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Headlines 01/07/2014 House prices pass 2007 peak Average prices in the UK have passed their pre-recession peak, with prices in London now 30% higher and with house price-affordability ratios at an all-time high. The Nationwide chief economist said that he expected prices in the capital to rise strongly for the next 6-12 months and then drop back to rate of earnings growth for the longer term. Wishful thinking! Cultural heritage recognised for first time as a strategic resource for Europe The European Council of Ministers has, in a significant announcement, recognised cultural heritage as a strategic resource for Europe. It has called on Member States and the European Commission to take a series of actions to support and enhance the sector, including through the Europe 2020 strategy, which is important as the strategy allocates significant spending to sectors. The Council stated that cultural heritage ‘cuts across several public policies’, including agriculture, regional development, environment and tourism. Farming European Parliament Agriculture Committee remains strongly pro-farmer The Committee is expected to remain pro-farmer, with a very farmer-orientated Italian chairman, despite the Parliament’s two largest political groups, the centre-right European People’s Party (EPP) and centre-left Socialists & Democrats (S&D), losing their majority on the Committee, meaning that they will be reliant on the support of other factions to get policies agreed. Culling infected herds is only way to control bovine TB, according to mathematical epidemiology Badger culls will not prevent an increase in the number of infected cattle, according to research by Warwick and Cambridge universities, published in Nature. The Government has rejected the findings. The authors responded by saying they were just producing scientific evidence on the effectiveness of different approaches. Prof John Krebs, a leading thinker on TB and professor of zoology at Oxford, said that the paper gives further support to the view that culling badgers is not an effective strategy for controlling TB. Energy ministers back plans to cap the amount of crop-based biofuels European energy ministers have said that a maximum of 7% of crop-based biofuels, such as biodiesel from rapeseed, can count towards the EU’s 10% goal for renewable energy in transport. The proposal aims to phase out agro-fuels that are seen to harm food security and the environment. House of Commons Committee wants Government to promote GM crops The EFRA Committee has said that Government should lead a public debate on the potential beneficial impacts of growing GM crops in the UK. Property Issues Land Registry sell off scrapped Plans to privatise the Land Registry have been abandoned after a revolt by civil servants. Scottish shale reserves ‘modest’ A British Geological Survey report estimates that there are 80 trillion cubic feet of gas and 6 billion barrels of oil in the Midland Valley in the Scottish lowlands. This compares with 1,329tn cu ft in the Bowland-Hodder shale across northern England. The amount that is commercially recoverable is likely to be a lot lower than these estimates; if 5% of the Scottish shale gas reserves could be recovered, it would be the equivalent of one year of UK consumption. Strategic Forum for Scotland’s Historic Environment This new forum, the membership of which has just been announced, will provide strategic advice on the management and promotion of the historic environment and oversee delivery of the historic environment strategy, Our Place Our Time. Shop rents rise for first time since 2008

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Average rents for shops in prime locations rose by 1.9% in the year to June 2014, according to Colliers, although mainly driven by London, and they are still an average of 12% below pre-recession levels. Conservation covenants proposed by Law Commission for England and Wales The Law Commission is recommending introducing a new statutory scheme of conservation covenants and has published a draft Conservation Covenants Bill. A conservation covenant imposes an obligation on a landowner and future owners for the public good. The agreement is between the land owner and a ‘responsible body’, which is the Government, a public body, charity or local authority. The covenants can contain both restrictive and positive obligations. Potential uses include philanthropy, securing heritage and community assets, alternatives to purchase by conservation organisations, disposals by conservation organisations, and payments for eco-system services and agri-environment schemes and biodiversity offsetting.

Scottish National Planning framework The Scottish Government has published the third National Planning Framework (NPF3), which sets out a spatial plan of how the Government sees economic development, regeneration, energy, environment, climate change, transport and digital infrastructure over the next 20 to 30 years. The NPF says that windfarms should not be built on land classed as a national park or national scenic area, which is 19% of Scotland, but does not preclude them on wild land. New measures on fracking require locals to be consulted and for buffer zones to be set up between any such sites and communities in a bid to reduce the impact. Scottish Agricultural Holdings Legislation Review Group has published an interim report The report sets out the progress of the legislative review. It sets out the remit and scope of the Review and identifies the main challenges to the sector, which are a low proportion of rented land, short leases, severe constraints on investment, and the balance of rights and risk for tenants and landlords. The final report will be published in December. House of Commons Public Accounts Committee report on tax reliefs The Committee concluded that there is a lack of transparency and accountability for tax reliefs and no adequate system of control following their introduction. It has recommended that the Government sets out clear proposals on how to improve the management of their cost and performance. Agricultural Property Relief and Business Property Relief are specifically mentioned as reliefs that had increased significantly since 2000. Residential Markets

• The Government’s Help to Buy scheme broke Treasury rules when it was set up because alternative options were not considered, according to the House of Commons Public Accounts Committee, which also said that it should be tailored for different parts of the country.

• Mortgage lending in May was £16.5bn, the same as April and 12% higher than a year ago. However, it is lower than anticipated as fears of an interest rate rise give buyers cold feet (Council of Mortgage Lenders)

• The Bank of England has proposed a cap on the number of home mortgages that banks can make at high multiples of borrower income in an attempt to stop a credit boom. It has recommended that residential mortgages that are more than 4.5 times a borrower’s income must not account for more than 15% of total lending. Nationally, 9% of new loans are at 4.5 times income or more, but in London this figure is 19%, according to the Council for Mortgage Lenders. The proposals are being consulted upon.

• Mortgage approvals dropped by up to 10% in May, to 61,000, which is below the 70,000 recent six-month average (Bank of England). Banks expect the demand for mortgages to grow in 3Q2014 but the approval rate to fall significantly because of the tighter rules on mortgages introduced in April. (Bank of England credit conditions survey)

• Estate agents have 27% fewer houses for sale compared with a year ago. This has increased competition between buyers, and contributed to 19% of properties being sold for more than the asking price (NAEA, May)

• One of the obstacles to a Mansion Tax has been removed after ONS statisticians showed that only 1% of poor British households (those in the bottom 40%) live in very expensive properties (more than £2m). This answers the question about the asset-rich, cash-poor households which has dogged the proposals since they were proposed. Labour and the Liberal Democrats have also suggested that

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elderly people on low incomes could make any liabilities payable at death, rather than being faced with an annual charge.

• Buildings insurance costs have spiked upwards for properties at flood risk that are not covered by the proposed Flood Re scheme, which only covers some buildings. (British Insurance Brokers' Association)

Environment EU woodchip energy plan unsustainable, say studies EU plans to increase use of wood pellets and biomass risk exacerbating the problems of rising greenhouse gas as demand is likely to surpass the amount that can be extracted sustainably from European forests, thus releasing carbon. The amount of land that could be used for energy crops without displacing food or damaging valuable habitats is 1.3 million hectares, five times less than the demand expected by the EU, according to the Institute for European Environmental Policy. European soil regulation finally buried The EU has dropped its proposals for an EU-wide soils directive following 8 years of opposition, including from the UK, which feels that it is an issue better managed at national level. And finally… Nottingham pupils in Great Escape-style break out Five 14 year old students used knives, forks and spoons from the canteen to dig their way under a 15ft metal fence at the Djanogly City Academy. They were ‘recaptured’ and "spoken to" about their bid for freedom, reports the Nottingham Post. Assistant Head Andy Roach asked staff to be on the lookout for more escape attempts. Pupils aged under 16 are not allowed out of the grounds without permission during the day.

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)