HBF Weekly News Summary Friday 9 April 2009

Thursday, 9th April 2009Top stories this weekBurden of Regulation Briefing for No.10...read more HBF: Targeted action needed in Budget to nurture upturn.....read moreShapps launches Conservatives' new housing policies.....read moreCBI: Access to finance survey March 2009.....read moreBank of England: Credit conditions survey Q1 2009.....read moreQuick LinksHBF news Government and political news Economic news Industry news Housing market news Events HBF newsBurden of Regulation Briefing for No.10

HBF members made a presentation on the cumulative impact of regulation to advisors at No.10 Downing Street this week. Representatives from Barratt, Crest, Persimmon and Taylor Wimpey, along with senior HBF staff, took officials through a number of residential developments, outlining the impact of falling house prices and build costs, Code Level 4 costs and the proposed Community Infrastructure Levy (CIL) on development viability and land values.

to top HBF: Targeted action needed in Budget to nurture upturn

HBF has outlined in a submission to Government the action that it believes must be taken in this month's Budget to boost house building. It believes measures are needed to kick-start mothballed sites - and so immediately creating jobs - maintain affordable housing supply and assist buyers. In a press release accompanying the submission, we said:

"With house building likely to fall to record low levels this year, HBF is demanding this urgent action to protect industry capacity - vital for future housing provision. Increasing output would boost the economy, create jobs and result in better local infrastructure across the country while mitigating the cumulative under-supply of housing that is currently growing worse by the day.

"Measures called for include:

Swift implementation of a Government guarantee of mortgage backed securities to address the collapse of mortgage availability for borrowers - the key barrier to a recovery in the housing market;

Additional public money to be used to 'gap fund' ready to go sites currently not able to start work because of the economic crisis;

Provision of more money for shared equity schemes (such as HomeBuy Direct) to assist beleaguered first time buyers, who have all but disappeared from the market;

Extension of the temporary stamp duty holiday and lifting of the threshold to £250,000;

Allowing housing investment in SIPPS;

Create a framework to enable a more robust private rental market to flourish."

to top Government and political newsShapps launches Conservatives' new housing policies

Shadow Housing Minister Grant Shapps has set out a series of proposed new housing policies in a further Conservative Party green paper that follows the "Control Shift" paper on localism published earlier this year.

The housing paper, entitled "Strong Foundations", confirms and adds to the "Control Shift" proposals for introducing a bottom-up approach to housing delivery - with the abolition of regional plans and their housing targets.

The green paper also sets out a number of proposals to provide England's four million social tenants with greater social mobility and to restore rundown housing estates by helping to encourage social responsibility.

The proposals include:

Rewards for good behaviour - tenants with a record of five years' good tenant behaviour will be offered a 10% equity share in their social rented property, giving them a direct financial stake in the state of their neighbourhood;

A ‘Right to Move' - a comprehensive national mobility scheme that will allow good tenants to move to other social sector properties;

Supporting the low-cost housing sector - measures will include strengthening shared ownership schemes so that those on intermediate incomes can part-own their home;

Local Housing Trusts - villages and towns will be able to create entirely new community-led bodies with planning powers to develop local homes for local people, provided there is strong community backing;

Breaking the monopoly on empty government property - local people will have new powers to demand the selling of empty or under-used government property for housing;

The scrapping of regional planning, enabling councils to revise their plans to protect Green Belt land and prevent the unwanted imposition of so-called eco-towns.

The Conservatives also stated that they will be publishing a further green paper on planning and regeneration later this year. This will amongst other things look at reviewing and slimming down the current national Planning Policy Statements to help strengthen local decision-making and will therefore provide another important part of the picture on Conservative thinking.

Download a copy of "Strong Foundations"

to topHBF: Tory commitment to increasing housing welcome - but concerns raised over whether approach will work

In a press release, HBF guardedly welcomed the Conservatives' commitment to increasing housing supply - but questioned whether the approach being adopted would actually lead to increased housing delivery. The release said:

"The challenge of a "bottom-up" approach is finding ways of incentivising local communities sufficiently to ensure that nationally, the required numbers of homes are built.

"Household projection targets show a desperate need for more new homes to be built. If the right climate cannot be created to deliver them, there will be clear and difficult social implications for the future - with the obvious risk of new pressure on house prices and continued affordability problems for people seeking to get a foot on the property ladder.

"But it is also vital that as well as incentives, a bottom up approach includes sufficient safeguards on the planned delivery of new homes to ensure that the business climate provides sufficient certainty for home builders to be able to invest on the scale necessary. Stewart Baseley, HBF Executive Chairman said:

"'Whilst welcoming the commitment to increase housing supply, the current proposals leave some critical issues unaddressed. We will continue to work closely with the Conservatives, but it is essential that any localist approach results in a climate in which sufficient housing can be delivered. If it doesn't, we are storing up both social and affordability problems for the future.'

"Critical issues such as what is the process by which local housing requirements would be established; the role of home builders in determining this; and arrangements for allocating a developable land supply to build the homes needed all must be addressed if we are to meet housing need."

NAEA welcomes Conservative commitment to scrap HIPs

Following the publication by the Conservative Party of its Housing Policy Green Paper, Peter Bolton King, Chief Executive of the National Association of Estate Agents, said:

"The National Association of Estate Agents welcomes confirmation by the Conservative Party that they will abolish Home Information Packs if they form a government.

"The NAEA has long called for HIPs to be abolished and I am personally pleased that Mr Shapps has taken on board our point of view - a point of view shared by the vast majority of property professionals and, we believe, the vast majority of consumers."

to topShelter response to Conservative housing green paper

In response to the Conservative housing green paper, Adam Sampson, Chief Executive of Shelter said:

"The Conservative Party has rightly acknowledged that our systemic failure to build enough homes has resulted in the housing crisis we now face, and we welcome their strong commitment to build more affordable homes to address this. We are particularly keen to see further detail on planned Conservative investment in housing to see exactly how this increase in supply will be delivered.

"Shelter recognises that there is a need to make it easier for social housing tenants to move, for example to pursue job opportunities, and we welcome the intention of supporting mobility for social tenants. However, with 1.8 million households currently on council housing waiting lists, the top priority from all political parties must be to deliver the social rented homes this country so desperately needs.

"More social homes will not only provide better choice for existing tenants but also give people trapped on waiting lists the chance of a decent, affordable home.

"Given the severity of the housing crisis, we urge Conservative councils around the country to champion house building at a local level to ensure we start building now."

to top Economic newsCBI: Access to finance survey March 2009

The CBI's access to finance survey reported this week that the rate of deterioration was slowing significantly. Other key findings include:

The rate of deterioration in the availability of finance over the past three months for both existing and new credit lines has slowed significantly since CBI's last survey. However, looking ahead to the next three months, firms continued to expect difficult conditions to persist;

Direct costs for both existing and new finance have risen by more than reported in February. Financial conditions are continuing to impact on business activities;

Firms' expectations regarding the availability of finance for existing and new lines of credit remain similar to February's survey;

An increase in direct costs for both existing finance and new credit was reported. As in the previous surveys, the most frequently cited responses to the survey's question on indirect finance costs concerned arrangement fees and the speed and administrative burden of accessing new credit;

There was further deterioration in the availability of trade credit insurance over the past three months. Current financing conditions are continuing to impact on staff numbers, pay, and mergers and acquisitions.

to top Bank of England: Credit conditions survey Q1 2009

In the Bank's credit conditions survey, lenders are asked about the past three months and the coming three months. The survey covers secured and unsecured lending to households and small businesses; and lending to non-financial corporations, and to non-bank financial firms. This report presents the results of the 2009 Q1 survey, conducted between 23rd February and 13th March.Key findings include:

Supply

Lenders reported that they had reduced the availability of secured credit to households in the three months to mid-March 2009. Reduced risk appetite and expectations for house prices were reported to have been the main factors contributing to this tightening. A small net balance of lenders was expecting an increase in overall credit availability over the next three months;

Unsecured credit availability to households and small businesses was reported to have been reduced by less than expected. Over the next three months lenders expected unsecured credit availability to remain broadly unchanged;

Corporate credit availability had increased slightly over the past three months, contrary to the small fall expected in the 2008 Q4 survey. A further increase in corporate credit availability was anticipated over the next three months.

Demand

Demand for secured lending for house purchase and for remortgaging was reported to have declined over the past three months. Lenders expected demand for secured lending to fall further;

Demand for credit by private non-financial corporations had fallen over the past three months. Reduced demand for lending for capital investment and from the real estate sector had contributed to these falls. A further decline in demand by medium-sized companies was anticipated, but demand by large firms was expected to increase.

to top Industry newsCPA: Construction industry facing worst fall on record

The latest Industry Forecasts from the Construction Products Association have been released this week, stating that, despite some indicators predicting construction is beginning to turn the corner, the industry entered 2009 with its sharpest falls in output since 1980 and in new orders since 1983. Coupled to this the Forecasts for the coming year indicate the industry will suffer a 12% fall in construction output - the worst on record, followed by a further fall of 3.4% in 2010. Significant positive growth is only expected in 2012 and by the end of the forecast period, in 2013, construction output is still expected to be below levels experienced in 2002. Commenting on the latest Forecasts, Noble Francis, Economics Director at the Construction Products Association said:

"The current economic recession is now having a major impact on our industry and this is the most serious downturn most of us in the industry have ever experienced. We have already lost 60,000 jobs with more expected to follow and an estimated 12,000 construction workers on short time working. The crisis in financial markets during last autumn led to a collapse in credit that is vital to private sector construction. The Government's attempt to revive the financial sector, combined with various fiscal stimuli, has left public borrowing at unprecedented levels. Any upturn in construction will be critically dependent upon an increase in credit availability in the private sector and government spending in accordance with its announced plans on the public side.

"As we all know private housing has been the worst affected sector so far and the housing market is not expected to improve soon. The Association anticipates that new housing starts will fall to 70,000 this year, the lowest number since 1924. Public housing starts are anticipated to fall 20% during 2009 as they are intrinsically linked to the private market. The commercial sector has slowed considerably since autumn2008 and output over the next two years is expected to fall 53% in the new build office market and 40% in new retail construction."

to topCBI urges timetable of action on climate policy

The CBI has set out its vision for a low-carbon economy this week in a series of climate change roadmaps which also reflect HBF input during the consultation process. The roadmaps, called "Going the Distance", highlight steps to be taken between now and 2020 in power, transport, buildings and industry, and set out a timetable of action to ensure carbon emissions targets are met and to enable the UK to seize the opportunities presented by the low-carbon economy. The roadmaps set out the Government's existing commitments and what it must do to meet its climate change targets. They also show what businesses will be expected to deliver in response.

CLG: Home Information Packs guidance for enforcement officers

This guidance published by CLG on the Home Information Pack duties in the Housing Act 2004 and secondary legislation made under the Act is aimed primarily at those who have responsibility for enforcing the duties under the Act, i.e. local authority trading standards officers and the Office of Fair Trading. The guidance also provides a commentary on the requirement to include energy efficiency information in estate agents' and other written particulars that are contained in the Energy Performance of Buildings (Certificates and Inspections) (England and Wales) Regulations 2007.

to top Housing market newsKnight Frank: Positive signs return to prime country house market as price fall halves in first quarter of 2009

Key highlights from Knight Frank's prime country house index, released this week, include:

Prices for prime country houses dropped on average by 4.7% in Q1 2009, compared with a 9% fall in Q4 2008;Average prices have now fallen by 20% in the past 12 months;The Home Counties saw the smallest quarterly drop, the north and Scotland the greatest;Sales volumes are now increasing in some areas.

Andrew Shirley, Knight Frank's Head of Rural Property Research commented:

"The price of prime rural property continued to reflect the weakness of the general housing market in the first quarter of this year, but the rate of decline has slowed substantially. Average property values fell by 4.7%, compared with 9% in the final three months of last year, according to our prime country house index.

"I think buyers, particularly those with money on deposit at very low interest rates, are certainly starting to perceive that property now offers value for money again, especially in those areas where prices have fallen the most. In the Home Counties, for example, values have fallen by 22.5% from their peak, but have dropped by only 3.7% so far this year.

"It would be premature to rule out any further falls completely, but it does look like we could be very close to the bottom of the market around London and this has been reflected by an increase in market activity in our Home Counties' offices.

"On an annual basis, prices have fallen the least in Scotland and the north of England and this explains why these areas are now playing catch up, with prices falling by 6.3% in the first three months of the year."

to top EventsZero Carbon, Part F and Part L - The cost and impact on housebuilders

Wednesday 20th May 2009 - Think Tank, Birmingham

With the consultations for Building Regulations Parts F & L and the zero carbon definition taking place this year, this conference will help housebuilders understand the impending changes and their cost and impact on the industry. It will also provide delegates with valuable and practical insight into the future of Building Regulations.

This full day event will specifically examine zero carbon, Part F and Part L over three morning sessions. The afternoon session will concentrate on the introduction of the new SAP methodology later this year with real life examples and a software demo. The conference will also analyse the real cost of sustainable housebuilding, looking at delivering to code level 3 and 4 and higher level schemes

To book online please click here or for further information please contact the events team on 020 7960 1646 events@hbmedia.co.uk

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

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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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