMG / Shelter report says that rising housing costs and an affordable homes shortage is making ownership ‘a fairy tale’ for 20-34 year olds. It suggests letting councils create New Homes Zones, establishing a National Housing Investment Bank, giving small developers government guarantees and charging council tax on unbuilt homes to make house builders speed up developments.
And finally…
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Whilst every effort has been made to ensure the accuracy of this briefing, its information may not be comprehensive and recipients should not act upon it without seeking full professional advice. If you have queries regarding any of the articles, please contact jason.beedell@smithsgore.co.uk (01733 866562) or andrew.teanby@smithsgore.co.uk (01522 507310)
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