Emma Sharp of RICS
"We have serious concerns over the eco-town project for a number of reasons..."
Emma Sharp, new head of Public Policy & Communications for RICS in the East of England talks about the construction industry, the housing downturn and what can be done to resolve the ongoing issues.
In addition, Emma will be writing a monthly blog for the Business Weekly website so if you would like to come up to date with property market, check back regularly. BACKGROUNDER RICS – The Royal Institution of Chartered Surveyors – is the pre-eminent organisation of its kind in the world. Its members are offered the best advice on a diverse range of land, property, construction and related environmental issues. As part of its role, RICS helps to set, maintain and regulate standards. They also provide impartial advice to governments and policy-makers. RICS has 140,000 members globally and operates out of 146 countries, supported by an extensive network of regional offices located in every continent around the world. It is governed by a Royal Charter approved by Parliament which requires it to act in the public interest. It is also a professional regulatory body approved by Government (HM Treasury).
1. Do you view the current housing downturn as a long-awaited correction or something more severe and long-lasting? The key issue here is a lack of mortgage liquidity and with no sign of a solution to this the housing market will be slow to show any sign of recovery. Whilst the government announced changes to stamp duty policy last week this will do little to reinvigorate the market. 2. When do you see things in the housing market improving? It will take time and action to solve the liquidity issue but once this eases the market should pick up fairly quickly. After all demand for housing is very high – especially in some key areas of the East of England region. 3. What role - if any - can RICS play in mitigating the effects of the housing downturn? RICS has a key role to play in suggesting evidence-based policy changes to government. Recently we suggested a raft of measures, which we believe the government should implement to kick start the market. These include; a stamp duty holiday, followed by the introduction of a fairer marginal stamp duty rate and reducing VAT on repair and maintenance in order to bring more empty homes back into use. 4. The Government recently announced a package of measures designed to reinvigorate the housing market. What effect will they have and could the govt be doing more? We don’t believe that the government’s measures will be enough to reinvigorate the market. The current problems need to be tackled from all angles and the RICS has shared its thoughts with the government on this. 5. Is there a danger that with the construction industry shedding hundreds/thousands of jobs at the moment that the basic skills base needed to carry out vital infrastructure projects will be eroded? This is an interesting issue. Even before the downturn there was widespread acknowledgement of skills shortages within the industry. There is the danger that with large scale lay-offs skills shortages will become even more critical when the market does eventually pick up again. 6. Is the London Olympics coming at a bad time from this point of view? Large scale public sector projects linked to the 2012 Olympic Games, including the East London Line and Thameslink, could dip further into the public purse. Raw materials and labour costs have risen by 12.2 per cent over the past year and, with costs forecast to rise by a further 12 per cent over the next two years, this could impact on preparations for the Games. 7. Is the Government's eco-towns project doomed to failure given the fierce local opposition we have seen in this region and the state of the construction industry more generally? We have serious concerns over the eco-town project for a number of reasons, including lack of adequate infrastructure and reliance on the private car. What with major stakeholders such as Tesco and the Wellcome Trust pulling out of local plans, I suspect that the future of eco-towns will be called into question. 8. To what extent is the construction industry embracing the trend towards sustainability in your view? I suspect that at the moment, the construction industry is trying to weather the storm and sustainability may not be at the top of their list of priorities. However, the government has set ambitious energy efficiency building regulations and the industry will have to focus on meeting these requirements in due course. 9. Should the UK banking sector be doing more to stimulate the housing market in your view? The banking sectors hands are tied to some extent due to the global nature of the credit crisis. However, RICS believes that action needs to be taken immediately and that the Government should incentivise the issuance of new mortgage backed securities and covered bonds by allowing investors who buy them to enter into a repurchase arrangement with the Bank of England. 10. Are there any lessons that the industry can learn from the current downturn or is it down to factors outside its control? Much of the current turmoil is down to factors out of the industries hands; however I am sure that many lessons will be learned during this period of upheaval.