HBF Weekly News Summary Friday 30 January 2009

Friday, 30 January 2008Top stories this weekHBF holds further discussions with Conservatives.....read more Nationwide house price index.....read more

Survey of English housing preliminary results 2007/08.....read moreMortgage lenders try to curb further rate cuts.....read morePrime Minister pledges to remove obstacles to councils building homes.....read moreQuick LinksHBF news Housing market news Industry news Economic news Government and political news Events HBF NewsHBF holds further discussions with Conservatives

HBF executive chairman Stewart Baseley met Conservative shadow housing minister Grant Shapps this week for further discussions on current housing issues. HBF briefed Mr Shapps on current business conditions, including the availability of mortgage finance and other lending issues. We also raised our concerns about the cumulative cost burden of regulation on housing delivery. The Conservatives are keen to maintain dialogue with HBF as they work towards further development of their housing policy and the associated devolution of more powers to local authorities.

to top Housing market newsNationwide house price index

The Nationwide house price index released this week reported that:

The average house price fell by 1.3% in January from £153,048 in December 2008 to £150,501 in January 2009;The annual rate of decline reached 16.6%, but the three month rate improved slightly from -4.2% in December 2008 to -4.0% in January 2009.

Commenting on the figures Martin Gahbauer, Nationwide's senior economist said:

"Levels of activity in the housing market have remained very low in recent months. Mortgage approvals for house purchase fell to a record low of 27,000 in November, and partial figures for December suggest there has only been a small improvement since then. House purchase approvals have historically been a good lead indicator of house price movements, and we would not expect to see a stabilisation of property prices until approvals recover significantly from current levels. In the past, approvals have tended to move in line with new buyer enquiries at estate agents. More recently, however, the relationship between buyer enquiries and approvals has broken down, with buyer enquiries recovering quite strongly in recent months while approvals have shown little sign of recovery.

"There are several possible explanations for why higher buyer enquiries have not translated into higher approvals. First, those enquiring about properties in the current economic environment are unlikely to be doing so with the same level of urgency as was the case 1-2 years ago.... Second, mortgages have become widely less available as a result of heightened economic risk, tighter lending criteria and a decline in the number of lenders who are active in the market. However, the increasing level of enquiries suggests that activity levels have a reasonable chance of recovering from their recent lows once an end to the recession is in sight and/or the recent Government interventions lead to an improvement in the availability of credit."

Download a copy of the Nationwide house price index

to topLand Registry: average house price falls 2% in December

Monthly house prices in England and Wales fell by 2% in December, according to the latest figures from Land Registry. The average house price is now £158,946 representing an annual decrease of 13.5%.

In London the average price fell 12.9% annually to £307,071 - a level similar to prices experienced in late 2006.

Every region in England and Wales experienced an annual decrease in its average property value. All regions also sustained a monthly decrease except Wales, which bucked the trend with a 1.7% rise and the North East, which underwent no change. The West Midlands saw the most significant monthly fall in prices at -3.6%.

The most up-to-date figures available show that during October 2008 the number of completed house sales fell by 60% to 41,123 from 102,597 in October 2007. In London only 4,604 house sales were completed in October 2008 compared with 13,354 in October 2007.

NAEA: First positive signs in 12 months of misery

Estate agents across the UK have reported a slight increase in activity at the end of 2008, the National Association of Estate Agents revealed this week.

After 12 months of misery, the NAEA's monthly market survey for December - traditionally a quiet month - revealed some positive signs in the market.

The number of house hunters registered with agents rose from 186 in November to 200 in December, while the number of properties available for sale on the average agent's books rose from 87 to 100 over the same time period.

While many agents had expected a fall in activity in December, the numbers of sales per agent held at six - still a very low figure historically - while the number of first time buyers (FTBs) as a percentage of new sales rose for the fifth month in a row.

NAEA president Chris Brown said:

"After 12 months of misery it is heartening to see that some agents across the country performed better than expected at the tail end of 2008. However nobody should be under any illusion that the housing market's difficulties have finished.

"Rather, these figures should be taken as hopefully suggesting that the market is, in some areas, beginning to bottom out. This process in itself will be a long one, and any recovery will require help from Government to succeed - most immediately in the form of a complete suspension of stamp duty."

to top Industry newsSurvey of English housing preliminary results 2007/08

This report published by Communities and Local Government presents some preliminary findings from 15,622 households that were interviewed for the survey of English housing in the year beginning April 2007. Key findings included:

Owner occupation remained by far the most common form of housing tenure in England and there were an estimated 14.6 million owner occupiers in 2008, down slightly from 14.7 million in 2007;

Much of the decline in the proportion of owner occupiers may be attributed to an increase in the size of the private rented sector, from 2.7 million in 2007 to nearly 3.0 million in 2008. Private renting accounted for 13.9% of all households, its biggest share since the 1970s;

The proportion of younger households (those aged under 30) with a mortgage fell from 40% in 2001 to 32% in 2008; whilst over the same period the proportion of younger households in private renting rose from 33% to 45%;

13% of households with a mortgage reported that at some time in the previous 12 months they had been in arrears or had experienced some other difficulty in paying the mortgage;

There were around 565,000 overcrowded households in England - about 2.7% of all households. London was the region with the highest overall rate of overcrowding (6.8%); it also had the highest of regional rates for individual tenures: 3.0% of owner occupiers; 12.7% of social renters and 9.8% of private renters in London were overcrowded;

In 2007/08, 24% of social renters and 56% of private renters said that they expected to become homeowners eventually. Of these, 28% of the private renters said they expected to buy within the next two years, compared to 12% of the social renters.

to topService launched to enhance planning system

In order to increase the capacity and capability of the Planning Inspectorate in England and Wales RICS Dispute Resolution Services has been appointed to manage an innovative new service, Experts Appointments in Planning Service (EAPS). The service will provide experts to advise on development plan documents, speeding up and streamlining the plan making process.

The expert advisers will support the work of Planning Inspectors on major casework and local development plan work submitted for independent examination. Where there is a need for specialist evidence to be tested the Inspectorate will now have quick and efficient access to the relevant professional advice. It will also enable the Planning Inspectorate to further assist Local Planning Authorities in making the right judgements in these more challenging times.

Martin Burns, director of RICS Dispute Resolution Services commented:

"This service will be a welcome benefit to the planning system by adding a valuable resource which will assist in speeding up the planning process. This initiative is indicative of the Inspectorate's determination to modernise the planning system, and it represents a great opportunity for a wide range of professionals to work as expert advisers in a variety of areas related to planning and planning issues."

Land use change statistics (England) 2007 - provisional estimates (January 2009)

The latest national statistics on land use change were released under the auspices of the UK Statistics Authority on 29 January 2009.

Statistics in this release present provisional figures on land use change in England.

Initial estimates for 2007 were published in May 2008. This release provides the last of three revised estimates for 2007 for changes on previously-developed land and the average density of new dwellings. For some topics 2007 data are not yet robust and so the latest robust data available is presented.

In 2007, on a provisional estimate:

77% of dwellings (including conversions) were built on previously-developed land, compared to 76% in 2006;New dwellings were built at an average density of 44 dwellings per hectare, compared to 41 dwellings per hectare in 2006;2% of dwellings were built within the Green Belt (unchanged since 2004) and 4% of land changing to residential use (from any use) was within the Green Belt, compared to 5% in 2006;10% of dwellings were built within areas of high flood risk and 6% of land changing to residential use was within areas of high flood risk, compared to 10 and 7% respectively in 2006.

NHBC: 2008 home starts lowest on record

NHBC new house building statistics showed that the number of applications from house builders to start new homes in the UK fell by almost half during 2008 compared to the previous year.

NHBC's year-end figures showed that they received 106,894 applications to start new homes in the combined private and public sectors during 2008, 47% lower than in 2007 (200,697). Of that total, 72,114 related to private sector activity (i.e. excluding housing associations), showing a 56% decrease on the previous year (163,535). Housing Association figures revealed a less dramatic decline in applications to start social housing properties, with starts totalling 34,780 in 2008 - a decrease of 6% on 2007 (37,162).

Imtiaz Farookhi, NHBC chief executive, said:

"Our figures for the calendar year 2008 are the lowest since our computerised records began and are 18% lower than the previous lowest year, which was 1992 when 130,998 new homes were started. In 2008 several regions experienced a decrease in new home starts in excess of 50% when compared with the previous year. These include Scotland, Wales, Northern Ireland, North East, Yorkshire and the Humber, North West and the West Midlands."

The total number of new home completions also fell in 2008 compared to the previous year. NHBC statistics showed UK new build (private and public sector) completions totalled 149,238 in 2008 - 20% lower than the 186,505 new homes that were completed in 2007.

Additional year-end figures showed that the average number of new homes sold each day in the UK during 2008 was 433, a decrease of 24% on the previous year (572).

to topNew housing coalition for South East

Three housing organisations have come together to form the South East Housing Coalition and aim to provide a joint voice for affordable housing in regional economic planning.

The Chartered Institute of Housing (CIH) South East, Shelter and the National Housing Federation (NHF) will pool their regional expertise, research and resources to provide more coordinated engagement with regional bodies in the South East.

Graham Maunders, chair of CIH South East, said:

"This new coalition between CIH, NHF and Shelter in the South East provides a positive example of partnership working across the sector in the current difficult times and will help us tackle some of the challenges ahead."

Economic newsMortgage lenders try to curb further rate cuts

The Council of Mortgage Lenders (CML) has called on the Government to impose an industry-wide collar on existing base-rate tracker mortgages held by more than three million homeowners.

It argues that a collar preventing tracker mortgage rates from falling to 0% "made logical sense" because historically low interest rates were hampering the banks as they try to attract new savings deposits.

Only 300,000 homeowners have mortgages that already have enforceable collars written into the small print. An industry-wide collar would prevent a further 3.6 million homeowners on tracker deals from benefiting from future cuts in the Bank of England base rate.

Michael Coogan, director general of the CML, said:

"This is a unique and innovative solution to a unique situation. Low interest rates are a good deal for borrowers in the short term, but it is damaging the ability of lenders to fund new mortgages."

The CML said that the controversial move would need the backing of the Financial Services Authority and the Government.

to topNAEA - repossession figures are of grave concern

Following the announcement from the FSA last week that repossessions increased by 92% in the third quarter of 2008, Peter Bolton King, chief executive of the National Association of Estate Agents (NAEA), commented:

"Worryingly, these figures appear to show that the six month delay on repossession orders that many of the banks announced at the end of last year was not taken soon enough. It is also an urgent reminder that the measures taken by the Government to release credit into the market must begin to take swift effect.

"Most importantly it demonstrates the vicious cycle of recession - in which unemployment leads to missed mortgage payments and repossessions, which in turn discourages banks from lending and, ultimately, stops potential buyers getting onto the property ladder in the first place.

"The Government and the banks must abandon scattergun rescue packages and co-ordinate on an overarching recovery plan to pull us out of this morass as quickly as possible."

Latest CBI Distributive Trades Survey

According to the CBI's latest Distributive Trades Survey, retail sales volumes fell sharply in the year to January, although the rate of decline was slightly slower than that in December. Retailers are expecting a similar fall in sales volumes next month.

to top Government and political newsPrime Minister pledges to remove obstacles to councils building homes

Speaking at a New Local Government Network conference yesterday, the Prime Minister said he wanted to help local authorities build homes where they could do so effectively. In his speech, he said:

"But we must also look to support further action on housing supply. We know there is still significant demand for housing and there is clearly spare capacity in the house building sector.

"So we must consider all options if we are to meet the needs and aspirations of individuals and families across the country as a whole.

"In the past we have placed restrictions on local authorities delivering social housing.

"But today let me be clear: if local authorities can convince us that they can deliver quickly - and cost-effectively - more of the housing that Britain needs, and if local authorities can build social housing in sustainable communities that meets the aspirations of the British people in the 21st century, then we will be prepared to give them our full backing and put aside anything that stands in their way.

"We will not allow old arguments and ideologies to stop us getting on with the job when there are families who need homes, when there are bricklayers, carpenters and electricians ready and willing to work, and when there are construction companies ready to build houses."

to topTCPA: Eco-town victory means radical new standards of development can now go ahead

Responding to the High Court judgement over the Government's eco-towns project, in which campaigners have failed in their bid to block the development, Gideon Amos OBE, chief executive of the Town and Country Planning Association (TCPA) said:

"The Eco-town programme is the UK's key exemplar in how we will address and live with climate change in our homes and neighbourhoods. The TCPA is delighted the issues people have raised on planning matters have now been thoroughly examined by the High Court which has given the all clear. This allows the programme to proceed. Due process remains essential for all communities in agreeing locations but we must not be diverted from the urgency of reducing emissions, adapting to a new climate and creating inclusive communities in which people and families can thrive and enjoy life."

EventsHBF ‘Building towards a brighter future' conference - Shapps and Kerslake to speak.

Tuesday 17 March 2009, Central London

Conservative shadow housing minister Grant Shapps heads a heavyweight list of speakers for this year's HBF Policy Conference including HCA chief executive Sir Bob Kerslake, CML director general Michael Coogan, housing expert John Callcutt, Zero Carbon Hub chief executive Neil Jefferson and, fresh from completing the Killian Pretty review David Pretty. Other speakers include Richard Donnell, Christopher Hill and industry recognised experts from HBF's own policy team.

The conference will be chaired by HBF executive chairman Stewart Baseley and will look at a range of issues and challenges currently facing the industry.

For more information and details of the full agenda please click here or contact the events team on 020 7960 1646 or events@hbmedia.co.uk

HBF Annual Industry Lunch 2009 - Beckett to address.

Wednesday 22 April, Hyatt Regency Hotel, central London.

Housing minister Margaret Beckett will address this year's HBF Annual Industry Lunch that will take place on Wednesday 22 April. The event provides a unique opportunity to catch up with colleagues and other leading industry figures following what has been a difficult year. Further details and a booking form are available please click here.

Alternatively contact the events team for further details on 020 7960 1646 or events@hbmedia.co.uk

Hope Challenge: 12 - 14 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 next summer. Hope Challenge 2009 is a challenge event for teams of 3-6 people and 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
1 overnight shelter to build, and sleep in
1000m of hill ascent and 20 miles of trekking
A balance of fitness, strategy and team work

We are 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.

Click here for more information and entry requirements

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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/

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Rosie Hinchliffe

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