Property confidence hits a new low

Not much happens in the summer but it does give people time to take stock. Grant Thornton have just published their latest International Business Report which among other things takes a snapshot of business confidence. It makes grim reading:

The level of optimism amongst UK privately held businesses (PHBs) has plunged by 57% in the past twelve months, taking the Grant Thornton International optimism/pessimism barometer to an all-time low.

The figures released today form part of Grant Thornton’s International Business Report (IBR), which canvassed 7,200 business across 36 countries. In the UK it sought the opinions of CEOs, MDs, Chairmen and senior executives of 600 large and medium business.

67% of UK PHBs have a slightly or very pessimistic outlook for the economy in 2009 compared to a mere 20% that declare any optimism. The UK’s result is the most pessimistic recorded since the survey began in 2003 and places it firmly in the bottom ten internationally.

The number of senior executives expressing pessimism was highest in construction and real estate companies (80%), retail (72%) and manufacturing (67%).

Not surprisingly construction and property is furthest into the doldrums with little to get excited about until at least the autumn. We can probably expect that September will see some relaxation of finance to business and consumers but it looks like being a long heard slog and it’s difficult to predict if there will be any recovery.

It’s quite likely that this is it for the foreseeable future so we had better get used to it.

China gives 50% – 70% subsidies to solar projects

China’s Ministry of Finance has unwrapped plans to subsidise half the cost of building independent solar-array projects in the country, including new power transmission and distribution systems to link projects to the grid.
The subsidy will stretch to 70% for solar projects in remote regions with no current power supply, as the country continues searching for ways to create demand for its domestic PV industry. In order to qualify, solar projects must be built within one year, and the Chinese government says it seeks to build 500 megawatts (MW) of capacity over the next three years. Initially it will put a cap of 20MW on the subsidies given to projects in any one province in order to ensure the industry is spread throughout the country. Earlier this year the Ministry of Finance gave the Chinese photovoltaics industry a shot in the arm when it announced a feed-in tariff of 20 yuan ($2.93) per watt for building-integrated projects.

What an airbrained idea!

This Shorts 360 small commuter aeroplane has been saved from scrapping and put to use as a classroom at Kingsland Primary School in Stoke.

Genius!

Eco towns – new towns with a green veneer?

Tomorrows announcement that there will be another ten eco towns must be taken with a pinch of salt.

Eco towns are a key Government regeneration and housing policy but so far we have yet to see a single one come to fruition. Since the idea was muted in 2007 there have been around fifty locations promoted, most of these on in-use airfields and military bases. These were whittled down to fifteen sites and many of these are rapidly falling by the wayside, but more of that in another post.

Let me declare an interest here because I have a private pilots license and I develop and promote development, so I have a foot in two conflicting camps. I’ll try to be objective.

Airfields sit in a strange planning limbo where they are usually classed as brownfield land (i.e. previously developed land) but 99.99% of them are actually huge undeveloped green spaces in the middle of the British countryside.

Let’s call them what they are. Eco towns are new towns that won’t stop at 15,000 new homes. They will need road infrastructure (dual carriageways) retail ( hypermarkets) and employment (factories). They are serious developments promoted by serious money.

Eco towns maintain the illusion of meeting brownfield development targets while creating enormous new-towns in the greenbelt. I cannot think of any other circumstance where building tens of thousands of new homes in the middle of nowhere would be permitted and actually encouraged by the planning system. All new development schemes will need to meet ‘eco‘ standards anyway even if they are in a city centre.

So what’s driving this initiative?

I suspect that the answer is local politics and finding the line of least resistance to change. Experience says that most airfields have a vocal minority of local residents who find the passing of a few Cessnas more annoying than the noise of traffic, lawnmowers, agriculture and all the other racket in our not so quiet countryside. It seems that perception plays a large part in this issue but as the case of the former airline pilot who moved next to Kemble Aerodrome and then tried to get it closed down shows, objections can come from the most unexpected quarters.

Objectors should carefully consider the alternatives though. An airfield may be seen as a bad neighbour but they should consider that two hundred acres of mainly green and quiet space is probably a better option than 15,000 new homes and twenty years of building site muck and disturbance.

Genuine engagement with all sorts of local interests must be a priority for all parties. Government targets must not be the main focus because there is a more rounded package to look at. That might well conclude that a new town needs to be developed but the current locational focus is more about where ‘brownfield land’ is available rather than whether the land is actually in the right place.

Sites are often owned and promoted by large organisations including some that consider themselves to be especially ethical such as the Co-Operative Group with their scheme to redevelop Leicester Airfield. It’s certainly an interesting scheme that is shot through with environmentally sound ideas but the fundamental issue remains… should it be there at all? Who benefits apart from the Co-Op and Government statistics?

Perhaps a thin green veneer is all it takes to push something through but on the other hand perhaps we all need to wake up to how policy is being implemented while being realistic that something urgently needs to be done to house the growing population. We need twenty two thousand new homes a year but we are building around seven thousand. We really need an honest look at how the entire nation operates and how we are going to house and feed people in future.

Are new eco towns on airfields the answer to our housing problems? I’m not convinced. There seems to be little that is ecological about building on fields in the countryside. Skylarks, hares, badgers and kestrels will be replaced with moggies and guinea pigs. The foxes will no doubt approve of their new urban status though.

One thing is for sure, some people might get more than they bargained for when they complained about their little neighbourhood airfield. With choices like that, who would want to be a NIMBY?