HBF Wales Weekly News Summary Friday 29 January 2010

Friday, 29 January 2010

Top stories this week

Gross domestic product preliminary estimate 4th Quarter 2009.....read more

BBA: December figures for the main high street banks.....read more

NHBC: positive house building stats released.....read more

CML responds to FSA mortgage review and calls for strategic focus on mortgage funding.....read more

Construction industry to emerge from recession in 2011.....read more

HBF to host housing ‘Question Time’ featuring Healey and Shapps ....read more

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Alan Cherry

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Wales news

Government pledges to help Welsh economy emerge stronger from recession

The First Minister and Deputy First Minister have welcomed the news that the UK has moved out of recession and said that the Welsh Assembly Government will continue to provide support to individuals and businesses still facing difficulties.

First Minister Carwyn Jones said:

“It is encouraging that latest figures show that the UK has moved out of recession and this is of course to be welcomed. However, we are clearly aware that many individuals and businesses will still be facing challenges and we will continue to do what we can to help.

“We have said all along that we would do what is necessary to keep the recession as short as possible.

“We did not wait for the UK to officially enter recession on the 23rd January last year before taking action. Clearly we were aware of the difficulties companies were facing and we convened the first of our all-Wales economic summits in October 2008.

“These summits, and other initiatives such as ProAct and ReAct, have been praised as innovative and proof of our ability to act quickly and in collaboration with the private sector, trades unions and other public sector organisations.

“We will now continue to build on this collaborative approach and move ahead with our plans to ensure the Welsh economy emerges from recession stronger and more sustainable.”

House prices will rise again, say buyers

More than half of aspiring homebuyers in the Welsh capital believe house prices will rise this year.

Research has revealed that confidence in Wales’ property sector has started to rise.

According to website Rightmove, 59% of Cardiff house hunters expect values to increase over the coming 12 months. Confidence in the city house market is the highest in the region, the poll discovered.

There was also a huge swing in sentiment across the country, as the internet site said 52% of Welsh people think property prices will be higher in 2010 compared to values recorded the previous year. Just 10% of those questioned held similar views when researchers conducted the same study 12 months earlier – a swing of more than 40%.

£13.3m flood relief schemes for north Wales

Two more north Wales towns are to benefit from flood defence schemes thanks to funding from the Welsh Assembly Government.

A £6.4m Flood defence scheme to protect Tywyn, Gwynedd has been given the green light as a result of new funding. The Welsh Assembly is to provide £3.8m funding for the project which will start later this month. The project will prevent an estimated 78 properties from a risk of annual flooding.

A £1.9m Flood defence scheme to protect Llanfairpwll, Anglesey has also been given the go ahead after Environment Minister Jane Davidson announced that the Welsh Assembly Government is to provide £1.6m for the project.

The scheme will reduce the risk of flooding to an estimated 90 properties in the Ffordd Penmynydd area of Llanfairpwll, which has been plagued by flooding in recent years and will take around eight months to complete.

Tories appoint shadow ministers to ‘Wales-proof’ party’s agenda

The Conservatives have begun appointing shadow ministers with responsibility for “Wales-proofing” the party’s agenda for government.

Each department would have a minister with a specific duty to ensure Wales is not inadvertently left out of key legislation.

Whitehall confusion over which policy areas are devolved has been a regular feature of Welsh politics, ranging from clauses wrongly left out of Bills to department failing to consult WAG on job losses.

Alan Cherry

It is with great sadness that we have to announce the death of Alan Cherry. Alan had been diagnosed with cancer last summer.

Our deepest sympathy at this time goes to his wife, Fay, and their family.

Alan founded Countryside Properties in 1958. In 1972 the company was floated on the stock exchange where it remained until 2005 when he completed a management buyout with his two sons, Graham and Richard – both of whom continue to serve on the senior management team. Alan remained as Chairman until his death.

He devoted a great deal of time to industry issues and sat on a number of industry working groups. He served as HBF President in the late 1980’s and also as Chairman of the New Homes Marketing Board. He was a member of the Government’s Urban Task Force and also served on the Duke of Edinburgh’s Inquiry into British Housing.

In recognition of his work for the industry he was awarded an MBE in 1984, and then a CBE in 2003.

A memorial service is to be arranged.

Economic news

Gross domestic product preliminary estimate 4th Quarter 2009

The Office for National Statistics reported this week that the chained volume measure of gross domestic product (GDP) increased by 0.1% in the fourth quarter of 2009. The increase in output was due mainly to increases in distribution, hotels and restaurants and government and other services.

Output of the service industries increased 0.1%. Output in the production industries increased 0.1%. GDP decreased 3.2% between 2008 Q4 and 2009 Q4.

BBA: December figures for the main high street banks

According to the latest data from the British Bankers’ Association, mortgage lending strengthened slightly in December, with gross lending inflated by some borrowers pushing through purchases ahead of the end of stamp duty relief. Consumer credit was weak, in line with weak retail sales volumes, but savings recovered from a weak November figure to an above-trend rise.

BBA Statistics Director, David Dooks, said of the latest data:

"The high street banks continued to lend substantial amounts in the weaker mortgage market of 2009 approving more than 440,000 loans for house purchase. Their share of gross lending went up from a historical level of about two-thirds to three-quarters, due to specialist lenders largely withdrawing from the market and building society finance contracting.

"Households' unsecured borrowing contracted throughout the year, particularly on personal loans. After paying down debt, people sought to build up their savings."

FSA sets out new steps to ensure that borrowers in arrears are treated fairly and to reduce levels of mortgage fraud

The Financial Services Authority (FSA) has set out a package of measures that will help to ensure that mortgage holders in arrears are treated fairly and which reinforces the FSA’s tough stance in its battle against mortgage fraud.

The key arrears proposals:

Make plain that firms must not add early repayment charges on arrears charges and interest levied on those charges;

Clarify that firms must not apply a monthly arrears charge where the firm and the customer have agreed an arrangement to repay the arrears;

Compel firms to consider all options for borrowers. Repossessions should always be the last resort;

Confirm that payments by customers in financial difficulties must first be allocated to clearing the missed monthly payments, rather than to arrears charges, which can be repaid later; and

Oblige firms to record all arrears handling telephone calls and to keep all records for three years.

CML reaction to FSA on arrears and approved persons

The Council of Mortgage Lenders said it broadly agrees with the proposals on arrears handling put forward by the Financial Services Authority, but will need to review the practical implications to ensure there are no unintended consequences. However, at first sight the CML was concerned that the impact of the FSA's proposals on how to extend the approved persons regime may be disproportionate for lenders - the costs would in its view far exceed potential benefits.

CML Director General Michael Coogan observed:

"We will need time to consider the FSA's proposals properly. But at first glance, the extension of the approved persons regime to both lenders and intermediaries appears heavy-handed, at least as far as lenders are concerned, and may be a sledgehammer to crack a nut. The number of sales advisers identified by the FSA also appears lower than we would expect, suggesting that the FSA may be underestimating the cost of implementing this proposal both for the regulator and firms.

"The arrears handling proposals are in line with industry expectations, and we broadly agree with them. Even so, it is important to remember that increasing the compliance burden on the industry also increases costs - the FSA's cost/benefit analysis appears to suggest only a modest increase in costs, but experience shows us that actual regulatory compliance costs always tend to be much higher in practice."

CBI: Retailers disappointed by weak New Year sales

The UK high street reported a slight fall in year-on-year sales in early January, disappointing retailers' predictions and ending a three-month run of sales growth, the CBI said this week.

Responding to the CBI's latest Distributive Trades Survey, 28% of retailers said that the volume of sales in the year to early January had risen, while 36% said it had dropped. The resulting balance of -8% was weaker than predictions made last month of sales being broadly flat on a year ago (-2%).

The weak sales during the traditional 'New Year sales' period are likely to have been influenced by the UK's extreme cold snap, which coincided with the survey span of 4th to 15th January. The rise in VAT may also have deterred consumers from big-ticket items.

Looking ahead to February, retailers expect that sales will be largely unchanged on their levels of a year ago (-1%).

The three month moving average of sales volumes (a balance of +6%), fell back from November and December's levels, though remained higher than earlier in 2009.

Sales were described as poor for the time of year by a balance of 22% of retailers, which was weaker than December (-16%), while a net 8% expect sales to remain below seasonal norms in February.

Housing market news

NHBC: positive house building stats released

The most recent set of house building industry figures from the National House Building Council (NHBC) were released this week.

Applications to build new homes across the UK during rolling quarter October to December 2009 increased 64% on the same period in 2008 (from 15,879 to 26,078).

For the third consecutive month registrations have shown strong levels of recovery when compared with last year, with 7,149 new homes registered with NHBC for December 2009, up 68% on the same time last year (4,259). In November 2009, the figure was up 71% year-on-year, which was the highest figure for 18 months.

Imtiaz Farookhi, chief executive of the NHBC, commented:

"Our house building colleagues across the industry have shown cautious optimism as they reveal their predictions for 2010, and our stats support the prospect of significant recovery.

"However, 2009 has been extremely challenging, with build levels extremely low. Now, the nation's house builders need support from the government as they see their way out of this downturn and try and meet the need for new homes. 2010 will be a watershed year in assessing whether house building targets can be met, both in terms of the quantity and quality of new homes."

NHBC rolling quarter statistics show that all regions reported higher levels of registrations for rolling quarter October to December 2009 than the same period in 2008. The North-East and Merseyside continue to show particularly strong improvements of 269 per cent and 127 per cent on the same rolling period last year.

NHBC statistics for the three months to the end of December 2009 also show:

Private sector applications held strong at 18,393 compared with 8,646 for the same period last year - an increase of 113%;

Public sector figures for the three months to the end of December were also up, at 7,685 – 6% higher than the same period a year ago (7,233).

MOD: New scheme to move Armed Forces up the property ladder

A pilot scheme to encourage home ownership amongst members of the Armed Forces has been launched by the Ministry of Defence and the Department for Communities and Local Government.

Armed Forces personnel will be allowed to purchase properties anywhere in England through a single service provider. Under the pilot scheme, the Government will provide members of the Armed Forces with up to 50% of a property's value.

Unlike similar schemes, personnel will be allowed to purchase properties anywhere in England through a single service provider, in order to meet the needs of the Armed Forces' mobile workforce.

In addition, applicants can sublet their properties and will not normally pay any fees on the equity while they remain serving members of the Armed Forces.

Defence Minister Kevan Jones said:

"Getting a first foot on the property ladder is an important step in any young person's life. By providing the flexibility to live anywhere in England and giving applicants the opportunity to sublet when they are working away from home, we have delivered a scheme that is tailor-made to meet the unique needs of the Armed Forces.

The scheme, called the 'Armed Forces Home Ownership Scheme (Pilot)', has £20m in funding from the MOD and will run until Spring 2013.

CML responds to FSA mortgage review and calls for strategic focus on mortgage funding

The Council of Mortgage Lenders has published two major documents this week. The first expresses support in principle for some of the regulatory reform proposed by the FSA under its mortgage market review. In the second document, however, the CML states its belief that such reform needs to be accompanied by a clearer Government strategy in relation to future mortgage funding. It concludes that conduct of business reform may be effectively irrelevant for the foreseeable future if the mortgage market shrinks due to unaddressed structural vulnerabilities in the mortgage funding markets.

The CML sees a crucial link between the two issues:

The loss of investor confidence in wholesale debt markets left a £300 billion funding gap that has only been filled on a temporary basis by government funds under the special liquidity and credit guarantee schemes. These schemes expire between 2011 and 2014, leaving uncertainty about how far, and through what sources, lenders will be able to refinance this funding;

Retail deposits will not be large enough to fill the gap. But the government has not yet recognised the need for a strategy to put mortgage funding markets back on a sustainable footing. Unless it does so, in the CML’s view it is likely that the mortgage market will shrink. This would make significant conduct of business reform by the FSA largely irrelevant for the foreseeable future.

CML Director General Michael Coogan commented:

"The CML believes that any conduct of business reform needs to go hand-in-hand with a strategic plan to achieve diversified funding for mortgage lenders, of all types.

"The FSA’s planned reforms are well-intentioned, even if their implementation is a source of concern. But there is a real risk that they may be at best irrelevant, or at worst may damage a fragile market at the wrong time, unless they are accompanied by a strategic plan to achieve and sustain stable mortgage funding markets for the future. We call on the Treasury today to make this plan of action a high priority.

"In specific areas, the FSA is over-reacting to recent events without a clear evidence base. The proposal to require income verification in all cases, and so prevent fast-track processing, is an example of this. The FSA needs to moderate its approach to ensure that regulation does not layer in worthless additional cost, or have the undesirable side-effect of creating financial exclusion among swathes of borrowers who may be perfectly able to sustain a mortgage commitment."

Download a copy of the CML’s response to the FSA mortgage market review

Download a copy of the CML’s outlook for mortgage funding markets in the UK

Industry news

Construction industry to emerge from recession in 2011

Government and public sector funders are being urged to provide a sustained approach to public sector construction investment, as new figures from the Construction Skills Network (CSN) forecast a slow return to growth for the construction sector for the 2010 to 2014 period.

The CSN shows the prognosis for the UK construction industry in the short term is very severe with construction output expected to have contracted by around 13% in 2009. The fall in employment in the sector has also been severe with a drop by approximately 375,000 workers from 2008 to 2010 and is forecast to be recouped by less than 100,000 by 2014.

A further, but marginal, decline of the sector is projected for 2010, but consistent recovery is not forecast until 2011, with a slow and steady return to moderate levels of growth as confidence returns to the market. Over the whole of the 2010 to 2014 period construction output is expected to average 1.7% growth each year.

Mark Farrar, Chief Executive of ConstructionSkills, said:

“The recession has hit construction extremely hard and the forecast recovery is likely to be long and slow. This situation remains fragile and we are concerned that, given the scale of the public sector deficit, potential funding cuts in the period ahead will further exacerbate the loss of skills before private sector investment has fully recovered.

“In a sector which supports some 8% of GDP and provides employment for large numbers of graduates and apprentices, stability in levels of long term investment plays a critical part in protecting employment and skills. As the public sector currently accounts for 30% (excluding PFI) of the industry’s business, decision makers will need to take account of the wider economic and employment impacts before acting.

FMB: Building industry still deep in recession

The Federation of Master Builders (FMB) also warned that the construction industry has a long way to go before a sustained recovery sets in, in response to its latest survey of members for the last three months of 2009.

Figures from the FMB’s State of Trade Survey for the last three months of 2009 reveal that 44% of FMB firms expect their workloads to decline in the first three months of 2010. Only 18% of FMB firms expect their workloads to increase The final quarter of 2009 also revealed a major decline in workloads and employment for FMB firms and, based on this outlook, 2010 looks sets to begin with a ninth consecutive quarter of deterioration.

Richard Diment, Director-General of the FMB said:

“The employment figures from our members’ survey are particularly alarming as, even after seven consecutive quarters of layoffs, 38% of FMB firms reported that they had cut staffing levels. Even more alarming is the fact that 33% of FMB firms expect to have to make staff cuts in the first three months of this year.

“Despite the urgent need to cut the public expenditure deficit, investment in the construction sector offers the best hope of propelling this country back into recovery because every £1 spent on construction output generates a total of £2.84 in total economic activity. Any cuts in construction would merely cripple an already badly damaged skills base and supply chain and seriously inhibit the building industry’s recovery.”

Land Use Change Statistics (England) 2008 - provisional estimates (January 2010)

The latest national statistics on Land Use Change were released under the auspices of the UK Statistics Authority this week.

Statistics in this release present provisional figures on Land Use Change in England. It provides estimates for 2008 of changes on previously-developed land and the average density of new dwellings. For some topics (see below) 2008 data are not yet robust and so the latest robust data available is presented.

In 2008, on a provisional estimate:

80% of dwellings (including conversions) were built on previously-developed land, compared to 77% in 2007;

New dwellings were built at an average density of 43 dwellings per hectare, unchanged from 43 dwellings per hectare in 2007;

2% of dwellings were built within the Green Belt (unchanged since 2004) and 7% of land changing to residential use (from any use) was within the Green Belt (an increase from 5% in 2007);

9% 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.

HBF news

Haiti earthquake appeal

Following the earthquake in Haiti, HBF last week launched an urgent appeal to the house building industry on behalf of its nominated charity Habitat for Humanity (HfH).

The earthquake decimated the country’s infrastructure and thus its ability to cope with the devastating impacts. It is a catastrophe of major proportions with early estimates suggesting that up to three million people have been killed, injured or made homeless.

Habitat for Humanity has been present in Haiti, working with poor and low-income families in need of decent housing since 1981. It has a Disaster Risk Assessment Team on the ground, establishing a clear picture of the situation and providing specialist shelter provision and reconstruction assistance. Further information about this is available on their website www.habitatforhumanity.org.uk

Whilst appreciating the difficult economic climate in which members are operating it only seems appropriate that our industry should support a charity that specialises in shelter provision, housing repair and reconstruction.

How quickly we raise funds will directly affect Habitat for Humanity’s ability to assist now, when their help really is needed. Please help by making a secure online donation today. www.habitatforhumanity.org.uk

Conference speaking

HBF’s Director of Economic Affairs, John Stewart, this week spoke at the Guardian’s ‘Future of Housing’ Conference on the keynote panel alongside Lord Best and Tory Housing Spokesman Grant Shapps.

John also spoke at the RTPI’s ‘Key planning issues in 2010’ conference on the impact the cumulative regulatory requirements are having on house building viability.

Events

New Homes Marketing Board / Smith Institute: Pre-Election Housing Debate 2010: The Conservative Agenda

Tuesday 23rd February 2010

The New Homes Marketing Board and the Centre for Social Justice are hosting an event in association with the Smith Institute in association that will look at Conservative proposals for housing delivery should they win the next election.

Speakers will include the NMHB chair David Pretty (CBE); John Howell MP, Shadow Communities and Local Government team; Richard Blakeway, Housing Adviser to the Mayor of London, and Tim Montgomerie, editor, ConservativeHome.

It will be chaired by Gabriel Doctor, the Centre for Social Justice.

The event will run from 1800-1930 and will be followed by a drinks reception

Limited spaces available, to request a space please email housingdebatead@smith-institute.org.uk

HBF to host housing ‘Question Time’ featuring Healey and Shapps

10th March, Westminster

The HBF’s Policy conference will this year be a pre-election ‘Question Time’ style debate featuring the main housing political heavyweights. Housing Minister John Healey and his Tory shadow Grant Shapps will take part in an open debate to be chaired by HBF Executive Chairman Stewart Baseley. The Lib-Dems are also expected to field a representative.

Questions will be taken from the assembled delegates on the key housing issues in what is sure to be a heated and fascinating debate with the General Election looming.

It will be followed by a debate featuring an expert panel of leading economists, including Citigroup’s Michael Saunders and Capital Economics Ed Stansfield which will look at the prospects for both the housing market and the general economy.

For further information and booking details go to;

Visit the website to book online

Housing Lecture 2010: Labour's Agenda

Tuesday 23rd March 2010

The New Homes Marketing Board and the Centre for Social Justice are hosting an event in association with the Smith Institute in association that will look at Labour’s housing policy proposals.

Speakers will include the NMHB chair David Pretty (CBE); Rt. Hon. John Healey MP, Housing Minister,

It will be chaired by Paul Hackett, Director, The Smith Institute.

The event will run from 1800-1930 and be followed by a drinks reception

Limited spaces available, to request a space please email housinglecturead@smith-institute.org.uk

HBF: Event diary dates

HBF has announced the return of three of its most popular social events for this year. The economic climate dictated that the HBF Ball, its North West Social dinner and its golf day have not taken place for the past two years, but member demand sees them return for 2010.

Please make a note of the dates for your diary and further details and ticket information will be issued in the new-year.

HBF Golf Day – Tuesday 13th July 2010 – Woburn Golf Course

HBF North West Social Dinner – Friday 10th September 2010 – The Midland Hotel, Manchester

HBF Ball – Friday 10th December 2010 – Marriott Grosvenor Square, London

HBF AGM & lunch Wednesday 28th April – the Hyatt Regency Hotel – the Churchill

HBF can also confirm that the HBF AGM & Annual Industry Lunch will take place on Wednesday 28 April at the Hyatt Regency Hotel, London. The day will begin with the AGM and Open Council meeting and be followed a drinks reception and the annual lunch. The key note speaker will be announced shortly.

If you have any queries about any of the above please contact the events team on 020 7960 1646 and events@house-builder.co.uk

Habitat for Humanity’s Hope Challenge 11-13th June 2010

Habitat for Humanity, HBF’s nominated charity will again be holding its Hope Challenge event in 2010. This unique and exciting outdoor challenge event will see teams;

Spending two days and two nights in the great outdoors

Sleeping in a self built shelter

Undertaking mental and physical team challenges

Last year’s Hope Challenge was a huge success and had the competitors trekking around the Edale and Hope Valleys, with a base camp in the sheltered Vale of Edale. In 2010 HforH are planning a larger and more exciting event with walking routes encompassing the surrounding hills including the Skyline Ridge over Mam Tor and the lower reaches of Kinder Scout.

However this is no ordinary weekend of walking! Participating teams will also be tested on their initiative and teamwork… and by building, and sleeping out in, their very own shelter they will experience some of the challenges faced by those who live in poverty housing.

Think you can rise to the challenge? Want to join HforH in Hope Challenge 2010?

Find out more about Hope Challenge 2010 http://www.habitatforhumanity.org.uk/hopeinfo.htm.

Take a look at the photos and video http://www.habitatforhumanity.org.uk/hopephotos.htm of Hope Challenge 2009.

Contact HfH http://www.habitatforhumanity.org.uk/hopecontact.htm with any questions about Hope Challenge.

TSY: Delivering design quality skills training programme

Transform South Yorkshire have developed the delivering design quality skills training programme – a free programme providing practitioners from the private sector, RSLs and local authorities with training that meets all levels of expertise.

The programme's approach will be practical, and aims to give professionals the tools they need to continue developing their design skills when they leave the session. The case study is at the heart of the teaching approach.

Please click here for more information and details of how to book

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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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