HBF Weekly News Summary Friday 05 September 2008

Top stories this week *HBF attend Prime Minister's launch of £1bn housing package and stamp duty exemption....read more *Bank of England Maintains Bank Rate at 5.0%.....read more *Halifax house price index: House prices declined by 1.8% in August.....read more *HBF writes to members on restructuring....read more

Friday, 5 September 2008

Top stories this week

HBF attend Prime Minister's launch of £1bn housing package and stamp duty exemption....read more

Bank of England Maintains Bank Rate at 5.0%.....read more

Halifax house price index: House prices declined by 1.8% in August.....read more

HBF writes to members on restructuring....read more

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Government news

HBF attend Prime Minister's launch of £1bn housing package and stamp duty exemption

HBF Executive Chairman Stewart Baseley was the sole representative of the house building industry invited to a breakfast meeting with the Prime Minister on Tuesday to launch a major cross-government package of new measures to assist the housing market. The Chancellor of the Exchequer, Communities Secretary Hazel Blears and Chief Secretary to the Treasury, Yvette Cooper were also present at the briefing -covered extensively in footage used by Sky News and other broadcasters in reporting through the day.

The £1bn package announced by Communities Secretary Hazel Blears aims to help first-time buyers struggling to get onto the housing ladder, support vulnerable homeowners at risk of repossession, and support the house-building industry.

The Chancellor of the Exchequer has also announced that stamp duty land tax will not apply to purchases of residential property of £175,000 or less for the next year. This measure was estimated to cost £600m.

In a third step, the Department for Work and Pensions (DWP) announced new support measures to help vulnerable homeowners meet their mortgage interest payments. The DWP announced it would be reforming Income Support for Mortgage Interest by shortening the waiting period before SMI is paid from 39 weeks to 13 weeks for new working age claims from April 2009. The capital limit for new working age claims will also be increased to £175,000 from April 2009.

The measures announced by Ms Blears include:

offering an estimated 10,000 first-time buyers a chance to get onto the property ladder through a new £300m developer led shared equity scheme

supporting up to 6,000 of the most vulnerable homeowners facing repossession to remain in their home through a £200m mortgage rescue scheme

£100m investment to support SMI reform which could help prevent a further 10,000 repossessions

a £400m boost in spending power for social housing providers, including registered social landlords and councils, to deliver 5,500 more social houses over the next 18 months by bringing funding forward originally allocated for 2010/ 11

working with Regional Development Agencies to support the most critical regeneration schemes with the most potential to transform their communities.

Communities Secretary Hazel Blears said:

"This Government is committed to practical action to help those most affected by the current state of the housing market. We are working to make sure everyone struggling to pay the mortgage gets support and advice. We are giving a leg-up to first-time buyers keen to own a place of their own. And by bringing forward our investment in social housing, we are both getting more decent, affordable housing ready for people to live in sooner, and helping the house building industry weather tough times."

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HBF reaction to the Government housing package

Responding to the announcement of the Government's housing package, Stewart Baseley, Executive Chairman of the HBF, said:

"We welcome today's package as a positive set of measures to assist the housing market - and particularly the hard-pressed first-time buyer. We have consistently called for a stamp duty holiday to assist market confidence and for action to help those seeking to get on to the property ladder, including a new shared equity scheme involving developers. Advancing investment in social and affordable housing will help maintain house building activity and capacity and a new shared equity scheme in which developers can be more directly involved is something the industry has previously shown its ability to implement successfully.

"However, we still also need action to tackle the current constraints on mortgage funding. This remains a critical part of the overall picture on which the ultimate success of today's measures depends. We urge the Government to continue to advance work on this issue as a matter of urgency. The case for such action remains to avoid undue damage to the wider economy and to safeguard housing industry capacity for when conditions improve."

Download a copy of the HBF Member Briefing regarding the Government's package of housing measures

Following the announcement of the Government's housing package, HBF Executive Chairman, Stewart Baseley, and Director of External Affairs John Slaughter, have been commenting on the measures in the media. Stewart Baseley appeared on Tuesday's edition of Newsnight. John Slaughter appeared on ITN News at Ten.

Watch Newsnight again (piece starts at 01:34)

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CML reaction to the Government housing market package

The Council of Mortgage Lenders welcomed the integrated package of housing market measures announced by the Government. At the same time, the CML urged the Government to focus on the mortgage funding markets as much as on the consumer-facing initiatives announced today.

CML Director General Michael Coogan said:

"Essentially this package is directed at the blockages in the housing market for some vulnerable consumers. This is welcome, but until more funding is available we are still some way from restoring long-term stability to the housing and mortgage markets...

"Over time, the housing and mortgage markets will recover. But in the meantime, the situation is painful for some homeowners, and problematic in terms of balance sheet management for lenders too. We continue to see the funding problems in the mortgage market as a fundamental bar to meaningful housing market recovery. We believe that the focus of the Government's attention should be at least as much on market funding as on today's consumer-targeted measures. We will continue to work closely with the Government on effective implementation of this package, and on other measures which can be brought forward under the Crosby review."

NAEA reaction to the Government housing package

Peter Bolton King, Chief Executive of The National Association of Estate Agents (NAEA), commented:

"We are pleased a decision was made by the Government today, as the indecision over the last month has had a major effect on consumer confidence. Today's announcement is a step in the right direction however I am still concerned as I do not believe the decisions made will help the entire market. The stamp duty threshold has risen from £125,000 to £175,000 and this is not going to have the impact needed to revive the housing market as London and much of the South East will have no effect due to the high average price of first time buyer properties. As an association we still continue to urge the Government to offer a stamp duty holiday for any real positive contribution to be made to the market."

Prime Minister also announces help on skills

In his speech about Tuesday's housing package, the Prime Minister also announced action to help retain apprentices, he said:

"The construction industry could also face problems in ensuring that existing apprentices can complete their training. We must not leave people high and dry halfway through an apprenticeship. And we must ensure we avoid the mistakes of the past, cutting back on skills and training in difficult times leading to a shortage of workers unable to meet the demands of the future. So we are also announcing a clearing house to be set up between DIUS, ConstructionSkills (the sector skills council for construction), and the Learning and Skills Council to support those currently training in the housebuilding sector at risk of redundancy, matching them with new employers so they can complete the remainder of their apprenticeships."

This follows discussions HBF has had with ConstructionSkills and recent representations we have jointly made to the Skills Secretary, John Denham.

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Economic news

Bank of England Maintains Bank Rate at 5.0%

As widely predicted the Bank of England's Monetary Policy Committee voted on Thursday to maintain the official Bank Rate paid on commercial bank reserves at 5.0%.

The minutes of the meeting will be published at 9.30 on Wednesday 17 September.

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Industry news

CML introduces new Disclosure of Incentives Form to help reinforce confidence in new-build market

The Council of Mortgage Lenders' Disclosure of Incentives Form came into effect on 1 September. With the new measure the CML aims to ensure that any discounts or other incentives offered by developers are disclosed to the lender and consistently taken into account by valuers.

Making sure that a mortgage offer is based on the true value of the property is designed to provide more effective protection for both lenders and borrowers. This could help reinforce lenders' confidence in the market for newly-built property.

Commenting on the new measures, the CML's Director General, Michael Coogan, said:

"These measures to reinforce confidence in the accuracy of valuations of new-build properties will help underpin this segment of the market. This is particularly important at a time of limited funding availability for house purchase transactions. If developers ensure that they are transparent, and disclose any discounts or incentives on offer to buyers, lenders' confidence should start to return. In the meantime, recent lender experience means buyers of new-build properties will be expected to provide significant deposits so that lenders can manage their risks."

Download a copy of the Disclosure of Incentives Form

Download a Frequently Asked Questions guide to filling in the form

HBF Members click here to view two Member Briefings regarding the introduction of the Disclosure of Incentives Form

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RICS residential property proposals

RICS has published a package of measures that aim to address the downturn in the property market, help people who want to own a home and improve the home buying, selling and renting experience for consumers.

RICS believe that a combination of measures must be put in place looking at fiscal and financial issues, new models for home ownership, availability and affordability of homes, consumer information and regulation and standards. They state the package should not just look at immediate issues but must also establish a more efficient, sustainable property market with more information and better protection for consumers.

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Housing market news

Halifax house price index: House prices declined by 1.8% in August

The Halifax house price index released this week reported that:

House prices fell by 1.8% in August. This was similar to the previous two months - June (-1.9%) and July (-1.7%) - but lower than in March (-2.5%) and May (-2.5%).

House prices in August were 10.9% lower on an annual basis. The UK average price has returned to the level it was at in February 2006.

A solid employment market and low interest rates underpin the housing market. Halifax research shows that the labour market is the key driver of the housing market. The number of people in employment increased by 20,000 over the three months to June compared with the previous quarter and by 384,000 over the past year to a record 29.56m.

The house price to earnings ratio is declining. The house price to average earnings ratio - a key affordability measure - has fallen from a peak of 5.84 in July 2007 to 5.13 in June 2008. Halifax expects a further decline as prices continue to soften.

The temporary raising of the initial stamp duty threshold from £125,000 to £175,000 should reduce the stamp duty burden for a significant number of homebuyers, especially outside the south east of England. Almost a quarter of a million (230,000) homebuyers in England and Wales would not have paid stamp duty over the past year if the threshold had been £175,000 rather than £125,000.

Download the Halifax house price index

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House prices down by 0.9% in August

The results of Hometrack's house price survey show that house prices in August fell for the eleventh month - down 0.9%, compared to 1.2% the previous month. On a year on year basis prices are down by 5.3%, the largest drop since the survey began in 2001.

Average house prices were down across more than half (58%) of the country, over August, although the overall monthly fall was lower. The proportion of asking price being achieved started to level off - averaging 90.7% - down marginally over the last month, although well down on the 95.7% recorded in spring 2007.

HBF news

HBF writes to members on restructuring

Stewart Baseley is today writing to HBF members to set out the steps HBF is taking to restructure its operations so that it can deliver its core national and regional services in the most effective way possible in the current housing market slowdown. Confirming that the Federation is not immune to the pressures facing its members in the current climate, the letter informs members that HBF has reluctantly had to make a number of its staff redundant, including closing its existing regional offices in England. The letter also sets out how HBF will continue to represent the industry nationally and undertake key regional representation through its national staff team. HBF will continue to represent the industry in Wales through its Cardiff office.

HBF Member Briefing: draft Heritage Protection Bill

The Government has published its long awaited draft Heritage Protection Bill. It contains a series of major reforms to the heritage protection system in England and as such should be noted by home builders.

The draft bill, if enacted, will repeal almost all the substantive legislation on which the current system of heritage protection is based. The key reforms are listed in the HBF Member Briefing - click here to view * (Member only)

*If you have forgotten your login to access member only information on the website please type your email address in the 'forgotten password' box on the website by clicking here. If you are still experiencing problems please contact rosie.hinchliffe@hbf.co.uk

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Event news

HBF Annual Planning conference 2008

Wednesday 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

Housing Market Intelligence

Wednesday 15 October - Savoy Place, London

The annual Housing Market Intelligence conference is the house building 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

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Housebuilding Innovation awards 2008

Thursday 23 October - Millennium Mayfair Hotel, London

Now in their fourth year, the Awards have become firmly established as the most coveted accolade in the UK house building industry. These awards recognise innovation among house builders and their suppliers in categories including ‘best sustainability initiative', ‘best innovation in technology' and ‘best initiative to first-time buyers/ key workers'. The glittering black tie event will this year be hosted by John Humphrys and takes place on 23 October in London.

For further information visit http://www.hbmedia.co.uk/ or take advantage of the early booking discount before 22 August, by contacting the events team on 020 7960 1646 or events@hbmedia.co.uk.

HBF Technical conference

Wednesday 12 November, University of York

This year 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 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

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/

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Rosie Hinchliffe

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