好色先生TV

Housing

There was no question investors had delivered their verdict on the housing market by Tuesday lunchtime. Listed housebuilders were hit hard on the London Stock Exchange last Friday and Monday following the vote - with prices down on average 18% on Friday, then 15% further on Monday - although they were rallying a few single-digit percentage points on Tuesday. This is because experts are predicting a drop in house prices and transactions in the uncertain months to come. JLL and KPMG are predicting around a 5% drop this year and next.

Tony Williams, analyst at 好色先生TV Value, said he鈥檇 鈥渘ever seen anything like this鈥� and the share price reaction suggested a 鈥渃atastrophic鈥� shock was in store for the housing market. But in reality, while Williams expects a slowdown, he said the underlying dynamics were better than the stock market reaction suggested due to chronic under-supply of homes in the UK, a sentiment backed up by Redrow in a trading statement designed to reassure its jittery investors on Tuesday. On a brighter note, the devaluation of the pound could actually attract foreign buyers to buy bargain property, particularly in London.

Infrastructure

HS2 and airport expansion in the South-east could be the two biggest infrastructure casualties from a Brexit. This week a Birmingham MP, Liam Byrne, warned HS2 - already behind schedule and over budget according to the National Audit Office (see previous page) - could be the first project to go if the economy crashes and the Treasury鈥檚 finances are hit. Meanwhile, Tory leadership frontrunner Boris Johnson is a strong opponent of Heathrow expansion, a programme that would have been swiftly approved by government this summer if the referendum had gone the other way.

Some commentators have also questioned whether the Hinkley Point C nuclear power plant in Somerset 鈥� planned by French state-owned energy giant EDF 鈥� could also be under threat after the UK exits the EU. A market source close to the project told 好色先生TV EDF has reiterated its public message to the market that Hinkley is not under threat because of the vote to Leave. But the source added: 鈥淭he project is still questionable 鈥� if there鈥檚 ever a time for EDF to pull out, it鈥檚 now.鈥� Industry figures have also warned a slowdown in government infrastructure spending and decision-making could have a knock-on effect on the commercial sector. Paul Dyson, head of UK program advisory services for consultant Hill International, told 好色先生TV firms will stop investing in the UK if the government stops its investment.

He said: 鈥淚f you鈥檙e a hotel chain setting up in London, for example, it鈥檚 easier for people to move around and travel if there鈥檚 investment in infrastructure. But if the government stops investing, then they will say 鈥榳ell, why should we invest?鈥�.鈥�

Commercial

Firms involved in commercial schemes face a nervous wait as developers digest the implications of last week鈥檚 Brexit vote. Industry leaders say clients are seeking fresh advice on the viability of schemes, but there were few reports of schemes actually going on hold or being cancelled when 好色先生TV went to press on Tuesday.

In London in particular, all eyes are on the financial services firms. At the start of the week some banks were starting to execute plans to move thousands of London-based staff trading in Euros to financial centres on the continent such as Frankfurt or Paris, but there are few suggestions at this stage of an exodus. Kamran Moazami, a London-based director and tall building engineer at WSP Parsons Brinckerhoff, said despite the shock, London still had a bright future as it would remain 鈥渃apital of the world鈥� and many of its investors were from China and the Middle East, rather than Europe.

Ann Bentley, global chair of consultant RLB, said she expected a 鈥渏udder鈥� in the capital鈥檚 commercial market, but expected a bigger impact in second-tier cities such as Manchester, where overseas investors may be deterred.

Regional investment

EU funding for regional infrastructure and regeneration projects is in doubt after the referendum result. According to the Local Government Association, about 拢5.3bn of funding in England alone is at risk. The funding is divided between local enterprise partnerships to drive regeneration projects, while money is also set aside for infrastructure improvements, mainly road upgrades.

Matthew Lugg, vice-president of the Chartered Institute of Highways and Transport, says local road maintenance budgets could be hit the most. The 拢500m Wales receives from the EU each year is also in doubt. Improvement works to the A55 in the north and A40 in the south of Wales 鈥� worth a combined 拢300m and supplemented with 拢85m in EU funds 鈥� are now considered at risk, while the future of the South Wales Metro is also in jeopardy.

The 拢2bn metro project, which would integrate rail lines across the south of Wales and allow easier access from the regions to Cardiff, was set to receive a 拢150m boost from the EU. Carwyn Jones, the Welsh government鈥檚 first minister, has said there are 鈥渉undreds of vital EU-funded projects right across Wales whose future is now in the balance鈥�.

Sustainability

The government鈥檚 sustainability agenda is also clouded in uncertainty after the UK鈥檚 vote to leave the EU. The UK鈥檚 main energy efficiency policy came from the EU鈥檚 Energy Performance of 好色先生TVs Directive (EPBD), which requires all new buildings to be nearly zero-energy buildings (NZEB) from 2021. Meanwhile the Birds Directive and Habitat Directive are among the laws which safeguard against potentially environmentally damaging developments.

Speaking to 好色先生TV in the run-up to the referendum, energy minister Andrea Leadsom 鈥� a high-profile Leave campaigner 鈥� defended the government鈥檚 decision to scrap its zero-carbon homes policy, citing the remaining EPBD target. But Richard Twinn, policy adviser at the UKGBC, said it was 鈥渦nlikely鈥� the target would be kept. He said: 鈥淭he government may well not decide to have NZEBs as nothing exists in UK legislation saying it has to meet that target.鈥� Twinn added that the government鈥檚 only binding sustainability commitment is a requirement in the Housing and Planning Act for the secretary of state to 鈥渦ndertake a review鈥� of energy efficiency measures, with no actual action required by UK law.