Top stories this week *Caroline Flint announces more support for affordable housing....read more *Nationwide House Price Index.....read more *NHPAU: falling house prices not the answer to affordability problem.....read more
Top stories this weekCaroline Flint announces more support for affordable housing....read more
Nationwide House Price Index.....read moreNHPAU: falling house prices not the answer to affordability problem.....read moreQuick LinksGovernment NewsHousing Market NewsIndustry NewsEconomic NewsHBF NewsEventsGovernment NewsCaroline Flint announces more support for affordable housing
Further measures designed to respond to the impact of the credit crunch on the housing market and maintain the delivery of new affordable housing, were announced this week by Housing Minister Caroline Flint.
The measures are the first part of a wider package of action the Government plans to announce this month to increase confidence and help ensure stability and fairness in the housing market.
This week's announcements include:
A new national clearing house is being set up where house builders can approach the Housing Corporation with robust proposals to sell their unsold stock for affordable housing. The Government has committed £200m so far for affordable housing providers to purchase unsold stock from house builders, which can then be used for social or affordable housing. The clearing house will enable this resource to be invested as quickly as possible, by giving developers greater certainty and an early steer on their chances of success.
Increasing flexibility on bidding for funding from the Government's £8.4bn affordable housing programme. Providers will now be able to come forward with proposals for the Housing Corporation at any time, rather than waiting for the quarterly bidding round. This will enable the Corporation to increase the pace of approvals.
Increased funding flexibility so that the Housing Corporation will now have the option to offer more of the payment to housing associations and other developers delivering affordable and social housing at the start of schemes, helping to improve providers' cash flow, encourage new starts and stimulate wider market activity.
The Government is also announcing the sixth round of the Housing Private Finance Initiative. Councils will be able to bid for a share of up to £1.87bn to build new homes or refurbish existing houses and estates.
Housing Minister Caroline Flint said:
"I am determined that we do everything possible to continue to promote stability and fairness in the housing market, and maintain our long term focus on increasing housing supply.
"There is an overwhelming case for building more housing and we must remain as ambitious as possible. But we also have to be flexible and responsive enough to adapt to the current economic climate. We have to acknowledge not only the difficulties faced by individuals and families, but by house builders too.
"My objective is to put together a package of the best possible proposals, working with industry and others to minimise the problems we currently face and create the conditions for a rapid recovery."
to topHBF statement in reaction to Government housing package announcementStewart Baseley, executive chairman of the Home Builders Federation said:
"Whilst welcoming any steps aimed at stimulating the housing market, today's announcement clearly is not enough. We have been warning Government for months now of the implications for the wider economy of not taking steps to address the situation in the housing market and the consequences of a lack of action are now becoming clear. The implications for the Government's own long term housing targets are also clear, as it is only private house builders that can deliver the much needed housing this country needs, both private and social. We will continue to work with Government on the further measures they mention in the hope that they will assist in bringing much needed confidence and stability to the market."
Responding to Housing Minister Caroline Flint's proposals, London Councils' Executive Member for Housing, Councillor Jamie Carswell said:"The measures announced... echo what many in the housing sector have long called for and will go some way to addressing the serious cash flow difficulties facing many house builders.
"Local authorities are also eager to play their part in delivering the homes vital for Britain's future prosperity. Their innovation will be vital if the government is to deliver on its ambitions and build successful, sustainable communities.
"However, it is not simply a case of building more homes - we also need to address how we help more low and middle income families into the security of homeownership. In London, where stamp duty averages over £7,500, it represents a real barrier to families whose budgets are already stretched to bursting. Reducing this burden will be a great help."
to topHousing Minister outlines second phase of eco-towns consultationNew YouGov research released this week by Housing Minister Caroline Flint reveals current support for the development of eco-towns among the general public outnumbers opposition by a ratio of 5:1.
The YouGov survey findings reveal that 46% of adults support the development of eco-towns in England, compared with 9% who oppose their development. And when asked if they would support the development of an eco-town within five miles of their home, respondents still supported them by a ratio of 2:1 (34% in support; 15% opposed).
The second phase of consultation on eco-towns will involve a series of roadshows taking place around the short listed sites to provide further information to the public and listen to their views; and a further three months of public consultation on top of the detailed sustainability assessment on the potential locations; and a draft planning policy statement on eco-towns.
Shelter responds to eco-towns proposalsResponding to Caroline Flint's announcement on eco-towns, Shelter chief executive Adam Sampson said:
"Eco-towns give the Government the opportunity to provide thousands of new, affordable homes while protecting the environment. We must ensure these new homes are available for those on hard-pressed budgets, which is why Shelter is calling for at least 30% of the homes in eco-towns to be social rented, and a further 20% to be other affordable housing."
to topHousing Market NewsNationwide House Price Index: Pace of house price fall slows in JuneThe Nationwide House Price Index released this week states that:
House prices fell by 0.9% in June, less than half the rate of the previous monthPrices are 6.3% lower than this time last year, but remain 4% higher than 2 years agoHouse purchase transactions remain subdued across the UKNorthern Irish and Scottish activity levels stand out at each extremeNationwide's Chief Economist, Fionnuala Earley, commented:
"While we do not expect an early change in the Bank Rate, the implications of inflationary pressure on funding rates are more stark. The two year swap rate, which is the underlying benchmark for the most popular types of mortgage, (two-year fixed rate loans) has increased along with market expectations of increases in bank rates and this has resulted in more frequent mortgage repricing. The tightening of credit conditions over previous months along with changing expectations of house price growth and a general weakening in consumer confidence in the economy have hit mortgage demand and led to a severe slowing in levels of housing market activity. The latest data from the Bank of England shows house purchase approvals fell sharply in May, to 42,000 down from 58,000 the previous month."
Download the Nationwide House Price Index
to topNAEA continues to urge the Government to help consumers furtherFollowing the release of the Nationwide house price index, Chris Brown, President of the National Association of Estate Agents (NAEA), said:
"It is encouraging to see that the slowdown in house prices that Nationwide has reported for June has fallen to 0.9%, which is a dramatic decline from the figures reported by the company last month."
"We continue to urge the government to help the market. We have called for measures such as a stamp duty holiday for first time buyers and temporary tax relief on the mortgage interest of people's primary residence. We really want to see action from the government to ease pressure and give consumers hope for the future."
to topIndustry NewsNHPAU: falling house prices not the answer to affordability problemThe National Housing and Planning Advice Unit has published new research this week, stating that current regional housing plans would lead to worsening affordability over June.
Professor Stephen Nickell, Chairman of NHPAU, said that even if house prices were to fall by 5% this year and 10% in 2009 affordability prospects would not improve.
"With affordability stretched and mortgage finance much harder to secure and more expensive, even with house prices falling the outlook for first time buyers is very difficult in the short term. And in the medium and long term the position is just as bad. As the financial system begins to ease then the under supply of new homes implied by emerging regional plans would support the next unsustainable upswing in prices, which will leave many potential buyers high and dry - locked out of owner occupation."
to topFurther strides for homebuilders in securing fully carded workforceLatest figures released by the HBF show that members of the Major Home Builders Group companies are continuing to make great progress towards ensuring their workforces are occupationally competent and carry Construction Skills Certification Scheme (CSCS) cards.
The latest survey based on a May site audit shows that over 91% of the companies' workforces are now carrying the cards, up from 68% in October last year.
Commenting, Executive Chairman of HBF Stewart Baseley said:
"These results are a major achievement for the home building industry, and show its commitment to both creating a skilled workforce, and the workforce itself.
"The challenge for the industry now is to maintain the high standards it has set itself and ensure that people who want cards and to gain qualifications are assisted to do so. Increasing the competency of our workforce can only help our industry in its ongoing drive to improve safety and quality on all our sites".
Sir Michael Latham, Chairman, ConstructionSkills, stated:
"ConstructionSkills is extremely pleased that the house building sector is making fast progress to ensure that its workforce is able to demonstrate site competence. We want to see an industry in which all workers are fully qualified to help reduce the risk of accidents, help drive-up performance and improve quality. This positive news from the HBF shows us that we're on the right track."
RICS: UK Government must overhaul stamp duty land taxThe UK Government must overhaul stamp duty land tax radically to create a fairer system for consumers, says RICS (Royal Institution of Chartered Surveyors).
RICS proposes the abolition of the existing slab tax system, replacing it with a two tier marginal tax system. No one would pay stamp duty on the first £150,000 of a house price. Above this value a 2.5% marginal rate would be charged on every pound up to £250,000, with a 5% marginal rate applying to every pound thereafter. RICS estimate this could benefit 99% of home buyers.
RICS Director of External Affairs, Gillian Charlesworth said:
"After having mortgages pulled from beneath their feet from lenders facing the full brunt of the credit crunch, consumers are looking to the Government for help. HM Treasury needs to find a way to implement this policy or, if they can't do this imminently, to introduce a stamp duty holiday that will get the market moving."
to topKillian Pretty Review call for evidenceThe Killian Pretty Review of the process for seeking planning permission has published "A Call for Solutions" statement seeking ideas for improvement. The HBF will be seeking member input to its response via the National Planning Committee. The consultation document can be downloaded via the link below. The Review will also be holding a series of regional stakeholder events commencing on 14 July. Details of these are also available via the link.
Read more about the Killian Pretty Review
Read more about the regional stakeholder events
RTPI: Mechanistic performance targets not the answerCommenting on the Killian Pretty review RTPI Secretary General, Robert Upton, said: "It is good that the review starts with the insight that hitting mechanistic performance targets does not mean that applicants are necessarily receiving the service that they want."
"We agree with the CBI on the importance of the totality of the process - how it works for all applicants from beginning to end. And we welcome the Killian Pretty team's recognition of the importance of the new spatial planning as set out in PPS12. The focus needs to be on evaluating the likely outcomes of planning applications, how they relate to agreed local delivery framework objectives, and how effective they will be in implementation."
to topRICS UK construction market survey, Q2 2008The declining number of residential new build developments is taking its toll on the construction sector with workloads falling at the most dramatic rate for over a decade, says the RICS UK Construction Market Survey.
Construction workloads declined at their fastest pace since Q3 1995 breaking more than 11 years of uninterrupted growth with 19 percent more Chartered Surveyors reporting a fall than a rise.
In the private housing sector workloads declined at the fastest rate in the survey's history (Q2 1994) with 39% more Surveyors reporting a fall than a rise.
Regeneration makes 'slow progress' according to Public Accounts CommitteeAttempts to improve run-down areas in the North and the Midlands have met with little success, it has been claimed by the House of Commons Public Accounts Committee.
In its report the Committee found that Communities and Local Government (CLG) had failed to engage with local communities when rolling out their £2.2bn Pathfinder programme in areas of low housing demand.
In addition, attempts to turn neighbourhoods into mixed-tenure areas had resulted in many poorer families being priced out of the market.
to topEconomic NewsBank of England release results of the Credit Conditions Survey for Q2 2008The Bank's latest Credit Conditions survey noted that "lenders reported that their expectations for the housing market, the changing economic outlook and changes in their appetite for risk had contributed to the decline in credit availability."
Michael Coogan, Council of Mortgage Lenders (CML) director general, commented:
"Neither the cost nor the availability of wholesale funds has improved for lenders since the Bank of England launched its special liquidity scheme, helpful though that scheme is. This means that cost and availability to customers has not improved either. And this in turn means that consumers are now beginning to give up and demand is falling, with confidence in the housing market falling with it.
"The problems currently being experienced by house builders amply illustrate the lasting damage this can inflict on the wider economy. But it is not too late to take steps to address the fundamental problem, which is the lack of funding available through wholesale mortgage funding channels. We urge James Crosby and the Chancellor to implement the necessary policies to achieve this objective."
In terms of recent activity levels, the survey also found that:
The increase in total net lending to individuals in May (£5.4 billion) was below the increase in April and the previous six-month average. Within the total, the increase in net lending secured on dwellings (£4.1 billion) was below the increase in April and the previous six-month average .The twelve-month growth rate slowed further, to 8.2%. The three-month annualised growth rate fell by 1.1 percentage points to 5.7%. The numbers of loans approved for house purchase (42,000), remortgaging (90,000) and other purposes (47,000) were all lower than in April.The increase in net consumer credit in May (£1.4 billion) was above that in April and above the previous six-month average.Download the Credit Conditions Survey results
to topBank of England releases Housing Equity Withdrawal (HEW) statistics for Q1 2008The Bank of England estimate for HEW for 2008 Q1 is £5.0 billion, £2.3 billion lower than the revised estimate of £7.4 billion for 2007 Q4.
Quarterly Survey of Landlords and the ARLA Review and IndexThe Association of Residential Letting Agents Review shows a rate of return on investment from the cash purchase of investment property of 10.82%, averaged across all regions, and for a geared purchase, the rate of return is 20.86% for an investment over five years including both capital appreciation and rental yield.
Investment landlords report that they currently expect to hold their residential property up to an average age of 17.2 years.
Investment landlords are reporting generally low Loan to Value ratios. Four out of ten have borrowings of less than 50%. A further 37% report their loans remain between 51% and 75%. Less than 2% have borrowings in excess of 90% of the value of their investments.
ARLA's Head of Operations, Ian Potter, said:
"Buy to Let landlords are confirmed as prudent investors for the long term. These investors understand the realities of the investment market they have chosen. This understanding would appear to be far greater than the understanding shown by investors in many other markets and is proving to be a bonus for the nation's housing problems. There is no one else investing in residential housing at the moment."
to topHBF NewsHBF Graduates ConferenceGraduates and trainees from across the industry gathered together for the HBF Graduates Conference at Loughborough University on 2 July.
Titled ‘The Challenges Ahead', the first half of the day dealt with Emotional Engagement with Customers. Asking attendees to explore ways they could differentiate their products from other developers and increase customer satisfaction. In the afternoon the focus turned to Working with Local Authorities, with attendees assessing the expertise and priorities from all parties and how working relationships could be improved.
Keynote speakers included Jo Bobbin from In-house Research and Training,and Linda Wright from David McLean.
to topEvent NewsWater: Regulation changes and the Code - Practical SolutionsTuesday 15 July, Thinktank, Birmingham
The Government is seeking a major step change in water efficiency in new homes.
This seminar will examine the proposals enshrined in the amended Building Regulations Part G now subject to consultation, as well as the water aspects of the Code for Sustainable Homes and ways of securing maximum points to achieve higher Code levels.
Available to book on line at http://www.hbmedia.co.uk/
HBF Annual Planning Conference 2008Wednesday 10 September - The Kassam Stadium, Oxford
This 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
to topHousing Market Intelligence15 October - Savoy Place, London
The annual Housing Market Intelligence conference is the housebuilding industry's leading event for discussion of the strategic and macro issues facing housebuilders and is a must for anyone involved in the business of housebuilding."
For further details please contact the events team on 020 7960 1646 or events@hbmedia.co.uk
For other HBF events visit the website http://www.hbf.co.uk/index.php?id=eventsandmeetings
For HBM events visit http://www.hbmedia.co.uk/
to topRosie Hinchliffe