Friday, 28th May 2010 Top stories this week CLG Secretary of State writes to planning authorities on RSS position.....read more The Queen’s Speech 2010.....read more Bank of England: Trends in Lending.....read more BBA: April figures for main high street banks.....read more CML publishes April gross mortgage lending data and calls for funding issues to be addressed.....read more Quick Links Wales news Government and political news Economic news Housing market news Industry news Events Wales news HBF meets Deputy Housing Minister On Wednesday 26th May, the Federation met with the Deputy Housing Minister Jocelyn Davies, along with WAG officials, to discuss housing delivery and issues surrounding the current market climate. We provided the Minister with an update of the current market situation and made her aware of the major problems the industry still faces at present, including the constrained availability of mortgage finance. We reinforced the requirement for national policy to prioritise housing delivery in general in Wales, rather than to focus unduly on the provision of affordable housing. We also made the Minister aware of the critical prerequisite for housing sites to remain viable and deliverable, in light of the plethora of planning obligations that are now being required on development sites, in order to ensure the industry makes a quick and comprehensive recovery from the recent recession. The discussions also touched on the spending cuts the WAG will inevitably face and in relation to housing, the Minister indicated that she could not expect her department to be immune from these cuts. The Minister stated that with SHG allocations having been brought forward from subsequent years to counter the recession and the knock-on effects of UK level cuts on the Assembly government’s finances, it is unclear what level of funding for SHG will be available in the future. As such, the WAG is looking into new ways of funding affordable housing, which it hopes to publish in the near future. (Inside Housing has subsequently reported that “The Welsh government has given an £178,000 grant to Community Housing Cymru to develop an investment trust for house building. The trust would invest in property which would be managed by housing associations. It would aim to promote capital market investment in a range of initiatives, including affordable housing, intermediate and market rent properties, and possibly ‘rent to buy’ schemes.”) We also discussed a commitment from the WAG at the recent Economic Summit to look into creating a WAG/HBF Forum in Wales, which would allow constant interaction between the WAG and the industry to ensure any policies and proposals introduced are mutually beneficial. The Minister was keen to take forward the idea and agreed that a coordinated approach to tackling the issues we face was necessary and important. We are expecting the Minister to respond on this matter in the near future. The discussions were positive and constructive and the Minister reiterated her commitment to meet with the HBF and members on a regular basis, in order to ensure she is kept fully up to speed with the industry’s issues and concerns. to top Official Response from Welsh Assembly Government on UK Government spending cuts Jane Hutt, Minister for Business and Budget, this week set out the Assembly Government’s position on the spending cuts announced by the UK Government. The Minister commented “We are all agreed that we need to reduce the deficit and reduce the national debt. Wales will play its part in this. But making unplanned cuts in spending this year would be bad for Wales – bad for businesses in Wales, bad for jobs in Wales and bad for public services in Wales. Since 1999, the Assembly Government budget has more than doubled. During that time, we have maintained a focus on achieving efficient and effective services and for the past 12 months have been preparing for tighter budgets in a structured and managed way. It is vital that we build on the progress to date to drive greater efficiencies and savings in the years to come so that we can respond innovatively to the public spending squeeze. If we are to protect services to the best of our ability and manage with less, then we need to undertake careful preparation and work together to shape our response....” Read more to top Labour warns public-sector cuts will hit Wales hard Budget cuts implemented by the new Government will put thousands of Welsh public- sector workers on the dole, the Labour Party has said. Ahead of this week’s announcement on immediate cuts, Shadow Welsh Secretary Peter Hain warned frontline public-sector staff face unemployment under the plans, describing the consequences for Wales’ economy as “damaging”. Read more to top Cameron says no Assembly referendum until next year David Cameron this week triggered a row with the Assembly Government by announcing that a referendum on more powers for the National Assembly will not take place this year. Last week First Minister Carwyn Jones sent a draft referendum question to Welsh Secretary Cheryl Gillan, expressing a strong preference that polling take place in October. But, in an address to MPs that followed the Queen’s Speech, the Prime Minister said: “What we’re going to do is allow the referendum to go ahead that was actually rather held up by the last Government, so yes, a date will be named for that referendum and I believe it should be held next year and I believe there should be a free and open debate in Wales for that to happen.” Read more to top Affordable Housing Provision in Wales, 2007-08 and 2008-09 The latest National Statistics on Affordable Housing Provision in Wales, 2007-08 and 2008-09 produced by the Welsh Assembly Government were released this week according to the arrangements approved by the UK Statistics Authority. The purpose of this Statistical Bulletin is to provide more detailed information about the provision of additional affordable housing units across Wales during 2007-08 and 2008-09. This will supplement the initial summary information originally published in a statistical first release in December 2009. Affordable housing delivered: Over the two years, 2007-08 and 2008-09, a total of 4,235 additional housing units were delivered across Wales, which represents almost two thirds (65 per cent) of the 6,500 target set for 2011; Registered Social Landlords (RSLs) have made the largest impact delivering over half of all additional affordable housing in 18 out of the 22 local authorities and in three, Pembrokeshire, Carmarthenshire and the Vale of Glamorgan RSLs provided 100%; A total of 2,118 additional affordable housing units were delivered by RSLs via capital grant funding (Social Housing Grant (SHG), Recycled Capital Grant (RCG) and Strategic Capital Investment Fund (SCIF)) during 2007-08 and 2008-09 which is 64% of all RSL provision over the period. Affordable housing provision through the planning system: Over the two years, 2007-08 and 2008-09, 27% of all additional affordable housing units delivered were through planning obligations (1,156 units in total); Additional affordable housing delivered outside the national park authority areas was more likely to be done through the planning system – 27% of units compared to 20% within the National Park authority areas; Around 3% (106 units) of all additional affordable housing delivered during 2007-08 and 2008-09 was through the planning system on rural exception sites. Read more to top Government and political news CLG Secretary of State writes to planning authorities on RSS position Eric Pickles, the Secretary of State for Communities and Local Government, wrote a letter on 27th May to all Local Planning Authority Chief Planning Officers announcing the Government’s intention to “rapidly abolish Regional Strategies and return decision making powers on housing and planning to local councils.” The letter goes on to say that decisions on housing applications “will rest with Local Planning Authorities without the framework of regional numbers and plans”. The Secretary of State says he “will make a formal announcement on this matter soon”. While to this extent the letter is unclear as to whether or not LPAs will be permitted to ignore the RSS numbers from here on, or only once the RSSs have been formally abolished, it goes on to say that “LPAs and the Planning Inspectorate are to have regard to this letter as a material planning consideration in any decisions they are currently taking”. We must assume therefore, that because the Government has stated its intention to abolish the housing targets, and has reiterated this in this letter, it is apparently allowing LPAs free-rein to determine what they think is an appropriate housing target. Moreover, because appeals are determined in the Secretary of State’s name, he is likely to tend to support any local authority position in such matters at appeal (subject to other material considerations and the achievement of other policy objectives). HBF is writing again today to the new CLG Ministerial team expressing concern over the ambiguity and potential adverse effects of this approach and seeking an urgent meeting to obtain clarification of how local authorities will be required to justify any housing provision figures other than those in the RSS. to top The Queen’s Speech 2010 The Queen delivered her Speech at the State Opening of Parliament this week. It set out the new Government’s initial legislative programme for the first session of the current parliament. The Government’s programme will be “based upon the principles of freedom, fairness and responsibility”. The Government’s first priority is to reduce the budgetary deficit and restore economic growth. HBF has provided a member briefing detailing the key points in the speech, please click here to view a copy* The most important measure for home builders is the Decentralisation and Localism Bill which would abolish the requirement for Regional Spatial Strategies and introduce a new locally-based planning system. *member only information, please remember to log in to top RTPI: Amending planning system without proper alternative risks economy The Royal Town Planning Institute has responded to the Government’s announcement of a Decentralisation and Localism Bill (click here to view) warning that summary abolition of major parts of the planning system without a viable alternative in place puts economic recovery at risk. In particular the Institute is concerned that the Government’s proposals to abolish regional planning are based mainly on an objection to imposed regional housing targets rather than to the principle of strategic planning. The Institute strongly advocates the need for strategic-level planning that co-ordinates development and infrastructure between different areas, provides a wide range of environmental policies, and ensures that the needs of the wider than local community are properly addressed. Ann Skippers, President of the Royal Town Planning Institute said: “Moves towards giving local communities more power are welcome; but we feel there is a real danger in hastily abolishing regional planning. It is important that the Government realises that strategic planning did not begin in 1997, but has been a vital part of our system for over half a century, with areas like the West Midlands benefiting since 1955.It is vital to have a level of strategic planning between local councils and national government to ensure proper co-ordination across council boundaries.” Read more to top HCA cuts £230m and freezes new spending The Homes and Communities Agency has cut £230m from existing programmes and frozen further spending on key schemes including Kickstart and the national affordable housing programme pending decisions on the further savings that have to be made from CLG’s budget. The move follows the announcement of £6.2bn of cuts by the government earlier this week. The HCA has been told to cut spending by £230m as part of the Communities and Local Government department’s £780m budget reduction for 2010/11. It is taking £100m from the national affordable housing programme, £50m from Kickstart round two, £30m from its Gypsy and Traveller programme, and £50m from housing market renewal. Read more The HBF has produced a member briefing outlining the CLG spending cuts, please click here to view* *member only content, please remember to log in to top HBF: Kickstart cuts threaten economic revival and jobs In reaction to the announcement that Kickstart funding is to be cut, the HBF said in a press release that this will directly threaten both jobs and a wider economic recovery and is a cut on investment not waste. It will also potentially reduce housing supply and worsen the nation's already acute housing shortage. Kickstart funding was put in place to get stalled house building sites working again and is generating many times more private sector investment than the initial injection of public money. Restarting sites also leads to the immediate creation of jobs and results in positive economic spin offs across local economies - both of which will suffer under the planned cuts. HBF also pointed out that Kickstart 2 required developers to take on apprentices to qualify for the public investment, so that cuts would have a long term impact on the ability to deliver new homes. HBF is now seeking urgent clear guidance from HCA on exactly which sites the planned cuts will affect so that its members can make decisions about labour, materials and contracts. HBF Executive Chairman Stewart Baseley said: "Cutting Kickstart money, that creates immediate benefits in terms of local jobs and for the wider economy is a cut on investment not waste. Public money invested through Kickstart pulled in many more times that in private sector investment - which will now be lost to the economy. The announcement is extremely disappointing when we are in the midst of an acute housing crisis and a shortage approaching a million homes, yet building less than in any peacetime year since 1923.” Read more to top Economic news Bank of England: Trends in Lending According to the latest figures released by the Bank Of England, the flow of net lending to UK businesses was negative in March, though in 2010 Q1 overall, the stock of lending to some of the main sectors of the economy was stable. Some major UK lenders reported that activity by foreign lenders in the UK market remained broadly unchanged in the three months to April, though was higher than a year earlier. Loan spreads for large businesses continued to narrow, according to the major UK lenders, which they attributed to competitive pressures. Contacts of the Bank’s network of Agents continued to report some easing in loan availability, though experiences varied depending on the size of business, sector and lenders’ perceptions of risk. Demand for new corporate borrowing remained weak. The flow of net mortgage lending by all UK-resident mortgage lenders slowed in March. Gross lending for house purchase in April was similar to that in March, according to data from the major UK lenders, though their mortgage approvals for house purchases edged down. While the number of advertised mortgage products has increased in recent months, the major UK lenders reported that secured credit availability and demand were broadly unchanged in April. The overall effective rate on new mortgage lending was little changed in March, but some major UK lenders reported some downward pressure on mortgage pricing due to increasing competition to lend. Total net consumer credit flows slowed in March, although the annual growth rate of the stock of lending edged higher. Effective interest rates on consumer credit fell slightly in March, though spreads over Bank Rate and Libor remained significantly wider than in late 2008. Lenders reported no significant changes in credit availability or demand in April, with applications for consumer credit broadly in line with the average of the previous three months. Read more to top BBA: April figures for main high street banks According to the latest data from the British Bankers’ Association, the annual growth in the banks’ net mortgage lending of 4.3% (slightly lower than last month’s 4.5%) still substantially exceeds annual growth of just 1% in March for the mortgage market overall. Subdued spending has led to consumer credit contracting by 2.6% over the year. Although investment in ISAs has been lower than previous years, personal deposits have risen 6.0% over the past year. Lending to non-financial companies has contracted by 5.4% over the past year. Gross mortgage lending of £8.2bn in April was lower than both March and the average of the previous six months (£9.1bn). Repayments were stronger than usual as banks actively encouraged borrowers to use surplus cash to reduce their borrowing where possible. As a consequence, net mortgage lending grew by only £1.8bn in April compared with £2.3bn in March, and was below the previous six month average. The numbers of approvals for house purchase, though higher than the same point a year ago, are low when compared to historical trends. The average value of house purchase approvals (£146,700) was 11.7% higher than a year ago. Numbers of remortgaging and equity withdrawal approvals continue to be lower than a year earlier. Read more to top CBI: High street suffers from surprise fall in sales volumes The volume of sales on the high street during the last month were lower than a year ago, surprising retailers, according to the latest CBI Quarterly Distributive Trades Survey. Orders placed by retailers with suppliers also fell, as did employment. Although 30% of retailers said that the volume of sales rose during the first two weeks in May, 48% said they fell, giving a balance of -18%. This was a much weaker result than expected by respondents (+17%), and was the lowest balance since March 2009 (-44%). The major sub-sectors which saw the sharpest year-on-year fall in sales were: chemists, durable household goods and hardware, china and DIY; while clothing sales were also down after three months of continuous growth. The balance for the underlying trend, the three-month moving average of sales volumes, was +3%, indicating little movement in sales and reflecting the positive figures in the previous two months. The survey was conducted between 27th April and 12th May, and also covers wholesaling, where sales volumes continued to grow. 41% of wholesalers said that sales rose, while 22% said they fell, giving a rounded balance of +20%, which was not quite as strong as expected (+42%). Wholesalers predict volumes next month will be broadly unchanged on last year (a balance of +3%). However, employment in wholesaling fell sharply, with a balance of -53% reporting a year-on-year decline in May. Ian McCafferty, CBI Chief Economic Adviser, said: “These retail sales figures for the early part of May are clearly disappointing, with many sectors failing to achieve higher sales than a year ago. ”Unseasonal poor weather at the start of the month is likely to have dented clothing sales, while some signs of slowing momentum in the housing market may help to account for the renewed weakness in sales of big-ticket items and other household goods. “Retail conditions look to remain fragile however, as another year-on-year fall in sales is expected in June.” Read more to top ONS: UK output, income and Expenditure 1st quarter 2010 The Office for National Statistics released a statistical bulletin this week advising that the UK gross domestic product (GDP) in volume terms rose by 0.3% compared with the previous quarter, revised from an increase of 0.2% published in April. The volume of output in the production industries rose by 1.2%, within which, manufacturing rose by 1.2%. Output of the service industries increased by 0.2%. Construction output is estimated to have fallen by 0.5%. In real terms, household expenditure was unchanged compared with the previous quarter, while gross fixed capital formation rose by 1.5% GDP at current market prices rose by 2.1%. Read more to top Housing market news CML publishes April gross mortgage lending data and calls for funding issues to be addressed Gross mortgage lending declined to an estimated £10.2bn in April, down 12% from £11.6bn in March and 1% from £10.3bn in April 2009, according to new data from the Council of Mortgage Lenders. This is the lowest April total since 2000 (£9.3bn). A slight seasonal decline was expected as Easter fell in April this year. Gross lending remains broadly in line with CML’s forecast for lending of £150bn for 2010 as a whole. The CML notes that there have been signs of increased mortgage availability in recent months with higher loan-to-value mortgages becoming available and rates falling slightly. But it remains a difficult market, particularly for first-time buyers without large deposits, and lenders continue to face funding challenges. The CML says that the imminent fiscal squeeze will drag on the speed of the recovery, which in turn will slow the pick up in the housing market, although the Bank of England’s welcome of the plans to address the public finances is likely to mean that interest rates can remain low for longer, which will help to support the market. CML Director General Michael Coogan commented: “We welcome signs in the coalition agreement that some housing priorities are on the government’s radar. But we still do not know how the incoming government plans to address the funding gap looming over the next few years in the mortgage market. It is important that the new government grasps this nettle. Unless funding issues are addressed, any recovery in lending may well be curtailed as the repayment date on the support schemes gets closer.” Read more to top Homes for Scotland: Housing crisis laid bare by new stats Responding to the latest housing statistics published by the Scottish Government which show a 35% reduction in the number of private sector homes completed in 2009 compared to 2008 and a 20% drop overall, Jonathan Fair, Chief Executive of Homes for Scotland, said: "Today's figures are further proof, if it was needed, of the extent of the housing crisis Scotland currently faces. We believe total housing output will struggle to exceed 12,000 units this year - less than half pre-credit crunch levels and less than half of what is required to simply stand still in response to the 18,000 new households that are formed and the 11,000 homes that are demolished in Scotland each year. "With a report from CML today also showing a drop of 33% in house purchase lending in Scotland in the first quarter of the year, the new UK Government must address the mortgage issue once and for all and maintain investment in housing otherwise the social and economic consequences will be severe." Read more to top Industry news ConstructionSkills welcomes Government commitment to apprenticeships ConstructionSkills has welcomed the re-allocation of £150m in this week’s Government spending announcement to fund 50,000 more apprenticeship places for SMEs. Mark Farrar, Chief Executive of ConstructionSkills said: "We are pleased that the Government has prioritised the funding of apprenticeship places to improve Britain's growth and ensure people are given the best opportunity to access skills and training. Apprenticeships are the lifeblood of this industry and we must ensure we are creating enough opportunities for young people - and that businesses are willing and able to invest in them." "ConstructionSkills has been at the heart of skills and training for over 40 years and we are uniquely positioned to help government deliver a simple, cost-effective and demand-led skills system, for both employers and individuals, that will help pull us out of recession and into a new era of growth." Read more to top The Times comments on VAT - “The real threat to new homes” HBF has been vocal in its opposition to the Lib Dems pre-election proposal to put VAT on new build homes. This week HBF provided the Times with figures on the cost of such a move and on Tuesday, David Wighton wrote in his column: “For Britain’s house builders, life under the new Government hasn’t been too scary — so far. There will be cuts in funding to revive mothballed housing developments and for low-cost home-ownership schemes. But this is hardly unexpected and, as long as the cuts don’t apply to developments that have already started, the industry could cope. The Queen’s Speech also included the Tories’ controversial plan to give local councils more control over planning decisions. Builders have been worried that this will encourage anti-development Nimbyism. But senior industry figures are increasingly confident their concerns are being heeded and that the Government will take time to minimise the impact of the new system. What the builders are really worried about is the possibility that George Osborne might slap VAT on new properties. A rate of 5% would hurt. Whacking it up to, say, 20% would put a wrecking ball through the sector. Many other European countries charge VAT on new houses and, in a spirit of harmonisation, the Lib Dems wanted to follow suit. Although the policy didn’t make the coalition agreement, it has not been publicly ruled out. The Tories are well aware of the arguments against such a move because, during the election campaign, they organised a letter from industry leaders attacking the Lib Dem policy, which was never published. Nevertheless, there is a real temptation for the Government because it would raise quite a bit of money. Assuming a rate of only 5%, it would have brought in about £1.2bn last year. That, however, is assuming that it did not cut the number of houses built and sold, which is just what the industry warns would happen. A big price increase on new homes would make second-hand properties relatively more attractive and would be bound to hit sales. The last thing the fragile economy needs is another fall in housing starts. This is one VAT increase whose time has not come.” to top NHBC Health and Safety Awards winners announced The inaugural NHBC Health and Safety Awards Ceremony took place on Friday 21st May, hosted by Ben Fogle. The overall winners were: Multi-storey category: Daniel Farendon of Barratt West London for GWQ Brentford Small builder: Mike Loughran of Mactaggart and Mickel for Hillpark, Edinburgh Medium builder: Gary Hines of Ashleigh (Scotland) for Marchfileds, Dumfries Large builder: Darren Smith of Berkeley Homes (Oxford and Chiltern) for Slade Park, Oxford. Gold, silver and bronze company winners were awarded with Bovis Homes and Keepmoat winning group gold awards. Read more to top Events HBF Golf Day – Tuesday 13th July 2010 – Woburn Golf Course There are now just three team places remaining for the HBF Golf day in July. The event will take place on the stunning Duke’s course at Woburn, for many years home to the British Masters and will see teams from across the industry battling to be crowned the unofficial house building golf champions. Please click here for more information to top North West Social Dinner – Friday 10th September 2010 – Manchester: Last chance to take advantage of ‘early bird’ discount! The HBF North West Social Dinner will this year take place on Friday 10th September at the Midland Hotel in Manchester. Everyone is welcome at an event that attracts members from across the North and Midlands. Always a lively and fun event, regular attendees are booking keenly for what will be a fun filled industry evening. EARLY BOOKING discount available until Friday 4th June 2010. Please click here to find out more. to top Housing Market Intelligence 2010 – 12th October, Savoy Place, London This year’s Housing Market Intelligence conference and annual report launch will be held on Tuesday 12th October at Savoy Place in London. Now in its eighth year, Housing Market Intelligence has become the leading strategic conference for the house building industry. This year the event is expected to sum up the new political climate nearly six months after the election, as well as providing analysis and insight into the market, the economy, the sustainability agenda, mortgages and all the key issues for house builders and associated companies. Full details will be published over the summer but note the date in your diary today! EARLY on-line booking is now open – please click here for details or contact events@house-builder.co.uk to top HBF Planning Conference This year’s HBF Planning Conference will take place on Thursday 16th September at the Hilton Hotel in Bristol. More details to follow. to top Housebuilder Awards 2010 - Thursday 28th October, London This years Housebuilder Awards has attracted a record number of entries. Shortlisted schemes will be announced in June. Now in its sixth year - the prestigious awards bring together the best of innovation and excellence in the house building industry. The Housebuilder Awards are the highlight of the house building calendar, celebrating the very best of the industry and recognising the achievements of those leading the way in innovation. This year the winners will be announced at a glamorous black tie event on the night of Thursday 28th October at the Millennium London Mayfair Hotel. The short list and booking form will released in June, but for further information and updates, please visit http://www.house-builder.co.uk/awards/ HBF Ball – Friday 10th December – London. The HBF Ball will this year take place on Friday 10th December. Traditionally the social highlight of the industry’s year it will take place at the Marriott Grosvenor Square, London. For more details please click here to top Last chance to enter the 2010 Building for Life Awards The closing date for this year’s Building for Life awards is today, 28th May 2010, however, all you need to do by then is register interest by filling in page two of the application form (please click here) and emailing it to bflawards@cabe.org.uk. Supporting materials must then be sent through by Friday 11th June to BfL Awards, CABE, 1 Kemble Street, London WC2B 4AN. The Awards recognise good design and sustainable construction and are organised by CABE and the Home Builders Federation. Each year the Building for Life awards celebrate the best new homes and neighbourhoods in England. Winning an award is the first step to gaining national recognition for your new housing scheme. Any scheme – or phase of a scheme – can be entered if: It was completed after 1st April 2009 or; It is least 50% complete by 28th May 2010. Building for Life – led by CABE and the Home Builders Federation - is the national standard for well-designed homes and neighbourhoods. It does not demand bespoke or contemporary designs. It is about high-quality homes in well laid-out neighbourhoods and streets with a strong sense of identity – creating attractive, convenient and sustainable places to live in. Anyone can enter an eligible housing scheme for the Building for Life awards, including architects, developers, housing associations and planners. Call Tessa Kordeczka on 020 7070 6769 if you have any questions about entering the awards. to top Robust Details Roadshows 2010 – agenda announced These Robust Details seminars will provide delegates with a full update on robust details’ developments. As well as the ‘latest news’ affecting Part E and sound insulation, the seminars will anticipate the effects of the new Part L on the design of separating walls and floors. A full panel of experts will be on hand for all your sound insulation concerns. The 2010 RDL Roadshows will provide a full update on what we have found 'in the field' and will pass on some of the lessons learned from tests and site inspections. Dates and venues: 30th June - Galpharm Stadium, Huddersfield 1st July - RICOH Arena, Coventry 15th July - Sandown Racecourse, Surrey Importantly, you'll have an opportunity to look at what's coming next. Amongst other things, the effect the new Part L and changes to The Code for Sustainable Homes will have on the construction of separating elements. Please click here for more information, to book a place and to view the agenda, or call events on 020 7960 1646 with any queries. 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 View Previous Weekly News Summary
