Friday, 22th May 2009 Top stories this week House building: March Quarter 2009, England......read more East of England Plan set back.....read more Bank of England: Trends in lending May 2009.....read more Statistics on mortgage and landlord possession actions in the county courts – first quarter 2009.....read more CML: April gross mortgage lending........read more Rightmove: House price index.......read more Quick LinksIndustry news Economic news Housing market news Government and political news HBF news Events Industry news House building: March Quarter 2009, England The latest national statistics on house building were released under the auspices of the UK Statistics Authority this week. Statistics in this release present figures on new build housing starts and completions in England. Figures for the UK and constituent countries are also available. The latest statistics report on the period January to March 2009 and update those previously released on 19th February 2009. Key points from the latest release are: There were an estimated 18,340 seasonally adjusted housing starts in England in the March quarter 2009, up 13% on the previous quarter but 44% lower than the March quarter 2008; Private enterprise housing starts (seasonally adjusted) were 10% higher than in the December quarter 2008, but 51% lower than in the March quarter 2008; Housing starts by Registered Social Landlords (non-seasonally adjusted) rose by 5% compared to the same period last year; Annual housing starts figures for England continued to decline. They totalled 90,430 in 2008-09, down 42% compared with 2007-08 and 51% below their 2005-06 peak; Housing completions in England fell by 4% to an estimated 31,140 (seasonally adjusted) in the March quarter 2009 compared to the previous quarter. Compared with the March quarter 2008, completions were down by 23%; Private enterprise housing completions (seasonally adjusted) were 1% lower in the March quarter 2009 than the December quarter 2008, and 27% lower than in the March quarter 2008; Annual housing completions in England totalled 133,710 in 2008-09, down by 20% compared with 2007-08. Read more to top East of England Plan set back The Government suffered a legal blow this week over its plans for house building in the east of England. A High Court judge ruled that the Government's methodology for proposing development at Hemel Hempstead, Welwyn Garden City and Hatfield was flawed. Consequently, this part of the Plan must be quashed and reconsidered. The three areas in Hertfordshire were identified as “key centres for development and change'' in the East of England Plan, published by the Government in May last year. Mr Justice Mitting, sitting at the High Court in London, ruled that alternatives to housing that will impact on green field sites and the Green Belt had not been properly considered before the regional strategy was adopted. He ruled the Government had failed to comply with an EU directive and environmental assessment regulations that required reasonable alternatives to be evaluated. The Government will now have to consider whether to appeal against the ruling, or reconsider its strategy for the area. The challenge was mounted by Hertfordshire County Council and St Albans City Council, which could be affected by the extension of Hemel Hempstead into its district. At the same hearing the judge rejected a similar challenge to proposals for growth at Harlow North, saying that in that case there had been adequate environmental assessment. The East of England Plan sets out how the region is to change in the next 20 to 30 years including a requirement for Hertfordshire to provide at least 83,200 homes in the period up to 2021. HBF issued the following statement in reaction to the judgment; Andrew Whitaker, Planning Director at the HBF said “This is a very disappointing and frustrating decision that will slow down even further what has already been a long and cumbersome planning process. There is a desperate need for more homes in the East of England and house builders need a planning framework that provides greater certainty and clarity on where to invest if these homes are to be delivered. Not doing so will create clear social and house price issues in the future.” to top Economic news Bank of England: Trends in lending May 2009 This publication presents the Bank of England’s assessment of the latest trends in lending to the UK economy. It draws mainly on long-established official data sources, such as the existing monetary and financial statistics collected by the Bank. The May report focuses on developments in the most recent monthly data and covers official data up to March 2009, supplemented by Lending Panel data and intelligence gathered up to end-April 2009. The report states that: “Net lending to businesses has remained weak, with new facilities granted reported largely to reflect the refinancing of existing lending. Utilisation rates of facilities have increased across a range of industries since 2007, partly reflecting a reluctance of borrowers to maintain unused facilities, given the higher costs of doing so and weaker investment plans. Capital market issuance was relatively high in the first quarter, consistent with efforts by some businesses to diversify their funding sources. Businesses continue to report higher spreads and fees on the renewal of facilities, which lenders partly attribute to higher longer-term funding costs. A new survey on lending to small and medium-sized enterprises shows a broadly similar picture to that for lending to businesses overall. “Mortgage lending growth has slowed further, with net and gross lending flows having weakened in March. Mortgage applications have risen in recent months and approvals for house purchase have edged higher, though remain close to historical lows. The number of high loan to value products being offered has stabilised in recent months, though spreads on those products are particularly high. “In 2009 Q1 the quarterly rate of growth of unsecured lending was the lowest since 1992. Acceptance rates reported by lenders on applications for unsecured credit were little changed in April, and demand is reported to have remained weak. The interest rates charged on consumer credit overall have fallen in recent months, but by less than Bank Rate and Libor.” Read more to top Statistics on mortgage and landlord possession actions in the county courts – first quarter 2009 The Ministry of Justice has published figures showing the numbers of mortgage and landlord possession actions in the county courts of England and Wales for the first quarter of 2009. Mortgage Possession actions during the first quarter of 2009: 22,609 mortgage possession claims were issued on a seasonally adjusted basis, 42% lower than in the first quarter of 2008 and 13% lower than in the fourth quarter of 2008; 17,054 mortgage possession orders were made on a seasonally adjusted basis, 39% lower than in the first quarter of 2008 and 43% lower than in the fourth quarter of 2008; 47% of mortgage possession orders were suspended, broadly the same as in the first quarter of 2008 and 45% in the fourth quarter of 2008. Landlord Possession Actions during the first quarter of 2009: 35,745 landlord possession claims were issued using the standard and accelerated possession procedures on a seasonally adjusted basis, 5% lower than in the first quarter of 2008 and 1% lower than in the fourth quarter of 2008.; 27,485 landlord possession orders were made through the standard and accelerated possession procedures on a seasonally adjusted basis, 5% lower than in the first quarter of 2008 and 3% lower than in the fourth quarter of 2008; 44% of landlord possession orders made through the standard and accelerated possession procedures were suspended compared to 42% in the first quarter of 2008 and in the fourth quarter of 2008. Read more to top Monetary Policy Committee minutes – 6th & 7th May 2009 The Bank of England this week published the minutes of the Monetary Policy Committee held 6th & 7th May at which it was decided to maintain the Bank Rate at 0.5%. The minutes state that: “The outlook for inflation...remained extremely uncertain. The margin of spare capacity that was likely to persist over the forecast period would bear down on CPI inflation. That was partly offset by the upward pressure associated with the pass-through of sterling’s depreciation to consumer prices. The balance of these factors suggested that, conditioned on the assumptions that Bank Rate followed a path implied by market yields and the stock of purchased assets increased to £125 billion, it was more likely than not that CPI inflation would be below the 2% inflation target in the medium term. In the projection for CPI inflation conditioned on Bank Rate held constant at 0.5%, the risks of inflation being above or below the 2% target became more evenly balanced towards the two-year horizon.” Read more to top ONS: Volume of retail sales rises by 2.6% This week’s Office of National Statistics retail sales figures have been published under changed methodology. The changes include introducing ‘chain linking’ and the use of commodity indices from the Consumer Prices Index rather than the Retail Prices Index for the calculation of RSI industry deflators. The release states that: “The seasonally-adjusted volume of retail sales in April was 2.6% higher than in April 2008. However, it was a mixed picture across sectors. Food stores rose by 1.5%, the largest increase since May 2008. Non-food stores increased by 2.8%. Within non-food stores, the largest increase was for textile, clothing and footwear stores at 11.9%, followed by non-specialised stores (such as department stores) which increased by 6.0%, the largest increase since February 2008. Household goods stores decreased by 8.0%. Non-store retailing and repair increased by 9.1 per cent. “Total seasonally adjusted sales volume in the three months to April was 0.7% higher than the same period a year ago, the smallest increase since January 1996. Sales volume increased by 0.8% for non-food stores, the smallest increase since February 1999. Within non-food stores, textile clothing and footwear stores increased by 8.9% while household goods stores decreased by 7.9%, which is the largest fall since records began. Food stores decreased by 0.2% and non-store retailing and repair increased by 7.3%. The seasonally adjusted value of retail sales was 3.0% higher than in April 2008 and was 1.7% higher for the three months to April than in the same period a year earlier.” Read more to top RICS: Pace of decline in capital values accelerates RICS Global Commercial Property Survey Q1 2009 reported this week that the pace of decline in capital values accelerated in the first quarter with countries in both Western Europe and Emerging Europe hit by price falls. France, the Netherlands and the Republic of Ireland saw capital values drop significantly with real estate professionals in these countries the most pessimistic regarding the near term price outlook (ranked in the bottom quartile of over 45 countries worldwide). Respondents expect little easing in the pace of price declines in these markets although some moderation in price falls is expected in Spain and the UK. Read more to top Housing market news CML: April gross mortgage lending Gross mortgage lending declined to an estimated £10.4bn in April, down 9% from £11.4bn in March and 60% from £26.1bn in April 2008, according to new data from the Council of Mortgage Lenders. There was a slight fall for seasonal reasons as Easter fell in April this year (Easter was in March in 2008). Taken together, lending for March and April was down 57% on a year earlier. CML Director General Michael Coogan said: “It’s still too early to spot a clear pattern of recovery in the housing market as some commentators have suggested. “Activity remains weak, and we have said we will see volatility in monthly lending figures as we bounce along at the bottom of the market. Our forecast for gross lending of £145 billion in 2009 remains unchanged.” Read more to top Rightmove: House price index The Rightmove house price index reported this week that: The average property asking price rose by 2.4% month on month, from £222,077 in April to £227,441 in May; Rightmove attributed this 2.4% increase to new sellers pushing up the asking price, driven by a mixture of ambition, optimism and necessity; The lowest level of property coming to the market in May for 6 years as falling values erode sellers’ critical loan-to-value ratios; Prospective buyers with nothing to sell were however increasingly active, encouraged by the 59,072 properties with asking prices reduced by 2% or more in the last 4 weeks, with an average reduction of 6.8%. Miles Shipside, Commercial Director at Rightmove, commented: “The long term worry is that the supply side of the housing market is now compromised for several years to come. Developers have shed much of their workforce so could struggle to increase capacity, and we are now seeing the lowest number of new sellers of second hand homes for the month of May since 2003. Many people who might have wanted to take advantage of the spring selling season to trade up will be victims of equity immobility. The choice of when and how to move is now out of their hands. While some of the impetus behind the increase of over £5,000 in average asking prices will be due to ambition or optimism, it will also be out of necessity as new sellers attempt to scrape together enough equity to move.” Read more to top NAEA: Property sales reach 18 month high Estate agents sold more houses in April than in any month since October, 2007, new figures from the National Association of Estate Agents revealed this week. The average estate agent sold ten properties in April, up from eight in March and a low point of five in August 2008. Chief Executive of the NAEA, Peter Bolton King, said: "What we are beginning to see now are consistent positive indicators that have held firm or improved since the beginning of the year. "Six months ago people were talking about how British people's attitude to owning property had changed in the recession. “The NAEA always said that this was nonsense, and that demand for property remained strong, but confidence in the market had gone. "These figures show that this confidence is returning." Read more to top Government and political news Communities and Local Government Committee - sixth report Wholesale cultural changes across central Government, closer Parliamentary scrutiny of national ministries, and reform of local authority finance are all required if communities are to reap the benefits that a shift of power and responsibility towards local Government could deliver, says the cross-party Select Committee on Communities and Local Government in its latest report The Balance of Power: Central and local Government that was published this week. Launching the report, Committee Chair Phyllis Starkey said: “We are still a long way from an equitable and healthy balance of power between central and local Government in this country. Central Government must take radical steps to tilt the balance of power towards localities, and local Government must become more ambitious.” A range of recommendations are made in the report including that there is a significant reform of local Government finance to enable local Government to raise more of its own money. It says that serious consideration should be given to a supplementary local income tax, with a corresponding reduction in central taxation. Read more Mayor of London aims to halve capital's severe overcrowding by 2016 The Mayor of London Boris Johnson announced an ambitious pledge to halve severe overcrowding in London’s social housing sector by 2016, the first city in the UK to make this commitment, together with proposals to deliver more family-sized affordable housing. The Mayor said: “The past year has been a turbulent one for the economy and housing market in the capital but I will not let that deter our hugely important work to deliver more affordable housing for Londoners. “We are developing new housing sites each week, building new homes and bringing previously rundown housing back into use, working closely with the capital’s boroughs “There are tough times ahead, but London is now seeing co-ordinated, creative and innovative approaches to development which will ensure we emerge stronger from the downturn. “I am extremely confident we will achieve our goals of halving severe overcrowding, delivering more quality affordable housing and widening housing choices for Londoners.” Read more Download a copy of the London housing strategy to top HBF News HBF attend latest European trade association meeting HBF took part in the latest meetings of its European trade association, the UEPC, at the end of last week. The UEPC considered ways in which it can work effectively and more pro-actively in the difficult circumstances facing house builders and developers in most EU markets at present. Among specific issues discussed, it was agreed that early pro-active lobbying should be undertaken in Brussels on the revision of the Energy Performance of Buildings Directive in view of its implications for national building regulations on energy and carbon efficiency – including zero carbon. HBF will continue to take an active part in this work. to top Events HBF Midlands AGM Friday 12th June – Sketchley Grange Hotel, Hinckley, Leicestershire The HBF Midlands Annual General Meeting and luncheon is being held at the Sketchley Grange Hotel, Hinckley, starting at 12.15 pm. This is an excellent chance for everybody working in the housing industry, at all levels, to review the previous year and forward plan for 2009, as well as networking with peers. Please contact Marian MacDonald on 020 7960 1605 or marian.macdonald@hbf.co.uk for further details and booking information. to top ‘New homes week 2009’ The New Homes Marketing Board has announced that it is proposing to hold ‘New Homes Week 2009’ between 14th and 20th September. Like the previous New Homes Weeks in 2005 and 2006, which proved extremely successful, the objective of the week will be to promote the new homes market by highlighting the benefits of new build homes, which will hopefully result in increased visitor levels to sites and thus drive sales. It is imperative that the New Homes Marketing Board and the Home Builders Federation assist its members in every possible way to drive sales in such challenging trading conditions. Last year it was felt that the environment was just too turbulent to justify such a campaign, and whilst clearly a challenging environment remains, increased consumer interest dictates that every option should be explored to convert that interest in to reservations. The campaign will be driven predominantly through the local media, and the NHMB will be developing stories around set themes for each day of the week to generate public interest. As well as developing an overarching strategy, NHMB will be looking to link up with members on a local and regional level, and to support them to develop their own initiatives/ events throughout the week. In order that members are fully aware of the proposals it is requested that the relevant member of staff emails nhw2009@hbf.co.uk and further details will be sent out shortly. to top Housing Market Intelligence Conference – Savoy Place, London Tuesday 13th October 2009 The industry’s leading business strategy and planning conference and launch of the seventh annual Housing Market Intelligence Report. A booking form will shortly be available but for further information please contact the events team on 020 7960 1646 or visit www.house-builder.co.uk to top The Housebuilding Innovation Awards – Millennium London Mayfair Thursday 5th November 2009 The industry’s most sought after and prestigious awards will this year be presented at a glittering black tie event on Thursday 5th November. The shortlist will be announced on Wednesday 1st July and tickets will shortly be available to book. For further information please contact the events team on 020 7960 1646 or visit www.house-builder.co.uk to top Hope Challenge: 12 - 14th June 2009, Peak District HBF's nominated charity, Habitat for Humanity, which builds safe, decent homes for families living in poverty, is organising a fundraising event to take place in the summer. Taylor Wimpey, Bovis and HBF are amongst the teams already registered for the Hope Challenge 2009, and they are looking for more house builders to enter an event that was born out of industry activity. It is a challenge event for teams of 3-6 people that will test your initiative, your teamwork and your fitness. And by sleeping in your very own shelter you will experience some of the challenges faced by those who live in poverty housing. The event involves: 2 days and 2 nights in the great outdoors Mental and physical team challenges The Shelter Build challenge - sponsored by NHBC 1000m of hill ascent and 20 miles of trekking A balance of fitness, strategy and team work HFH is looking for teams of people who want to rise to the challenge of raising funds in support of the 2 billion people living in poverty housing around the world. If you would like to sponsor the HBF team please click here Click here for more information and entry requirements 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 HinchliffeView Previous Weekly News Summary
