Friday, 13th November 2009 Top stories this week HBF meetings with Treasury, Government and the Bank of England.....read more Pre-Budget Report 2009 – date announced.....read more CML: 2009 and 2010 forecasts.....read more CML: One third of first-time buyers make lucky stamp duty escape.....read more DECC publish draft National Policy Statements for energy infrastructure.....read more Quick LinksHBF news Economic news Housing market news Government and political news Industry news Events HBF News HBF meetings with Treasury, Government and the Bank of England HBF Executive Chairman Stewart Baseley, and Director of Economic Affairs John Stewart, accompanied by senior executives from two HBF member companies, met Exchequer Secretary to the Treasury, Sarah McCarthy-Fry MP, on 12th November to set out the HBF’s case for continued measures in this year’s Pre-Budget Report to support the fragile recovery in new home sales and house building. The meeting followed HBF’s recent formal PBR submission to the Treasury. Stewart Baseley and John Stewart also met with Government officials from CLG and key housing stakeholders to discuss housing delivery, including the impact of policy and regulation on site viability. The meeting follows the Treasury’s April Budget commitment to report at the Pre-Budget Report on the Government’s strategy to support housing supply through the recovery, including “the best regulatory and policy framework to support the Government’s long-term housing objectives”. The Budget commitment was a direct response to HBF representations to officials and ministers across Government on the cumulative impact of policy and regulation. In addition, Stewart Baseley and John Stewart met officials at the Bank of England to brief them on market conditions and key issues affecting house builders, while John Stewart held another of his regular meetings with the Prime Minister’s housing policy advisor to discuss issues affecting the industry. Download a copy of the HBF’s PBR submission to top Economic news Pre-Budget Report 2009 – date announced HM Treasury has announced that Alistair Darling will make his Pre-Budget statement to the House of Commons on Wednesday 9th December 2009 at 12:30. to top CML: 2009 and 2010 forecasts The CML has published revised 2009 mortgage market forecasts and new forecasts for 2010. The expectation is of continuing slow recovery. The CML forecasts that: The number of housing transactions will reach 810,000 this year and 850,000 next year; Gross lending will total around £141bn this year and £150bn next year; Net lending will be modestly positive this year at £8bn (revised from a negative expectation of minus £5bn previously), and £15bn next year; Assuming interest rates remain at their current low levels, the number of mortgages 2.5% of balance or more in arrears will end the year at 195,000 (down from previous forecast of 360,000), and will rise only modestly next year to 205,000; The number of repossessions this year will total around 48,000 (0.43% of all mortgages) and around 53,000 (0.48%) next year. Having anticipated 75,000 repossessions in 2009 in last year's housing market forecasts, the forecast had already been revised down to 65,000 in June, but is now being cut again in recognition of lender forbearance, government measures and the beneficial effect of continuing low interest rates which are helping most borrowers facing difficulty to keep their homes. In the third quarter of this year, new CML figures show that the number and proportion of mortgages in arrears both fell, despite the bleak economic backdrop. At the end of September 194,600 mortgages, 1.77% of the total, were in arrears of 2.5% or more of the outstanding mortgage balance. This compares with 204,200 cases (1.86% of all Commenting on the latest arrears data and on the new forecasts, CML Director General Michael Coogan said: "We are glad to have been wrong on our previous forecast for mortgage repossessions this year. Low interest rates, and lenders' forbearance policies, have helped to cushion many households facing financial problems. And although the economy is not out of the woods yet, we no longer expect a dramatic rise in properties being taken into possession unless interest rates rise from the low levels that most commentators now expect to persist for some time. "In terms of new lending next year, we expect a modest increase. But it is difficult to see the case for a dramatic upturn in the absence of significant improvement in the wider economic picture. There is a risk that public spending cuts and higher taxes could choke off recovery. So, although we have become more optimistic, we remain cautious about market prospects." Read more to top Bank of England: Inflation Report November 2009 In order to maintain price stability, the Government has set the Bank’s Monetary Policy Committee (MPC) a target for the annual inflation rate of the Consumer Prices Index of 2%. Subject to that, the MPC is also required to support the Government’s objective of maintaining high and stable growth and employment. The Inflation Report is produced quarterly by Bank staff under the guidance of the members of the MPC. The report stated that the world economy showed signs of recovery, although global activity remained significantly below pre-crisis levels. In the United Kingdom, output had fallen by about 6% over six quarters, but a number of indicators suggested that economic activity had begun to stabilise. A recovery in output is likely, driven by the considerable stimulus from the past easing in monetary and fiscal policy and the depreciation of sterling. But constraints on the supply of bank credit and concerns over balance sheets will weigh on spending. A degree of economic slack is likely to persist over the forecast period, although its extent will depend on the strength of the recovery and on developments in supply, both of which remain highly uncertain. CPI inflation fell to 1.1% in September, but is likely to rise sharply to above the 2% target in the near term. Earnings growth remained subdued. Under the assumptions that Bank Rate moves in line with market interest rates and the stock of purchased assets financed by the issuance of central bank reserves reaches and stays at £200bn, downward pressure from the margin of spare capacity bears down on inflation for much of the forecast period, although this gradually fades as the economy recovers. The risks of inflation being above or below target are broadly balanced by the end of the forecast period. But there are significant risks to the inflation outlook in each direction. Read more to top Housing market news CML: One third of first-time buyers make lucky stamp duty escape One third of first-time buyers escaped paying stamp duty in September as a result of the government’s temporary £175,000 nil-rate threshold, according to new data released by the Council of Mortgage Lenders. There were 6,200 first-time buyer loans for properties between the old threshold of £125,000 and the temporary threshold of £175,000, representing 32% of the 19,700 loans to first-time buyers in September. In addition, 7,800 first-time buyers (40%) bought properties valued below the £125,000 original threshold. There were 7,300 home mover loans for properties between £125,000 and £175,000 which was 24% of the 31,000 loans to home movers in September. Since the concession was introduced last September, an estimated 132,500 house purchase mortgage transactions have escaped paying stamp duty which otherwise would have incurred the tax at 1% - some 27% of the 486,400 house purchase loans in the period. There were 50,600 loans for house purchase in September - an increase of 2% from August and 43% from September 2008. There were 33,000 loans for remortgage - a 10% increase from August but 48% lower than September a year ago. Gross mortgage lending was 7% higher than August at £12.9bn, but was still 25% lower than September last year. Read more to top CML: Buy-to-let market grows for first time in two years Gross lending in the buy-to-let mortgage market grew in the third quarter for the first time in two years, according to data published today by the CML. At £2.1bn, lending was 10% higher than in the previous three months. The third quarter also saw a similar first increase in two years in the number of buy-to-let loans advanced, from 21,600 to 23,700. But the recovery in buy-to-let lending was from a low base, with current lending volumes sharply lower than their peak in 2007. The number of outstanding buy-to-let loans grew to 1,205,000, representing 11% of all mortgages by the end of the quarter (compared to 1,180,000 three months earlier). The value of outstanding buy-to-let mortgages increased by 2.5% to £144.2bn. Within the buy-to-let market, both lending for house purchase and remortgaging grew in the last three months. As with the mainstream mortgage market, however, house purchase lending was appreciably stronger. Remortgaging capacity was constrained by the unavailability during the quarter of any buy-to-let mortgages at over 80% loan-to-value (LTV). Landlords with existing mortgages at a higher LTV are therefore effectively obliged to stay on their existing lenders' reversion rates. Commenting on the newly-published data, the CML's Director General Michael Coogan said: "At this stage, the recovery is modest - but the figures show that buy-to-let is here to stay. Buy-to-let lenders are among those facing some of the biggest challenges in raising mortgage funding, so the improved figures are all the more welcome. "Future demand for housing in all tenures supported by lenders will remain strong, despite mortgage funding constraints and low construction rates. With funding for social housing under pressure, the private rented sector has a strong future. Mortgage lenders will have an important role to play in it, and will continue to help improve choice and standards for private tenants." Read more to top CLG: House Price Index - September 200 The latest UK house price index statistics produced by Communities and Local Government were released this week. The latest statistics release includes data based on mortgage completions during the month of September 2009. The key points from the release are: UK house prices were 4.1% lower than in September 2008 but 1.2% higher than in August 2009 (seasonally adjusted); The mix-adjusted average house price in the UK stood at £199,303 in September 2009 (not seasonally adjusted); UK house prices rose by 3.1% in the quarter ending September 2009. This compares with a smaller rise of 0.3% for the quarter ending June 2009 (seasonally adjusted); Annual average house prices fell in England (-4.0%), Wales (-6.7%), Scotland (-0.9%) and Northern Ireland (-18.3%); Annual average house prices paid by first time buyers in September 2009 were 1.3% lower than a year ago. By comparison average house prices paid by former owner occupiers were 5.2% lower; Annual average house prices paid for new properties in September 2009 were 6.6% lower than a year ago. By comparison average house prices paid on pre-owned dwellings were 3.9% lower. Read more to top RICS: House prices continue to rise but supply increases House prices continue to rise despite an increase in the number of new instructions received by agents says the Royal Institution of Chartered Surveyors (RICS) latest UK housing market survey. The net balance of Chartered Surveyors reporting rises rather than falls in house prices reached a positive reading of 34 in October, up from 20% in September - this is the highest result since December 2006. London is leading the upturn in prices with the net balance of surveyors reporting rises rather than falls for London climbing to 95% - the highest figure since December 1996. However, the survey also contains some evidence that vendors are beginning to return to the market. A net balance of 15% of surveyors reported that new instructions had increased in October, compared to a reading of five percent in September. Significantly, all regions reported a rise in instructions for the first time since the onset of the credit crunch with the North, the South West and London leading the way. Meanwhile, transaction levels continued to rise with sales per surveyor edging up to 19 over the past three months. As a result, the closely watched sales to stock ratio - a measure of market slack and a lead indicator of future prices-climbed a little further. It has now risen for ten consecutive months and stands at 30. The pace of improvement in buyer interest slowed for the fourth consecutive month. The net balance of surveyors reporting an increase rather than a decrease in new buyer enquiries slipped from 35% in September to 31%. Read more to top Government and political news DECC publish draft National Policy Statements for energy infrastructure The draft National Policy Statements and their related documents were published by the Department of Energy and Climate Change (DECC). The consultation closes on Monday 22nd February 2010. Subject to the consultation and Parliamentary scrutiny, the Government intends to finalise and formally approve the energy National Policy Statements in 2010. Mr Ed Miliband MP, Secretary of State for Energy and Climate Change, commented: “The threat of climate change means we need to make a transition from a system that relies heavily on high carbon fossil fuels, to a radically different system that includes nuclear, renewable and clean coal power. “Change is also needed for energy security. In a world where our North Sea reserves are declining, a more diverse low carbon energy mix is a more secure energy mix, less vulnerable to fluctuations in the availability of any one fuel. “The current planning system is a barrier to this shift. It serves neither the interests of energy security, the interests of the low carbon transition, nor the interests of people living in areas where infrastructure may be built, for the planning process to take years to come to a decision. “That is why we are undertaking fundamental reform of the planning system which will result in a more efficient, transparent and accessible process.” Six NPSs were published - one overarching and one for each of the following areas: fossil fuels, nuclear, renewables, transmission networks and oil and gas pipelines – alongside the Government’s final Framework for the Development of Clean Coal. Read more to top Skills for Growth – A national strategy for economic growth and individual prosperity The Department for Business Innovation and Skills (BIS) this week published “Skills for Growth: a national strategy for economic growth and individual prosperity”. he document sets out some important decisions and marks a radical shift in some of the priorities of the skills system. Commitments include: Creating a modern technician class through more advanced apprenticeships; Investing in skills in the sectors on which future growth and jobs depend; Empowering individuals through skills accounts giving people ‘consumer choice’ and better information about courses; The introduction of light touch monitoring arrangements for our best providers; Simplifying the skills landscape, working with UKCES to implement their recommendation to reduce the number of separately publicly funded agencies by over 30 in the next three years. Read more Download a copy of “Skills for Growth” to top Industry news Institution of Mechanical Engineers: Engineers call on Government to adopt findings of new report UK Government plans to make carbon emission cuts of 80% by 2050 are physically impossible to achieve, according to a new report, “Distributed Energy Systems: Global Energy Crisis to Local Communities” published by the Institution of Mechanical Engineers (IMechE). The report states that there is not enough time or capacity to build the wind turbines and extra nuclear power stations required. Under current plans, the targets will not be met until 2100, it argues. The Department of Energy and Climate Change accused the Institution of having a "can't do, won't do attitude". IMechE recommendations to Government include: Promote the uptake of DES as part of future plans for refreshing the UK energy generating capacity; Develop financial tools to counteract the novelty and uncertainties around this technology while experience is gained; Increase funding into energy storage research to enable greater fluctuations in supply and demand to be accommodated. The UK's Climate Change Act passed into law in 2008, putting a legal imperative on the Government to cut emissions by 80% of their 1990 levels by 2050, with a mid-term target of 34% cuts by 2020. But the IMechE’s report investigates how practical these targets are to reach and concludes that they cannot be met with the current approaches to cutting carbon. Read more to top Events HBF Annual Technical Conference 2009 – The TechnoCentre, Coventry The Building Regulatory Agenda – from here to 2016 Wednesday 18th November 2009 The conference aims to look at the forthcoming amendments to the Building Regulations, addressing CLG’s policy overview and in particular concentrating on the recent Parts F & L consultation. Expert speakers from CLG, BRAC, NHER, Zero Carbon Hub and BRE will be there to answer your questions on all building regulation issues. For further information please visit www.house-builder.co.uk or contact the events team on 020 7960 1646 to top Consumer code briefings A series of briefings is now underway on the proposed Consumer Code for home builders, which will be introduced in April 2010 in response to issues raised in the OFT market study into the home-building industry that was published in September 2008. The events will take place on: Manchester - 18th November Manchester Conference Centre London - 23rd November Mayfair Conference Centre Leeds - 25th November Royal Armouries Bristol - 30th November Holiday Inn Filton These initial, senior-level briefings are for chief executives and managing directors. The presentations will introduce the requirements of the Code and will examine the potential impact on your business. Places are limited and will be allocated on a first come, first served basis. Details of these FREE briefings and a copy of the Code itself are available on the Consumer Code website at www.newhomesconsumercode.com to top WHAT HOUSE? Awards 2009 – gala presentation luncheon Tickets and tables are now available for the 2009 What House? Awards, taking place at London's Grosvenor House Hotel on Friday 20th November. The event is one of the highlights of the house building calendar, as the industry meets to salute the best new homes in Britain. To book your seats for this prestigious event please email Derek Smith. Or download a booking form at www.whathouse.co.uk/awards. to top For other HBF events visit the website http://www.hbf.co.uk/index.php?id=eventsandmeetingsFor HBM events visit http://www.hbmedia.co.uk/ to top Rosie Hinchliffe View Previous Weekly News Summary
