Friday, 5th June 2009 Top stories this week Cabinet reshuffle under way.....read more HBF gives evidence to CLG Select Committee.....read more Halifax house price index......read more Nationwide: House prices rise for second time in three months.....read more Bank of England: Lending to individuals April 2009.....read more LGA: New guidance on planning practice.....read more Quick Links Government and political news HBF news Housing market news Economic news Industry news Events Government and political news Cabinet reshuffle under way Following a week of dramatic political news – including Hazel Blears’ resignation as Communities Secretary – and yesterday’s local and European Parliament elections, the Prime Minister initiated a Cabinet reshuffle this morning. The main announcements made so far are that Alistair Darling will remain Chancellor, while Yvette Cooper leaves the Treasury team to become the new Work and Pensions Secretary. John Denham is to replace Hazel Blears as Secretary of State for Communities and Local Government and Alan Johnson moves from Health to be the new Home Secretary. There is no news at the time of circulation of further changes. HBF will brief members on the full details of the reshuffle when these are available. to top HBF News HBF gives evidence to CLG Select Committee HBF Director of Economic Affairs, John Stewart, gave evidence to the CLG Select Committee’s reconvened inquiry on “Housing and the Credit Crunch” on 1 June together with other housing sector witnesses. Questioning covered a range of issues including the effectiveness of the support measures announced in the Budget, whether the market is bottoming out, skills and capacity for the upturn, whether the Section 106 system is broken, finance for RSLs, repossessions and low cost home ownership. Witnesses were also asked what further action they thought was needed. The session provided a useful opportunity for HBF to communicate key messages on the business issues created by current conditions, the need to implement successfully measures to improve the availability of mortgage finance and HomeBuy Direct and Kick Start and to explain the reasons why the scale of planning contributions and regulatory costs need to be reduced. to top Housing market news Halifax house price index The Halifax house price index reported this week that: House prices increased by 2.6% in May to £158,565. This increase followed three successive monthly declines of between 1.8% and 2.3%; Prices in the three months to May compared to the previous three months (a better indicator of the underlying trend) were 3.1% lower. The rate of decline on this measure has slowed, however, from the 5-6% recorded consistently between June 2008 and January 2009; The annual rate of change in house prices(measured by the average for the latest three months against the same period a year earlier) fell from -17.7% in April to -16.3%; The house price to earnings ratio has declined from a peak of 5.84 in July 2007 to an estimated 4.36 in May 2009. The ratio is now at a level last seen in January 2003; The proportion of disposable earnings devoted to mortgage payments has fallen significantly over the past 18 months. Nationally, typical mortgage payments for a new borrower have declined from a peak of 48% of average disposable earnings in 2007 Q3 to 31% in 2009 Q1; First-time buyers accounted for 40% for all those purchasing a home with a mortgage in March; the highest percentage since April 2005. The number of first-time buyers, however, remained very low and at 12,500 in March 2009, was one-third lower than a year earlier. Commenting, Nitesh Patel, Housing Economist, said: “It is always important not to place too much weight on any one month’s figures. Historically, house prices have not moved in the same direction month after month even during a pronounced downturn. “There are some tentative indications of a possible stabilisation in activity, albeit at a low level. Bank of England industry-wide figures show that the number of mortgages approved to finance house purchase – a leading indicator of completed house sales – increased by 19% between the final quarter of 2008 and the first quarter of 2009, on a seasonally adjusted basis. Approvals in the three months to March were 45% lower than in the same period in 2008. “House sales remain substantially below their long-term average and market conditions are expected to remain difficult with housing activity continuing at low levels over the coming months.” Read more to top Nationwide: House prices rise for second time in three months The Nationwide house price index reported that: The average house price rose by 1.2% in May, from £151,861 in April to £154,016; The annual rate of decline improved sharply from -15.0% to -11.3%; The low supply levels may explain some of the improvement in price trends. Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said: “The price of a typical house rose by 1.2% in May, providing further evidence of some improvement in housing market conditions over the last few months. At £154,016, the average house price is still 11.3% lower than a year ago, although this marks a significant improvement from the annual decline of 15.0% recorded in April. The 3 month on 3 month rate of change – a smoother indicator of short-term price trends – rose from -3.0% in April to -0.5% in May and now stands at its highest level since January 2008. “Although the short-term trend in house prices has clearly improved from where it was at the beginning of the year, it is still too early to say that the market is turning definitively. During the downturn of the early 1990s, there were many months during which prices rose, only to fall back down again in subsequent periods. In the current downturn, the combination of rapidly rising unemployment and tight access to credit implies that the last of the price declines has probably not been seen yet. Nonetheless, the improvement in house price trends is consistent with signs of stabilisation in several other economic indicators and suggests that any further price declines may occur at a less rapid pace than in 2008.” Read more to top Land Registry: April annual house price fall remains static According to the latest figures from the Land Registry, annual house prices in England and Wales fell by 16.2% in April, taking the average house price to £152,898. This mirrored the annual house price fall in March. Monthly house prices fell by 0.3% in April compared to a fall in March of 0.4%. London had a positive monthly change of 1.4%, making it the region with the greatest monthly change. The average property value in the capital is £302,411. The South West region experienced the most significant annual price fall with a movement of -18%. The North East showed the most significant monthly price fall with a movement of -2.6%. Middlesbrough had the most significant monthly house price fall during April with a movement of - 4.4%. Only York experienced no monthly price movement. The most up-to-date figures available show that during February 2009 the number of completed house sales fell by 50% to 25,592 from 51,121 in February 2008. In London 2,933 house sales were completed in February 2009 compared with 7,152 in February 2008. This represents a fall of 59%. Read more to top Economic news Bank of England maintains Bank Rate at 0.5% and continues with £125bn asset purchase programme The Bank of England’s Monetary Policy Committee voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases totalling £125bn financed by the issuance of central bank reserves. The Committee expects that the announced programme will take another two months to complete. The scale of the programme will be kept under review. The minutes of the meeting will be published at 9.30am on Wednesday 17th June. Read more to top Bank of England: Lending to individuals April 2009 The Bank of England reported this week that the increase in total net lending to individuals in April (£1.3bn) was higher than the March increase (£0.7bn) but below the previous six month average. The twelve month growth rate continued to fall, by 0.3 percentage points to 1.8%, but the three month annualised growth rate increased by 0.1 percentage points to 1.0%. Within the total, the increase in net lending secured on dwellings (£1.0bn) was higher than the March increase (£0.6bn) but below the previous six month average. The twelve month growth rate fell further, by 0.4 percentage points to 1.5%. The three month annualised growth rate was unchanged at 1.0%. The number of loans approved for house purchase (43,201) was higher than in March and higher than the previous six month average. Approvals for remortgaging (31,800) and for other purposes (27,916) were lower than in March and below the previous six month averages. Read more to top CML comment on Bank of England lending data Commenting on the lending data from the Bank of England, CML Economist Paul Samter said: "House purchase approvals continued to edge up in April, to 43,000 in the month on a seasonally adjusted basis. This is up from 40,000 in March and is the highest level since April last year (when the figure was 55,000, so this April's number still represents a 22% fall year-on-year). "It looks almost inevitable that May approvals will be higher than a year ago for the first time since early 2007. However, activity remains at extremely low levels on any historic comparison – and weaker than at any point in the early 1990s. Limited lending capacity and the impact of further job losses are likely to act as a ceiling for how far the improvement can continue, although there could be further modest rises in the coming months." Read more to top BSA: Building society lending stabilises Gross mortgage lending by building societies was £1,551m in April 2009, compared to £1,571m in March, and £3,921m in April 2008 according to the Building Societies Association. Commenting on mortgage figures, Paul Broadhead, Head of Mortgage Policy at the BSA said: “Gross mortgage lending by building societies was £1,551m in April 2009, a similar level to March, but still 60% lower than gross lending in April a year earlier. Although also at low levels, building society mortgage approvals (which give some indication of future lending activity) were 14% higher in April than in March, after adjusting for seasonal factors. Therefore, the rate of decline in activity in the housing market may have started to slow, but overall the lending environment remains very challenging.” Read more to top Industry news LGA: New guidance on planning practice On 3rd June the Local Government Association published new guidance on good planning practice for councillors and officers dealing with planning matters. This 2009 update of the previous 2007 guide provides refreshed advice on achieving the balance between the needs and interests of individual constituents and the community, with the need to maintain an ethic of impartial decision-making on what can be highly controversial proposals. It also better reflects local authorities’ roles as place shapers and the enhanced role for councillors as champions of their local communities. It recognises councillors’ ability to participate in discussions prior to the receipt of a planning application on behalf of their communities, and to engage in spatial planning policy formulation. The new guidance provides advice following the Killian Pretty review’s recommendations. It also advises on how to avoid predetermination or bias in decision making. Whilst the advice is designed primarily for officers and councillors involved in plan-making and development management, it will also assist scrutiny and standards committees dealing with planning matters. Click here to download the “Probity in Planning” document to top Regulating the sale and rent back market The Government has laid before Parliament secondary legislation to bring sale and rent back agreements within the scope of Financial Services Authority (FSA) regulation. The Government also published a summary of responses to its consultation on the sale and rent back market, which closed on 1st May 2009. The FSA will publish shortly details of its regulatory regime, which will take effect on 1st July 2009 subject to Parliamentary approval. The Government’s consultation followed an Office of Fair Trading (OFT) market study published at the end of last year, which looked at the impacts of the growing sale and rent back market. The OFT report identified a number of risks to homeowners entering into these arrangements and made three recommendations to Government, including compulsory regulation, increasing consumer awareness and improving information about housing benefits. The legislation laid this week includes a two-stage approach to regulation, in order to ensure consumers are protected as quickly as possible in the current market environment. The FSA will put in place its full regulatory regime in the second quarter of 2010, following consultation and the publication of its final rules. The Chief Secretary to the Treasury, Yvette Cooper, said: “The Office of Fair Trading found last year that vulnerable homeowners were at risk from unscrupulous sale and rent back operators. It’s not right that people can be pushed out of their homes through dodgy deals.” Read more to top Output in the construction industry The Office of National Statistics reported this week that the total volume of construction output in the first quarter of 2009 was 9% lower compared with the fourth quarter of 2008. New private housing work was 10% lower and new public housing was 8% lower over the same period. All new work fell by 10% while repair and maintenance fell by 9%. The total volume of construction output in the 12 months to the first quarter of 2009 fell by 6% compared with the previous 12 month period. Read more 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
