Friday, 24th July 2009 Top stories this week NHBC: Applications to build new homes highest since July 08......read more Second quarter GDP – a further fall.....read more CML: June gross mortgage lending.....read more False self-employment in construction: taxation of workers.....read more HBF member briefing: Definition of zero carbon homes.....read more Government review into the extent and impact of housing development on garden land.....read more Quick Links Housing market news Economic news Industry news Government and political news HBF news Events Housing market news NHBC: Applications to build new homes highest since July 08 Applications to build new homes rose to their highest level since July 2008 last month, National House Building Council figures have revealed. The data shows there were 8,305 applications in June, the greatest number since 9,530 applications were received in July last year. Figures for the three months to the end of June show the fourth consecutive quarterly rise, with 21,637 applications. Of these 13,328 were for private sector homes and 8,309 were for public sector developments. These figures are down 36 per cent and 8 per cent respectively on the same period last year, but the overall number of applications is up 12 per cent on the quarter to the end of May this year. NHBC Chief Executive Imtiaz Farookhi said: ‘Our figures show a significant improvement on the all-time low of December 2008 as there has been a steady increase of applications in the first half of the year. While this is encouraging in the short-term, it is important to point out that house-building output is still greatly reduced compared to previous years. ‘There needs to be a recovery in demand before house builders can increase the number of applications to build new homes to the levels that the government’s targets demand.’ Read more to top Rightmove: House price index The Rightmove house price index, released this week, reported that: The average asking price for a new home was up by 0.6% (£1,428), the fifth monthly price increase of 2009; The renewed price rises in the first half of 2009 indicate that last winter was the transaction and price undershoot at the bottom of the market; Bargain hunting buyers belatedly putting their own houses on the market has led to a 20% recovery in new seller numbers and un-seasonally strong Rightmove site traffic. Miles Shipside, Commercial Director at Rightmove commented: “There is now clear evidence that there were some fire-sale prices last winter, when a few brave buyers correctly called the bottom of the market. In most parts of the country prices have consistently improved during spring. With growing confidence that we’ve passed the bottom, buyers are more active, although they may discover that many of the best buys have gone... “More sellers looking to buy are good news for the market, as they help build longer chains, which build transaction volumes. We are seeing this come through in the gradually increasing mortgage approval and transaction numbers, though for momentum to build, it is essential these sellers are realistic on their pricing. Many properties sold so far this year have been empty, and therefore their sellers have lower price expectations. This new batch of more discretionary sellers will be under less financial pressure to negotiate, but must accept that their buyer will be looking to do a deal as much as they are. It’s all about the price differential to trade up, and by being too greedy they will join the large overhang of stale property and miss the current deals on both property and mortgage rates.” Read more to top RICS: Commercial property survey Q2 2009 RICS’ Commercial Property Survey shows that tenant demand fell in the second quarter of 2009 although the pace of decline eased back markedly. In fact, the net balances for new enquiries and confidence were the least negative since the start of the downturn in the third quarter of 2007. The moderate pace of decline in tenant demand points towards a mild improvement in the lettings market particularly in the office sector where the net balance actually turned positive for the first time since the third quarter of 2007. In aggregate, 13% more Chartered Surveyors reported a fall than a rise in tenant demand compared with 40 percent in the first quarter. In the office sector, 1% more surveyors reported a rise than a fall in tenant demand up from a negative reading of 37% in Q1. Read more to top Economic news Second quarter GDP – a further fall The Office of National Statistics has today reported that Quarter 2 GDP fell 0.8% quarter on quarter. This is a deeper drop than expected by many – the consensus view being for a drop of between 0 and 0.3%. Construction output was especially weak (down 2.2% quarter on quarter). Manufacturing was down 0.3% and services down 0.6%. GDP is down 5.6% year on year. This is the biggest peacetime drop since the 1930s. The drop in GDP from the pre-recession peak (5.7%) is much greater than in the big three recessions of the last 60 years. Read more to top CML: June gross mortgage lending Gross mortgage lending in June was an estimated £12.3bn, a 17% increase from £10.5bn in May, but a 48% decline from £23.8bn in June 2008, according to new data from the Council of Mortgage Lenders. Gross lending in the second quarter of 2009 totalled an estimated £33.3bn, unchanged from the first quarter, which was the lowest quarterly reading since the first quarter of 2001. CML Economist, Paul Samter said: “The pick-up in June’s lending largely reflects seasonal factors, and these may well support lending volumes at moderately higher levels over the rest of the summer. But the combined effects of the restricted nature of mortgage funding, reduced number of active lenders, weak labour market and limited consumer demand are likely to hold back any significant and underlying improvement. Our forecast for gross mortgage lending of £145bn this year is unchanged." Read more to top Bank of England: Trends in lending This Bank of England monthly publication presents the Bank's assessment of the latest trends in lending to the UK economy: Official data for May showed the lowest flow of total net mortgage lending since the monthly series began in April 1993, but the major UK lenders reported that in June their flow of net mortgage lending rose a little. The major UK lenders reported a further rise in approvals for house purchase in June, suggesting that mortgage lending for house purchase may continue to strengthen in coming months. Fixed mortgage rates rose in June, in part reflecting increases in swap rates. Some major UK lenders have reported that signs of stabilisation in housing market activity and prices, and the margins prevailing on higher LTV products, have slightly increased their appetite to lend at higher LTVs. Read more to top Retail sales: Underlying growth increases in June According to new figures released by the Office of National Statistics, the volume of retail sales in June 2009 was 2.9% higher than in June 2008. Total sales volume in the three months to June was 1.3% higher than the same period a year ago. Sales volume for predominantly food stores increased by 0.7%. Within predominantly non-food stores, non-specialised stores rose by 4.6%, the largest rise since March 2008, when it was 4.7%. The largest decrease was in household goods stores at 6.2%, which now has 12 consecutive periods of negative growth. Non store retailing and repair increased by 9.4%. The seasonally adjusted value of retail sales for the three months to June was 1.4% higher than the same period a year earlier and June 2009 was 2.5% higher than in June 2008. Read more to top BBA: June figures for the main high street banks According to figures released this week by the British Bankers’ Association, there were modest increases in gross and net mortgage lending as a result of more new home loans being approved in recent months Personal deposit inflows rose sharply in June but consumer credit was again subdued. Lending to other financial companies rose, while lending to non-financial companies remained weak. BBA Statistics Director, David Dooks, said of the latest data: “Numbers of new home loans approved by the high street banks are recovering from the very low level last November and so far this year, gross mortgage lending has topped £50bn. After repayments and redemptions, the banks’ net rise in mortgage lending of £18bn in the first six months is in sharp contrast to lending by the rest of the market, which is still contracting. People are showing little appetite for unsecured borrowing and are generally keeping more money in their accounts. “Borrowing by non-financial companies continues to be weak, either because funds raised on capital markets are replacing bank borrowing or because companies are seeking to withstand the recession by reducing their debt". Read more to top Bank of England: Minutes of the MPC meeting held 8th and 9th July 2009 The Bank has published the minutes of the last meeting of the Monetary Policy Committee at which it was decided to maintain the Bank Rate at 0.5%. The minutes state that: “At the time of the May Inflation Report, the Committee had judged that keeping Bank Rate at 0.5% and purchasing £125bn of assets was most likely to keep CPI inflation on track to meet the target over the medium term. At its June meeting, the Committee had made no change to Bank Rate or the scale of the asset purchases. The key question for the Committee at the current meeting was whether it needed to make an immediate change to the total of planned asset purchases... “There had not been enough clear evidence to suggest that the £125bn target should be changed at this meeting. In the short term therefore, asset purchases would continue over the month ahead as they were still short of the target level of £125bn. The Committee would keep the scale of the programme under review, and the preparation of the August “Inflation Report” offered an opportunity to reassess the stock of asset purchases in the light of a fully updated assessment of the outlook for inflation and growth at its next meeting.” Read more to top Industry news False self-employment in construction: taxation of workers At the time of this year’s Budget, the Government announced that it remained committed to addressing the problem of “false self-employment” in the construction industry and would consult with a view to future legislation. Following that announcement, the Treasury and HM Revenue & Customs have this week issued a consultation outlining Government proposals for ensuring that construction workers engaged in an employment relationship are taxed appropriately. The Government defines “false self-employment” as a situation where workers are treated as self-employed for income tax and National Insurance purposes despite the fact that the way in which the work is carried out on a day to day basis demonstrates that there is an employment relationship. The Government’s proposal is to legislate so that in future all workers in construction are deemed to be employed for tax purposes unless they fall within three areas of exemption indicating that they are supplying more than their own labour in undertaking a job. Based on an estimate that there are some 300,000 so-defined falsely self-employed individuals in construction, the Government believes that it could raise an additional £350m a year from its proposal. HBF is separately seeking members’ views on this issue in order to respond to the consultation which closes in October. Read more to top HBF member briefing: Definition of zero carbon homes Following the consultation held earlier this year, Housing Minister John Healey made a written statement to Parliament on 16th July setting out the Government’s view on the definition of zero carbon homes that should apply from 2016. The statement also contains the Government’s decisions on advancing the eco-towns programme and announces a review of planning policy relating to climate change and renewable energy. A HBF members’ note summarising the main points in the statement can be read via the following link (HBF members only, please log in to view). Read more to top Quantifying the energy and carbon effects of saving water A joint study by the Energy Saving Trust and the Environment Agency released this week predicts emissions from hot water use will increasingly dominate the carbon footprint of new fully insulated housing – unless progressive regulation in energy efficiency is matched by higher water efficiency standards. Despite advances in water-saving technology and the introduction of sustainability standards for new housing, the growing popularity of power showers and frequent showering means we are still using the same amount of water today as we were ten years ago – around 150 litres per person per day. The key conclusions from the report are: There is a considerable potential for saving energy, CO2 and money through inclusion of water efficiency in energy retrofit programmes for existing housing stock; There is a risk that the current regulatory and voluntary frameworks for water use and plumbing systems in new build dwellings may not lead to lower CO2 emissions from water use, despite the advances in energy efficiency of boilers; There is considerable potential for synergy in communicating water efficiency and energy efficiency messages. However, there are also potential conflict points between water and energy efficiency messages that need to be understood by policy makers and regulators; The lack of knowledge regarding water use behaviour of individuals and what influences it is a major barrier to effective marketing of water efficient behaviour. Read more to top First schemes announced for pioneering Low Carbon Infrastructure Initiative Details of the successful schemes for the first tranche of funding from the Homes and Communities Agency’s (HCA) low carbon infrastructure initiative, totalling £11.85m, were announced this week. The initiative, a partnership with the Department of Energy and Climate Change (DECC) and Communities and Local Government (CLG), will provide funding for schemes across the country to benefit from new and existing low carbon energy plants by creating the infrastructure needed to link them up. Sir Bob Kerslake, Chief Executive of the Homes and Communities Agency, said: "These schemes use clean energy technologies that will be used innovatively to make a difference to people’s lives. The successful local partners have come together with energy providers to make low carbon energy work for communities on the ground, whether in new housing schemes or on existing housing estates. "We are not simply looking to reduce carbon emissions but also for ways of reducing people’s fuel bills and to reduce dependency on expensive fossil fuels. The lessons we will learn from seeing these ground-breaking schemes in action will make it easier to achieve the zero carbon homes by 2016 and to upgrade the environmental performance of the existing housing stock." Read more to top Government and political news Government review into the extent and impact of housing development on garden land Housing Minister John Healey confirmed this week that 127 detailed responses from local planning authorities have been received for stage 1 of the review into the extent and impact of housing development on garden land. Stage 2 of the review is being carried out by Kingston University, London and will consider the following: Whether there has been any increase or decrease in development in gardens from 1st April 2003 to 31st March 2008, and the reasons for any change; The impact of the brownfield definition and brownfield target in planning policy statement 3 on any increase or decrease in development in gardens; Whether development on garden land is widespread, or confined to a handful of authorities or certain areas of the country; The contribution that this type of development makes towards local housing delivery objectives and the impact that any restrictions on development on garden land would have; The role of the planning inspectorate in determining appeals for development on garden land—typified by accusations that they force the hand of local authorities by routinely overturning decisions on garden development; Whether local authorities are developing local policies in line with advice from Government and the policy in planning policy statement 3, and in particular whether local policies on brownfield development and trajectories are being developed; and Whether local policies developed in accordance with PPS3 are effective in supporting local authorities’ decisions on garden development at appeal, and to establish the common reasons for local objections to development on garden land. The aim is to conclude the review and make a further announcement and publish summary findings and evidence to Parliament after the summer recess. The purpose of the review is to establish whether there is a clear and genuine problem with the extent of housing development on gardens. The Government has also said it is committed to considering action if the evidence confirms a problem, provided that any changes do not have the effect of undermining its objectives on housing. to top HBF news Seventh Wales Economic Summit The HBF was invited to take part in the seventh all-Wales Economic Summit on Friday 17th July, to discuss the present financial crisis and its impact on the Welsh economy held by the Assembly Government. The meeting was held in Bangor and was chaired by First Minister Rhodri Morgan and attended by Deputy First Minister Ieuan Wyn Jones with responsibility for the Economy and Transport plus Secretary of State for Wales Peter Hain. The HBF made the summit aware of the urgent action needed by the Assembly Government in order to help the house building industry in the immediate term. We also pressed bank representatives on the need to increase lending, particularly to first time buyers and to tackle valuation issues. In this context Rhodri Morgan AM agreed to make the issue of bank lending a priority and stated that the next summit would focus on current lending practices from various lending institutions in Wales. to top HBF in the media HBF worked with the BBC to facilitate a positive report about the current state of house building that appeared on last Saturday’s BBC Breakfast news and across the news programmes on the BBCs television and radio stations. The report featured the HBF saying that a trend of more positive reports were starting to emerge, and whilst it was too early to say if these were the first signs of a recovery, it was certainly encouraging and the market did seem to have at least stabilized. The report also featured an interview and film from a previously stalled site on which work had restarted. HBF’s John Slaughter also appeared this week on finance channel Bloomberg talking about the current position, and on Radio 4’s ‘You and Yours’ programme to discuss the challenge of delivering zero carbon homes. Listen again to John Slaughter's interview (00:39:00) Hear HBF on Radio 4 today bulletin (skip to 7mins) to top Events The Housebuilding Innovation Awards – 5 November – book your table now!! Bookings are now being taken for tables at the prestigious HBF/Housebuilder magazine Housebuilding Innovation Awards. The shortlist for the Awards was unveiled earlier this month, and reveals the outstanding innovative achievements the industry has made in the past year. For full details go to http://www.house-builder.co.uk/awards/ The Awards, which are supported by the Government, have become among the most sought after in the industry as they recognise excellence in innovation in all aspects of the housebuilding business. The culmination of the Awards is the announcement of the housebuilding firms deemed to be the overall Innovators of the Year –previous winners have included Redrow, Barratt, Explore Living and Midas. The winners will be announced at a glittering black tie awards ceremony on Thursday November 5 at the Millennium London Mayfair Hotel. For further information please contact the events team on 020 7960 1646 or visit www.house-builder.co.uk to top The What House? Awards – Grosvenor House Hotel 20th November The What House? Awards, in their 28th year, are among the most prestigious and longest established in the new homes industry and all house builders, large and small, are invited to enter. Deadline: 31st July. "Winning a What House? Award will prove an even greater achievement in such a severe economic downturn, showing sustained quality of product, despite market conditions and widespread industry redundancies. It is time to crawl from the wreckage and shout about your new homes and re-engage returning buyers with your brand. An Award is a fantastic sales and marketing opportunity for companies to tell the public they build the best new homes in Britain," said Rupert Bates, Editorial Director of the What House? Awards and Show House magazine. The Awards, jointly sponsored by the New Homes Marketing Board reward housebuilders and developers across 23 categories. There are four new Housing Association categories this year, recognising the hugely important role the sector has in kick-starting the market by delivering thousands of affordable homes through various initiatives. The Awards will be presented at a gala luncheon at the Grosvenor House Hotel, London on Friday 20th November. For ticket information please contact Derek Smith (ds@globespanmedia.com or 020 7002 8300). Please click here www.whathouse.co.uk/awards to download entry forms and a prospectus. to top New Homes Week 2009 – get involved! Preparations are now well underway for New Homes Week 2009 that will take place between12th 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 to consumers by highlighting the benefits of new build homes, which will hopefully result in increased visitor levels to sites and thus drive sales. The New Homes Marketing Board and HBF will be producing a range of literature and marketing materials – including a 16 page colour glossy newspaper - and is encouraging members to get involved and organise events on their sites across the country. For more information and to get involved contact nhw2009@hbf.co.uk to top HBF Annual Planning Conference 2009 – Staverton Park, Daventry Planning viability 15th September 2009 In the current economic crisis much has been discussed about fiscal policy and incentives but what of planning policy in these challenging times? Is it business as usual or is the current model broken? The 2009 HBF Planning conference will seek to address this and more. Click here for booking details or contact kellie.kent@house-builder.co.uk. 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. Confirmed speakers include: John Healey MP, Housing Minister – invited Grant Shapps MP, Shadow Housing Minister Sir Bob Kerslake, Homes & Communities Agency Stewart Baseley, HBF Michael Coogan, Council of Mortgage Lenders John Stewart, HBF Imtiaz Farookhi, NHBC 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 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 top Rosie Hinchliffe View Previous Weekly News Summary
