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12 March, 2013

Stewart Baseley - Policy Conference Speech 2013

Good morning all and welcome to our 2013 Policy Conference.

It’s great to see so many of you have braved our Siberian Spring to make it here today and I hope your efforts will be rewarded by an excellent line up of speakers.

Now I always seem to say this but once again we meet at what feels like a crucial time for our industry but perhaps we also meet at a turning point.

I don’t know whether you will all agree but it seems to me as I go around the country meeting our members, there is a definite sense of optimism emerging that compares very favourably with a year ago.

Clearly the 3 major constraints that prevent us growing our businesses – issues related to demand, supply and regulation - haven’t disappeared. Far from it.

However, I do feel that over the past few months, we have seen some improvement, at least with demand and supply side issues, indicating that some of the Governments initiatives are beginning to bear fruit.

Take NewBuy for example. We met last year the day after NewBuy was launched.

At that point we had just 6 developers and 3 lenders on board. It had a somewhat difficult birth – some of you felt a bit of a premature birth.

Today we have 77 active developers and so far this New Year we are averaging over 130 reservations per week, more than double the run rate achieved last year.

NewBuy, together with  Firstbuy, is undoubtedly helping many customers who only have access to a 5% deposit realise their ambition of owning their own home.

The improved sales rate of NewBuy is in part because of lower mortgage rates which are now available because of the Government's Funding for Lending scheme introduced half way through last year although I am painfully aware that Funding for Lending is not doing anything to help members access development finance.

So I do think there are some positive signs on the demand side although I am old enough to recognise that consumer confidence is still fragile, things can change very quickly and we need to see a much longer run of good sales numbers before we get to carried away.

On the supply side 12 months ago we were just  a fortnight away from the introduction of the NPPF – following a long and bitter debate that had raged for months and in many ways is still raging.

As the figures we released today in our latest Housing Pipeline report show, the number of plots consented in the final quarter of 2012 was at a 5 year high continuing the upward trend we saw in quarter 3 of last year.

Clearly this needs to continue over a longer period  but the signs are positive and again, as I go about the daily business of HBF I do hear more positive comments from members about the successes they are achieving either locally through community engagement or via the appeals system.

So perhaps the penny is beginning to drop with many local authorities – not all I totally understand – that with power comes the responsibility to act appropriately and produce a sound Local Plan with a robust 5 year land supply or face the prospect of the presumption in favour of sustainable development being enforced on appeal.

Certainly ensuring Local Authorities do act  responsibly is high on our list of priorities at HBF.

That is why we established our Local Plans Team Chaired by  Peter Andrew of TW,  who is here today, and have increased our planning team so that we can make representations on behalf of the industry at local plan inquiries as they emerge.

The same group incidentally is also overseeing our work on CIL, where Savills represent us, as one of the biggest threats we see to viability are some of the frightening numbers being proposed in the  early CIL charging schedules and these need challenging very hard

So some positive signs on the planning front but a lot of work to do on local plans and CIL to ensure they can deliver.

The third issue is the one where we have probably seen least progress. Regulatory costs are increasingly making more and more sites unviable, but despite a lot of rhetoric and good intention we have seen little progress in terms of cutting red tape and the associated costs. Indeed the impression I have and one I suspect many of you share is that if anything its actually getting more complicated.                                                                                      

So our message to Govt is pretty clear. On demand and supply issues we don’t need any new policies or initiatives but we do need to work together to ensure the ones we have deliver. And as we made clear in our Budget submission which we published yesterday, we have been working hard to get NewBuy, Firstbuy and Funding for Lending extended beyond their current end dates.

At the same time Government must do much better at cutting red tape and regulation

If Government is serious about helping us to grow our businesses and thus play our part in   increasing housing numbers it needs to build on the positive trends we have recently seen emerge, help small and medium size businesses access finance  and remove or reduce as many of the barriers that exist which frustrate us and  prevent us achieving our objectives

If it does, then when we meet again in another 12 months, we may be talking about tangible positives in terms of bricks being laid, instead of emerging positive sentiments.

Thank you.

 
Stewart Baseley
Executive Chairman