Friday, 28th August 2009 Top stories this week Nationwide: House price bounce extends into August......read more BBA: July figures for the main high street banks.....read more UK output, income and expenditure.....read more HCA: Next round of low carbon projects confirmed.....read more Government to appoint Chief Adviser on construction.....read more Quick Links Housing market news Economic news Industry news Government and political news Events Housing market news Nationwide: House price bounce extends into August Nationwide’s house price index, published this week, reported that: The average house price rose by 1.6% in August, from £158,871 in July to £160,224; The year-on-year decline in average house prices slowed from -6.2% to -2.7%; Nationwide state that low interest rates are helping to underpin house prices for the moment. Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said: “The price of a typical house rose for the fourth consecutive month in August, increasing by 1.6% on a seasonally adjusted basis. The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – rose from 2.7% in July to 3.3% in August, the highest level since February 2007. At £160,224, the average price of a typical UK property is still slightly lower than 12 months ago. However, the annual rate of change rose further in August, from -6.2% to -2.7%. Over the first eight months of 2009, the seasonally adjusted index of house prices has risen by 3.2%, though relative to the October 2007 peak it is down by 14.4%.” Read more to top NAEA reaction to Nationwide figures On the latest Nationwide figures, the National Association of Estate Agents President Gary Smith commented: “The latest statistics from Nationwide appear to confirm that the housing market has finally bottomed out and indications are that we are hopefully moving to a point where the gradual recovery in prices witnessed this year will be sustained. “Whilst it is true that conditions in many areas across the country remain tough, we must now concentrate on how the Government and major lenders can build on this evidence of new consumer confidence to further consolidate what will no doubt be the lynch-pin of general recovery in the UK economy. “As families now begin to perceive that with realistic prices, historically low interest rates together with the potential for capital growth, they will upgrade and move through the system bringing their own houses onto the market and boosting supply. “However to ensure these aspirations are realised lenders have a huge role to play in the coming months and the NAEA intends to monitor the situation very closely to ensure they play it." Read more to top Economic news BBA: July figures for the main high street banks The July figures released by the British Bankers’ Association for the main high street banks showed increases in the number of mortgage approvals and the amount of new lending, though this was below seasonal expectations. Offsetting repayments gave rise to a net mortgage lending figure of only £1.6 billion for the month which was the lowest since October 2000 and lower than the previous six month average. Unsecured lending has continued to be weak and the trend in deposit levels appears to be improving. BBA Statistics Director, David Dooks, said of the latest data: “The numbers of mortgages approved for house purchase each month by the high street banks have continued to recover from last November’s low point, but new lending is largely being offset by repayments, so that net rises remain relatively weak. Unsecured borrowing is subdued, with households focused on managing their personal finances and building up deposits. “Lending to non-financial companies has contracted over the last year, as would be expected given both the recession and large corporates using the capital markets to raise funds, but amounts outstanding are only 3% lower than a year ago.” Read more to top UK output, income and expenditure According to statistics released by the ONS this week, in the second quarter of 2009, UK gross domestic product (GDP) in volume terms fell by 0.7% compared with the previous quarter (revised from a fall of 0.8% published in the preliminary estimate). The level of GDP is 5.5% lower than the same quarter of 2008. Between quarter one and quarter two of 2009: The volume of output in the production industries fell by 0.6%, within which manufacturing fell by 0.2%; Output of the service industries decreased by 0.6%; Construction output is estimated to have fallen by 2.2%; In real terms, household expenditure fell by 0.7% and gross fixed capital formation fell by 4.5%; GDP at current market prices showed zero growth. Read more to top CBI: High street confidence begins to stabilise despite further sales falls High street sales fell for the fourth month running in the year to August, but retailers are no longer feeling pessimistic about the outlook for their business situation in the coming months, the CBI said this week. The business organisation also revealed that stocks have fallen further to a level that is considered to be just adequate, and that job cuts were heavier than in May's survey. Answering the latest CBI Distributive Trades Survey, 34% of retailers said that their volume of sales in the year to August had risen, while 51% said they fell. The resulting rounded balance of -16% was similar to sales declines in the previous three months, and was better than expected (-23%). A similar fall in sales is predicted for September (-14%). Sales for the time of year were reported to be poor by a net 25% of retailers, while the three-month moving average of sales volumes, which smoothes out monthly peaks and troughs, remained as weak as in July (-16%). The rate of increase in retail prices picked up from the three year low seen in May, with a balance of 23% reporting a rise in prices. This follows a year in which price inflation had slowed considerably, and retailers now expect to raise prices at a faster rate in September (+34%). After an 18-month period of distinctly negative business sentiment, retailers are no longer feeling so pessimistic about the outlook for their general business situation. The balance of firms expecting a deterioration over the next three months is very modest (-2%) and the least negative since November 2007 (a balance of -1%). Read more to top CML: Scottish mortgage market begins to stabilise in second quarter New data from the Council of Mortgage Lenders shows lending activity in Scotland began to stabilise in the second quarter, mirroring the trend seen in the UK more widely. In the second quarter of 2009 there were 11,400 house purchase loans taken out in Scotland, a 50% rise from 7,600 in the previous quarter, but 39% below the same quarter a year earlier. The rise in mortgage lending in Scotland was spread evenly across first-time buyers and home movers. There were 4,300 loans to first-time buyers, up 54% from the previous quarter, and 7,200 loans to home movers, up 53% from the first quarter. There is some evidence that the tightening in lending criteria is slowing. First-time buyers typically put down a 25% deposit in the second quarter, unchanged from the previous quarter but up from 13% a year earlier. Home movers typically borrowed 70% of the property’s value, down from 71% in the previous quarter and 73% in the same quarter a year earlier. Income multiples rose modestly in the second quarter. First-time buyers typically borrowed 2.85 times their income (3.06 across the UK), up from 2.74 in the first quarter of 2009. Home movers typically borrowed 2.55 times their income (2.73 across the UK), compared with 2.51 in the previous quarter. Scottish first-time buyers typically spent 14.1% of their income on mortgage interest payments (compared with 15% across the UK), the lowest share since the first quarter of 2006. And interest payments typically consumed 11.1% of Scottish home movers’ income (compared with 11.3% across the UK), the lowest share since the second quarter of 2004. Mortgages are slightly more affordable in Scotland. This is principally because house prices remain lower than the UK average, leading to modestly lower average income multiples and debt servicing costs. Read more to top Industry news HCA: Next round of low carbon projects confirmed Details of the successful schemes for the second round of funding from the Homes and Communities Agency’s (HCA) low carbon infrastructure initiative, totalling £8.80m, 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. Housing Minister John Healey said: “Homes account for a quarter of carbon emission so reducing this is a major part of our efforts to tackle climate change. By making all new homes zero carbon from 2016 we are already leading the way to a much greener housing stock, and lower energy bills for residents. But we also have to make existing homes greener, and this funding will help both new and existing developments to access clean energy sources.” Read more to top Impact Assessment of the European Commission’s proposed Construction Products Regulation The CLG have published the finalised version of the partial impact assessment that was published last August. It takes into account responses to the consultation on the EU's proposed Construction Products Regulation. The changes are only minor, and include some discussion on impacts for specific sectors based on information provided by manufacturers in their responses. The Construction Products Directive (CPD) concerns CE marking and testing requirements for construction products like windows, insulation and doors. Read more to top Government and political news Government to appoint Chief Adviser on construction The Government has set out more details of its plans to appoint a Chief Adviser to Government on Construction to equip Britain's construction industry with the skills and knowledge to become competitive in the 21st century. The Adviser will chair the Board responsible for securing value for money from the Government's procurement of construction, promote innovation and sustainability in the industry, and be responsible for ensuring Government takes full account of the impacts of the regulatory regime on the construction industry. The Chief Construction Adviser will be independent and report to the Department for Business (BIS) and HM Treasury Ministers. The successful individual will:- Chair a new Construction Category Board, which will build on the existing Public Sector Construction Clients Forum (PSCCF), to oversee the implementation and further development of best value Government construction procurement; Chair an enhanced sustainable construction strategy delivery board to help ensure policy regarding the industry is effectively co-ordinated; Assess the key barriers to growth in the UK's Low Carbon construction sector to ensure the UK industry is well placed to serve developing needs and markets; Work with the industry, through the Strategic Forum for Construction, to deliver the industry improvement agenda, including the Construction Commitments; Promote innovation in the sector, working closely with the Technology Strategy Board and other funding bodies; Co-ordinate the Whitehall response to reports featuring construction. Ian Lucas, the Business Minister with responsibility for construction, said: "We have taken our time to get the role right to ensure that it fits well with a range of new and existing initiatives. But I have heard the calls from the Construction Industry loud and clear since my appointment in June. We are now pressing hard ahead with recruiting. I want to see a high quality individual in place by November". Read more to top Social housing sales to sitting tenants, England, 2008-09 The latest statistics on social housing sales to sitting tenants in England were released under the auspices of the UK Statistics Authority this week. These statistics cover sales to sitting tenants through schemes such as Right to Buy, Right to Acquire and Social HomeBuy. They do not include Low Cost Home Ownership sales through shared ownership schemes. Key points from the release are: There were an estimated 7,300 total social housing sales to sitting tenants in England in 2008-09. This is less than half the 19,360 sales recorded in 2007-08 and the fifth consecutive annual decline; There were an estimated 3,860 Right to Buy sales in England in 2008-09 (53% of total sales), a decrease from 15,110 sales in 2007-08. Of these, 2,860 sales were of local authority properties, and 1,000 were of Registered Social Landlord properties; The average market value of local authority properties purchased through the Right to Buy scheme in 2008-09 was £107,250, with average capital receipts of £81,840 and average discount of £25,410; There were 180 sales of Registered Social Landlord properties through the Right to Acquire scheme in England in 2008-09 (3% of total sales), down two-thirds from 540 in 2007-08; There were 100 sales through the Social HomeBuy scheme in England in 2008-09 (1% of total sales), compared with 160 sales in 2007-08; A further 1,460 sales in 2008-09 (20% of total sales) were disposals of RSL properties to the private sector, while the remaining 1,700 (23%) were other shared equity and outright sales to sitting tenants. Read more to top Events New Homes Week – 12-20th September Just under 2000 of the UK’s house building sites have signed up to receive New Homes Week site packs. Packs will be distributed in early September to all registered offices in time for the New Homes Week. The New Homes Week media pack was this week issued to the national, regional and local media. The pack contains five press releases highlighting different benefits of new build homes. Members are urged to take advantage of the media profile New Homes Week will generate for the industry by organising events on their sites during the week. If they then contact their local newspaper with details of the events this should dovetail well with the umbrella media campaign being run by the New Homes Marketing Board and generate some positive and interesting news stories for the local and regional media that is of real interest and benefit to their readers – and hopefully lead to an increase in site visitor levels. The New Homes Marketing Board has taken out advertising to promote the new homes market and New Homes Week across the national and regional media. Members are also being urged to carry the New Homes Week logo on their own advertising to generate some real momentum for the initiative. And don’t forget that the www.new-homes.co.uk search engine site is free until the end of September. As the site that will be promoted by the New Homes Marketing Board on all its literature and materials, if members want to ensure they reap the full benefits they need to make sure their sites are registered. For more information about New Homes Week contact nhw2009@hbf.co.uk or visit www.nhw2009.co.uk or call Steve Turner on 020 79601606 to top Housebuilding Innovation Awards 2009 - BOOK NOW! 2 weeks left until the early booking deadline Housebuilder Media is delighted to announce that Gyles Brandreth, broadcaster, journalist and ex MP, will be presenting at the Housebuilding Innovation Awards on Thursday 5th November 2009. The shortlist for the Awards was unveiled earlier this month, and reveals the outstanding innovative achievements the industry has made in the past year. Click here for full details 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 5th November at the Millennium London Mayfair Hotel. Book by 11th September to receive your 15% discount off of the booking price. For further information or a booking form please contact the events team on 020 7960 1646 or visit www.house-builder.co.uk 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 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. to top Housing Market Intelligence Conference – Housing Minister confirmed BOOK NOW! - 2 weeks left until the early booking deadline Savoy Place, London -Tuesday 13th October 2009 Housing Minister John Healey has now been confirmed as a speaker for October’s HMI Conference completing a heavy weight line up of expert speakers for the industry’s leading annual policy conference. Confirmed speakers now include: John Healey MP, Housing Minister 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 For further information or a booking form 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/Steve Turner View Previous Weekly News Summary
