Top stories this week *Sir James Crosby: interim report on mortgage finance markets....read more *Nationwide House Price Index: House price falls continue in July .....read more *HBF brief No.10 officials.....read more *BBC feature HBF call for housing market action.....read more Friday, 1 August 2008Top stories this weekSir James Crosby: interim report on mortgage finance markets....read moreNationwide House Price Index: House price falls continue in July .....read moreHBF brief No.10 officials.....read moreBBC feature HBF call for housing market action.....read moreQuick LinksEconomic NewsHousing Market NewsIndustry NewsGovernment NewsHBF NewsEventsEconomic NewsHBF acts with CML coalition to press for action on mortgage financeFollowing earlier discussions, HBF, along with 11 other mortgage finance and housing organisations, signed an open letter coordinated by the Council of Mortgage Lenders to the Treasury that was published in the Financial Times on 26 July, to call for urgent action to restore wholesale funding to the mortgage market.View here Sir James Crosby: interim report on mortgage finance marketsOn 9 April 2008, the Chancellor announced that Sir James Crosby would provide advice to the Government on options for improving the function of mortgage finance markets, working closely with mortgage industry experts. Sir James published an update to Chancellor on 29 July 2008. His final report and recommendations are due in the autumn.View the HBF member briefing regarding this report Download the Crosby Review Interim Analysis to topHBF's reaction to Crosby HBF issued a press statement expressing disappointment that Sir James Crosby had not recommended urgent action to free up the supply of mortgage finance. HBF Director of Economic Affairs, John Stewart, said: "If the Treasury does not take up any recommendations from Crosby until the Pre-Budget Report in October or November, this will unduly prolong the frustration of those - particularly first-time buyers - who are currently having difficulty obtaining mortgages to buy their own home. The benefits of action will not be realised until Spring 2009 at the earliest - seven or eight months from now. This is too big a price to pay as in the meantime steeply falling housing transactions, weakening house prices and sharply lower house building activity risk damaging Britain's wider economy." CML response to Crosby The CML also urged the Treasury to work with urgency on measures to address the mortgage funding gap, whether through the industry's suggestion of a market-led solution to incentivise investors via a repo facility, or through other mechanisms as outlined in the report. CML director general Michael Coogan commented:"As the Bank of England lending figures today [29 July 2008] show, the mortgage market remains severely constrained. In aggregate, lenders are unable to meet the consumer demand for mortgages because there is not enough funding available to them. Without action, the situation in the housing market will be worse than it needs to be. The housing correction will overshoot, and the knock-on effects on the wider economy will be significant."Today's analysis at last sets down an independent welcome marker that intervention to address the mortgage funding gap is both appropriate and necessary. It creates a clear expectation of measures at the time of the pre-Budget report. We now look forward to working urgently with the Treasury over the summer on proposed solutions."Read more And the NAEA and BPF...Peter Bolton King, Chief Executive of the National Association of Estate Agents (NAEA) said:"Whilst we welcome the fact the government has acknowledged that there is a problem in the marketplace by commissioning this report we are concerned that the report is not placing a heavy emphasis on immediate action to help ease the significant problems in the mortgage market.Read more For the British Property Federation, Ian Fletcher, Director for Residential Policy, said: "The government should leave no stone unturned in seeking solutions to reviving the mortgage market as it is critical not only to lenders and potential borrowers but the wider economy. The Council of Mortgage Lenders has put considerable thought into a potential solution and we support its call for the government to give both serious and rapid consideration to its proposals."Read more Bank of England publish lending to individuals statistics for June 2008The increase in total net lending to individuals in June (£4.0bn) was below the increase in May and the previous six-month average. The twelve-month growth rate slowed further, to 7.4%, and the three-month annualised growth rate fell by 1.1 percentage points to 4.5%.Within the total, the increase in net lending secured on dwellings (£3.1bn) was below the increase in May and the previous six-month average. The twelve-month growth rate slowed further, to 7.5%. The three-month annualised growth rate fell by 1.2 percentage points to 4.3%. The numbers of loans approved for house purchase (36,000), remortgaging (84,000) and other purposes (45,000) were all lower than in May. Loans for purchase are down 68.4% compared to a year ago.The increase in net consumer credit in June (£0.9bn) was below that in May and the previous six-month average. Net credit card lending rose by £0.4bn, below the increase in May. Net other loans and advances increased by £0.4bn, also lower than the May increase. The annual growth rate of consumer credit slowed by 0.2 percentage points to 6.8%; the three-month annualised growth rate fell by 0.6 percentage points to 5.7%.Download a copy of the report CBI: Summer sales bring no relief for troubled high streetThe summer sales have so far failed to lure shoppers back onto the high street, as sales volumes in July fell particularly sharply, while the outlook for August remains bleak, the CBI said this week.61% of respondents to its latest Distributive Trades Survey reported that sales in the first half of July were lower than a year ago, while 25% said sales had increased.The resulting balance of -36% was the weakest since the survey began in 1983, and confounded expectations of a gentler decline (-7%). A similar fall in sales volumes is expected in August (-32%).The three-month moving average of sales volumes, which smoothes out monthly volatility, continued on the downward trend which started last summer. The balance of -20% was the weakest since November 2005 (-26%).Sales for the time of year were reported as poor by a balance of 46% of firms, which was worse than expected (-17%), and similarly poor sales are predicted in August (-37%).Read more to topHousing Market NewsNationwide House Price Index: House price falls continue in July The Nationwide House Price Index released this week reported that:The price of a typical house fell by 1.7% in July The price of a typical house is now £15,000 lower than this time last year Housing purchase activity reached a new low Weakening economic conditions raise the likelihood of earlier interest rate cuts Commenting on the figures, Fionnuala Earley, Nationwide's Chief Economist, said:"The price of a typical house fell by 1.7% in July, bringing the annual fall to 8.1%. This brings the average price to £169,316, almost £15,000 less than this time last year and its lowest level since August 2006. House prices have now been falling for nine consecutive months, but on average are still almost £11,000 higher than three years ago."Download a copy of the Index to topHometrack: House prices down by 1.2% over JulyHometrack reported that July saw the tenth consecutive monthly fall in house prices. Average house prices were down by 1.2% over the month, compared to a 1% fall in June and a net 4.4% fall over the last 12 months - this represents the lowest annual rate of growth since the Hometrack survey began in 2001.The proportion of asking price being achieved has also slipped back from 91.6% to 90.9% over the last month. On a regional basis pricing is weakest in London and the South West (90.2%) and highest in Yorkshire and Humberside (92.4%). Meanwhile the time taken to sell property has increased to 11 weeks - this compared to just 6.5 weeks in June 2007.Read more to topIndustry NewsNHMB survey reveals 9 out of 10 still believe in home ownershipAccording to a new YouGov survey commissioned for the New Homes Marketing Board (NHMB) the vast majority of Britons still want to invest in homes of their own despite the current economic situation. David Pretty CBE, chairman of the NHMB commented:"Current problems in the housing market are essentially the result of the lack of liquidity in the financial markets rather than simply a cooling housing market and reduced demand. As our poll shows, this lack of mortgage finance is artificially reducing the market well below even current demand. This is having serious consequences both for the housing industry but also many thousands of buyers, particularly first-timers."Mr. Pretty said the industry is urging the Government and the Council of Mortgage Lenders to do everything to improve liquidity and mortgage availability, stating: "I am again calling for first-time buyers to be exempt from Stamp Duty up to £250,000. Stamp Duty has become a totally unfair tax on those who can least afford it. I am also repeating my call for the setting-up of a National Homes Deposit Savings Scheme. This will actively encourage youngsters to save for their deposit well in advance, with a 25% tax free contribution from Government on top of their savings."These measures will not in themselves solve the current crisis but will be a great boost to the confidence of first-time buyers, helping them to take advantage of the present market conditions, and could well be a first step on the road to a housing recovery." Read more View the YouGov survey results NHF: Average house prices to rise by 25% by 2013The average house price in England will rise by 25 per cent over the next five years to reach £274,700, despite fears of a housing market crash - according to a new report published by the National Housing Federation.The document - researched by independent economists Oxford Economics - forecasts that house prices will fall in 2009, start to recover in 2010, and then rapidly increase from 2011.The paper, entitled Home Truths 2008, says that house prices will increase by:5.2% in 2011 9.2% in 2012, and 9.3% in 2013 - with the typical price at the end of the period being well above the average in 2007 of £222,600. In the short to mid term, it says house prices will: Fall by 2.1% in 2009, and Increase by 1.3% in 2010. The report underlines that while underlying demand is growing, supply of new housing is currently falling, leading to pent up price pressures in future. Read more Download a copy of Home Truths 2008 to topGovernment NewsCLG consultation regarding including a Property Information Questionnaire (PIQ) as a mandatory part of HIPsA consultation is underway into including a Property Information Questionnaire (PIQ) as a mandatory part of HIPs. The questionnaire has been developed with property industry stakeholders and is designed to provide information that buyers want to know while being easy for sellers to provide without professional help. Housing Minister Caroline Flint said:"Having the right information about a property at the beginning of the home buying process is essential if we are to reduce delays and cut down on wasted costs for both buyers and sellers... the Property Information Questionnaire will only improve on this, ensuring the buying and selling process is simpler for all."The questionnaire would include information such as:Building work carried out to the property; Information on energy and utilities; Details on parking arrangements; Council tax banding. Read more Download a copy of the consultation document The consultation is open until 30 September. Please send any comments you wish HBF to make to John Slaughter at rosie.hinchliffe@hbf.co.uk by 23 September. NAEA cautiously welcomes consultation on property information questionnaireFollowing CLG's announcement that Property Information Questionnaires (PIQ) could become the new mandatory element of HIPs, Peter Bolton King, Chief Executive of the National Association of Estate Agents (NAEA) commented:"As we near the anniversary of the launch of HIPs, it is clear that the original objective of supplying relevant information to the consumer, at the right time and the right cost has been a failure. One of the biggest issues faced by our members with regards to HIPs is the problems of supplying information on local searches and leasehold, therefore the CLG's consultation on whether a ‘questionnaire' should be included is interesting and perhaps will go some way to addressing the information a prospective purchaser might require. However, it will only be of value if it is considered as part of a full review of the current HIPs legislation which is not working. The NAEA has consistently stated that they do not help the buying and selling process, do not stop sales falling through and do very little, if anything, to speed up the transaction. It is this lack of certainty that needs addressing and HIPs will never help this."Read more Energy Minister Malcolm Wicks approves plans to open up the Microgeneration Certification Scheme (MCS) to a number of certification providersBuilding on a two year development phase, Energy Minister Malcolm Wicks has approved plans to open up the Microgeneration Certification Scheme (MCS) to a number of certification providers to give the industry more options when seeking approval for products and services. The MCS aims to build a sustainable microgeneration industry based on quality and reliability, to provide consumer confidence that products and installers meet, and continue to meet, robust standards. Read more Supporting the Regions - a joint response to changing economic circumstancesThe Chief Secretary to the Treasury, the Rt Hon Yvette Cooper MP, launched a new programme of regional engagement, consulting on how various agencies can work together to provide a strong regional response to the changing economic circumstances, and provide support for regional business and households. The launch also provided the opportunity to seek advice from regional and local partners on the investment priorities for over £22bn of regional economic development to be spent across England over the coming years.Yvette Cooper commented:"Global economic problems mean that businesses and families in every region will face tougher times ahead, but our regional economies are much stronger now after years of investment and growth. So we are determined that Government, along with regional and local agencies, will work to ensure that businesses and households get the support they need. Looking ahead, we need to continue to make the investment that has supported regional regeneration and growth in the past, to ensure that growth continues well into the future."Read more to topHBF NewsHBF brief No.10 officialsJohn Stewart and John Slaughter held a further meeting with officials at 10 Downing Street to update them on market conditions and discuss possible actions to assist the industry - including the problems in the financial markets affecting mortgage lending. HBF made the case for considering the ideas put forward with the CML for prompting a reopening of investment in wholesale funding for mortgages as well as the other measures previously put to Government by HBF.to topBBC feature HBF call for housing market actionBBC TV and radio national news bulletins ran HBF's call for Government action to assist the housing market as one of their top stories yesterday (Thursday) evening following publication of the Nationwide Index and the Bank's mortgage figures. The reports featured recorded comments from John Stewart, HBF Director of Economic Affairs, on the scale and implications of the slowdown.Watch again John Slaughter, Director of External Affairs at HBF, separately took part in a discussion on Radio 4's "You and Yours" programme on Thursday this week, looking at the variety of reports about how the credit crunch is affecting the property market.Listen again to topEvent NewsHBF Annual Planning Conference 2008Wednesday 10 September - The Kassam Stadium, OxfordThis year's conference will discuss the combined challenges of climate change and the new planning act. The day is designed to provide delegates with both vital knowledge from the plenary sessions and practical guidance through our interactive workshops on the Community Infrastructure Levy and the PPS1 supplement on Climate Change.For further information please contact the events team on 020 7960 1646 or events@hbmedia.co.uk Housing Market Intelligence15 October - Savoy Place, LondonThe annual Housing Market Intelligence conference is the housebuilding industry's leading event for discussion of the strategic and macro issues facing house builders and is a must for anyone involved in the business of house building.For further details please contact the events team on 020 7960 1646 or events@hbmedia.co.uk HBF Technical ConferenceWednesday 12 November, University of York2008 has seen the government propose major changes to the way that Building Regulations are enforced. With many regulations under consultation, it is important to keep informed of the current and future legislation. The morning section of the conference will provide delegates with up to date information on Parts G & L, the Code for Sustainable Homes as well as examining the future direction of travel for building regulations.The afternoon is to be devoted to the delivery of Zero Carbon Homes with the agenda to be set by the new zero carbon hub. For further details please contact the events team on 020 7960 1646 or events@hbmedia.co.uk to topRosie HinchliffeView Previous Weekly News Summary
