Friday, 26 September 2008Top stories this weekOFT: Home building's clean bill of health....read moreRightmove: housing market "in limbo until financial crisis abates".....read moreHBF at the Labour Party Conference.....read moreQuick Links Industry newsHousing market newsEconomic newsGovernment and political newsEventsTony CavannaIt is with great regret that we have to inform you of the death of Tony Cavanna, a long-standing member of the HBF Council, particularly active in the 1970's - culminating in his appointment as HBF President in 1977.After his term of Presidency he continued to play a prominent role, particularly in the South West where he was Regional Chairman until the mid 1980's. He remained a member of the HBF Council until the early 1990's.Tony Cavanna was also a long serving HBF representative on the National House Building Council, serving many years on its Executive Committee and on its Council. Industry newsOFT: Home building's clean bill of healthThe Office of Fair Trading (OFT) has published the results of its market study into the home building sector. Considering the depth of the investigation, and the range of possible outcomes there could have been, the results were extremely positive and gave the industry a largely clean bill of health.The OFT found little evidence of competition problems with the delivery of new homes in the UK. The report says that on the whole barriers to entering the market appear low, and that prices are set through home builders competing for sales against each other and are significantly constrained by the prices of existing homes. There is no evidence that individual home builders have persistent or widespread market power giving them the ability to restrict supply in order to inflate prices.The OFT also found that home builders do not build up land banks unnecessarily, but only as a result of the convoluted planning system, of which the report is critical:"The time lag and uncertainty involved in obtaining planning consent and building are such that a land bank will naturally span over a number of years."The report also goes on to say that the holder of the biggest land bank is in fact the public sector, and if the Government wants to deliver more housing, then more of this land should be released.The study did raise a number of customer service and consumer issues, but these are being addressed through a code of conduct and redress scheme being worked up by industry bodies - see the Steering Group press release below.John Fingleton, OFT Chief Executive, said:"Our study gives the home building market a largely clean bill of health, with no evidence that individual home builders have the ability to restrict supply in order to inflate prices, or hoard land for anti-competitive reasons.""However we believe that the homebuyer needs more protection when buying a new home, and we have worked hard with the industry to help it develop appropriate self-regulation."Read more Download a copy of the OFT market study View a copy of the HBF member briefing regarding the OFT market study View steering Group Press releaseto topHBF reaction to OFT findingsResponding to the results published by the OFT, Stewart Baseley, Executive Chairman of the Home Builders Federation said:"After months of probing, the OFT's report is a real boost for the industry. It is a credit to home builders that following such an in-depth examination they have received such a clean bill of health. In such challenging times for the whole industry, the findings are very welcome. The report should also give potential buyers of new homes real confidence in the product they are purchasing." The OFT found that where there were faults on new build homes they were usually minor, and were in the vast majority of cases sorted out by the builder very quickly, and gave no cause for concern to the home owner. The report did identify a small number of cases where more significant problems were encountered. To help address these instances, the industry has already initiated moves to establish a code of conduct that will ensure even better levels of customer service. The OFT has been in discussions with the cross industry steering group driving the code and is happy with progress being made, recognising it to be the most 'speedy and cost effective solution'. Mr Baseley added:"Whilst the report is extremely positive, house builders are always striving to find ways of improving the service they provide still further. Establishing a self regulated code of conduct will help us do that, and it is credit to the industry that the OFT agreed this is the best way forward." Read more John Slaughter, Director of External Affairs, was interviewed on the results of the study on both Radio 5 Live's "Wake up to Money" and BBC1's Breakfast programme on 25 September.Listen again to Thursday's edition of Wake up to Money Media coverage of the report was generally positive and recognised that the industry had been given a clean bill of health. Read examples of the coverage below;Business leaders and unions unite to plead for immediate interest rate cut (Guardian)OFT Gives House Building Industry Clean Bill Of Health (Housing News)OFT says house building sector is broadly competitive (Property People Magazine)OFT clears housebuilders of house pricing allegations (Contract Journal) House builders to set up code of conduct following OFT inquiry (CN+)OFT clears developers of hoarding (Local Government Chronicle)OFT clears housebuilders - but raises zero-carbon fears (Building)to topNew households continue to rocket despite economic downturnThe latest Town and Country Planning Association Tomorrow Series paper "New and higher projections of the future population in England: A first look at their implications for households and housing" launched at the Labour Party Conference warns that an unprecedented growth in household numbers, in combination with crisis in the credit market, is massively extending the shortfall of housing. TCPA Chief Executive, Gideon Amos, said:"This first independent assessment of the latest household projections shows continued escalation in newly forming households at a time when the house building industry is unable to match demand due to the credit crunch. The worrying implication of this report and its picture of a burgeoning older population - 3.7m of the population increase are aged 65 and over - is the spectre of rising overcrowding, homelessness and social exclusion.""The gap between the homes we need and the houses available is forecast to become increasingly stark with overcrowding the only option for many who are unable to obtain mortgages. Even when credit conditions improve and mortgages again become available the current undersupply of additional homes, will quickly risk a return to house prices spiralling beyond people's reach."Homes taken out of North West reviewHousing numbers will no longer be covered in the partial review of the North West's regional spatial strategy (RSS), it has emerged.Regional leaders forum 4NW said it will continue collecting the evidence base needed for a review but at this stage it is to concentrate instead on Gypsy, showpeople and traveller sites and regional car parking standards.The shift in remit comes amid flagging housing market conditions. It follows a July letter from Housing Minister Caroline Flint in which she confirms that the timetable for the partial review was not set in stone.Read more The Planning Inspectorate: The registration of planning appeals is back on trackThe Planning Inspectorate has published its 10th Newsletter this week. In an article by Si Bliss, Section Manager on Planning Casework Service Registration, he states that "... despite receipts in the 3 months to June showing no signs of a reduction, we are now, typically, registering new appeals within 3 days of them being received."Read more to topHousing market newsRightmove: housing market "in limbo until financial crisis abates"Rightmove's house price index released earlier this week reported that house prices were continuing their downward trend and that the housing market had little chance of beginning its recovery until the banking crisis abated. The index also showed that:Economic woes deter new sellers from entering the market, reducing the unsold inventory;New listings per estate agent were the lowest September average ever measured by RightmoveThe number of properties on the market below £175k only increased by 0.5% in spite of Government stamp duty incentivesThe first reduction for seven months in buyer choice as average unsold stock fell from 79 to 78The downward trend continued as new sellers trimmed another 1% off average asking prices, from £229,816 in August to £227,438 in SeptemberMiles Shipside, Commercial Director of Rightmove, commented:"The housing market is in limbo and will remain so until financial institutions address the disastrous state of the mortgage funding markets. We are now seeing the lowest level of new sellers for years..."The changes in stamp duty are just tinkering at the edges of the system, and at best will give slightly more choice to first-time buyers who will be able to put the 1% that they save towards the minimum 10% deposit they are now likely to require."Download a copy of the Rightmove house price index to topProperty industry argues for build to let at RESI conferenceLeading figures from the property industry outlined how changing attitudes to renting and developing a branded build to let sector could be a vital component in meeting government housing targets and giving consumers the quality homes they want.Industry figures from the British Property Federation, Grainger, Unite and CB Richard Ellis, believe a large-scale branded rental sector to mirror Germany or Holland would be the shot in the arm needed for UK housing. The industry hopes that a government review due on 23 October will initiate a step change in how rental is perceived.Read more NAEA members report a market slowdown as stamp duty indecision takes holdMembers of the National Association of Estate Agents (NAEA) reported last month that the housing market was clearly faltering as a result of the Government's indecision regarding stamp duty, combined with the usual holiday slowdown and the current overcast economy.Chris Brown, President of the NAEA, comments: "August was a tough month for the industry, both for the consumer and estate agent. It was a month of indecision and this evidently has had a profound effect on the market, as many consumers adopted a ‘wait and see' attitude, whist waiting for a decision from the Government on stamp duty.""However, now that a decision has been made, it is a positive push in the right direction but the stamp duty announcement is not enough to make a difference to the entire market. The Government needs to do more to address the problems in the market if anything is to change and improvements to be made. The NAEA continues to urge the Government to offer first-time buyers a stamp duty holiday."Read more to topEconomic newsAugust figures for the main high street banksAccording to the British Bankers' Association, net mortgage lending rose only by £2.1bn in August; less than half the average rise over the previous six months. The number of approvals for house purchase was again very low, some 64% lower year on year, and those for remortgaging also fell. Consumer credit rose by £0.4bn in August, slightly above the previous six month average of £0.3bn. Personal deposit growth continued to be weak and the annual growth rate declined by 0.7% to 4.0%.BBA Statistics Director, David Dooks, said of the latest data:"The low number of mortgage approvals in previous months predicted lower gross lending in August and, together with remortgaging, a much weaker net lending figure than of late resulted. Falling property prices, economic pressures on households, tighter lending criteria and anticipation of the Government's announcement on stamp duty all suppressed or delayed demand in August and will continue having an impact in the months ahead.""Monthly fluctuations in consumer credit and deposits reflect the behaviour of families repaying as much as they spend on credit cards and using their current accounts for expenditure."Read more CBI: Shoppers stay away from faltering high street, while supermarket sales growThe UK high street endured another month of falling sales and expects the hard times to continue in October, but supermarkets enjoyed solid sales growth, the CBI said this week. Responding to its latest Distributive Trades Survey, 21% of retailers said that the volume of sales in the first half of September was up on last year, while 48% said they were down. The resulting balance of -27% marks a third consecutive month of sharply contracting sales, but is better than firms had feared (-42%), and is an improvement on the survey record low in August (-46%). Nevertheless, the outlook for October remains very weak (-30%). The three-month moving average of sales volumes, which smoothes out monthly volatility, continued on its downward trend to a balance of -36%.Read more to topGovernment and political newsHBF at the Labour Party ConferenceHBF Director of External Affairs, John Slaughter, held meetings with a wide range of politicians at this week's Labour Party Conference in Manchester. He met Housing Minister Caroline Flint and Chief Secretary to the Treasury Yvette Cooper as well as several MPs and senior councillors to brief them on current conditions and explore possible additional initiatives to assist the market and safeguard industry capacity.to topUK CLG letter to party leadersThe Corporate Leaders Group on Climate Change has written a letter to the leaders of the main political parties to call for "transformational change" across the economy to meet the scale of threat posed by climate change.The Corporate Leaders Group, developed and run on behalf of the Prince of Wales by the University of Cambridge Programme for Industry, argues that "incremental change will not do" and that "there will need to be significant investment in major infrastructure projects in order to achieve year on year reductions in emissions."The group is seeking meetings with the UK's main party leaders this autumn to discuss their proposals.Read more Download a copy of the letter to topEventsHousing Market IntelligenceWednesday 15 October - Savoy Place, LondonThe 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 Housebuilding Innovation Awards 2008Thursday 23 October - Millennium Mayfair Hotel, LondonNow 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 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. to topHBF Technical ConferenceWednesday 12 November, University of YorkThis 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=eventsandmeetingsFor HBM events visit http://www.hbmedia.co.uk/ to topRosie HinchliffeView Previous Weekly News Summary
