HBF Wales Weekly News Summary Friday 4 December 2009

4 December, 2009

Friday, 4th December 2009

Top stories this week

PBR: HBF says Government must build on foundations laid.....read more

HBF and FMB join forces on self-employment tax changes.....read more

Building for Life Award winners announced.....read more

Bank of England: Lending to Individuals October 2009.....read more

John Healey unveils proposals for second wave of eco-towns.....read more

Hometrack: House prices edge up for fourth month in a row

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Government and political news

Housing market news

Wales news

Carwyn Jones elected as new Labour Leader

Carwyn Jones has won the race to succeed Rhodri Morgan as leader of Labour in Wales and to become first minister in the Welsh assembly.

The long-term favourite, a 42-year-old barrister, said the party had a "great task" ahead after a "difficult few years" but "there are no no-go areas".

Prime Minister Gordon Brown said the Bridgend AM would be a "true fighter for all the people of Wales".

He won in the first round against his two rivals, with 52% of the vote. Mr Brown offered his congratulations and said: "I know that Carwyn will make taking on the Tories a priority: they would be a change that Wales cannot afford".

The sweeping victory followed a vote of Welsh party members, affiliated groups such as trade unions, MPs, AMs and its only Wales MEP.

Mr Morgan will officially step down next week after nearly 10 years and his successor said it was "particularly humbling to follow Rhodri as leader of Welsh Labour".

Describing the leadership race as a "a great contest for our party", Mr Jones said it had demonstrated Labour was "above all, the party of ideas in Wales... we are still, and always will be the party of Wales".

Andrew Davies to step down as AM

Welsh finance minister Andrew Davies is to step down as an assembly member at the next elections in May 2011.

Mr Davies, 57, has represented Swansea West for Labour since the assembly was created 10 years ago.

He was the key figure backing AM Edwina Hart who lost out to Carwyn Jones in the Welsh Labour leadership contest.

Making the announcement, Mr Davies said it is "time for me to have a greater balance and change of pace in my life and to seek out new challenges".

New powers key to meeting housing needs of Wales

The Deputy Minister for Housing Jocelyn Davies AM introduced the proposed Sustainable Homes Legislative Competence Order (LCO) which would give the National Assembly powers to legislate on housing for the first time.

The proposed LCO has been agreed by UK Cabinet and is now introduced in the National Assembly for Wales for Assembly Members to scrutinise it. Ms Davies said:

“I am delighted to lay this LCO in the National Assembly. Housing is an area which is largely devolved to Wales, but one where the National Assembly has no powers to legislate.

“The Welsh Assembly Government should have a role in deciding what legislation is needed to address the housing needs of Wales. We want to be able to propose legislation for Wales in relation to two themes: social housing and meeting the housing needs of vulnerable people. These are areas where the Welsh Ministers have extensive powers but the National Assembly has no powers to legislate at present.”

Gaining these powers for the National Assembly means that the Welsh Assembly Government will be able to propose legislation on its One Wales ambitions for example in the areas of Right To Buy, homelessness and second homes. The competence within the LCO covers:

Regulation of social landlords

Disposals by social landlords

Social Housing Tenancies

Homelessness

Housing allocations

Housing-related support

The provision of Gypsy and Traveller sites

Empty homes and Council Tax for second homes

Minister says final Budget will help Wales through the recession

Andrew Davies, Minister for Finance and Public Service Delivery, has tabled the Welsh Assembly Government’s Final Budget, which he said would help people, communities and businesses across Wales through the global recession and continue to drive forward the One Wales agenda.

He called for a ‘Team Wales’ approach to the challenge faced by public services. The Minister said:

“In the Draft Budget proposals we took a strategic approach to protect and sustain the key public services that people rely on and to continue our partnership work to help Wales weather the global economic downturn.

“Through taking the difficult decisions necessary to find efficiency savings, we were able to create the opportunity to allocate new revenue funding from reserves. Prioritisation for new strategic allocations was given to measures which will counteract the economic challenges we face.

“This includes £20 million to tackle youth unemployment and £4 million to support additional research and development work in collaboration with business.

Red tape fear over Welsh powers shift

Welsh planners have warned that levels of bureaucracy in the planning system must not increase if full legislative powers are granted.

Their call follows publication of a report by the All Wales Convention. This found that proposals to transfer powers from Westminster to the National Assembly for Wales offer substantial advantages.

HBF news

PBR: HBF says Government must build on foundations laid

HBF has told the Government that the housing market stimulus measures put in place in recent months must be extended in next week’s Pre Budget Report (PBR).

Following a range of recent meetings and its written submission, HBF has urged the Chancellor to use next week’s PBR to extend measures such as HomeBuy Direct, Kickstart and the temporary increase in the stamp duty threshold to support the market - and reap the economic benefits. In a press release issued this week Stewart Baseley, Executive Chairman of the HBF said:

“House building is so important to the economy, both economically and socially that the Government simply must maintain its support. The stimulus measures introduced have played a significant part in the current market stabilisation and it is vital that just as we are seeing the first signs of a recovery, these stimuli are not removed either in total or in part. The past 18 months have seen an unprecedented drop in output, and so employment, and as long as the lack of mortgage availability remains a significant constraint on the market, such support measures are absolutely vital."

HBF has also urged the Government to consider further steps to assist first time buyers, a key section of the market hit hardest by the reduction in mortgage availability; and to introduce a Mortgage Indemnity Guarantee scheme.

HBF members please click here to view a copy of the HBF’s PBR submission (please remember to login)

HBF and FMB join forces on self-employment tax changes

An online campaign website supported by the HBF and the Federation of Master Builders (FMB) has been launched this week to urge the Government not to proceed with its proposed changes to the tax rules on self-employment in the construction sector.

The Government’s proposals, on which a consultation closed in October, would deem all workers in construction to be subject to PAYE rules unless they qualify for one of three proposed exemptions. The proposals have created wide concern amongst industry bodies and HBF’s consultation submission raised several concerns about their impact and workability based on member comments.

In a press release issued to mark the launch of the campaign website, Stewart Baseley, HBF Executive Chairman, said:

"The nature of house building dictates that there needs to be significant flexibility in how house-builders employ their workforce. These proposals would penalise both companies and employees alike and it is far from clear they would be easy to implement in practice or fully reflect the risk that individual contractors actually bear. It is important that we do not create any additional or unnecessary barriers to building the homes we know this country needs in the years to come given the scale of housing need that exists."

The press release and campaign has been picked up in a major article in today’s edition of the Times. Please click here to view

Further lobbying activity is planned and those wishing to do so may add their support to the website campaign.

Please click here to visit the campaign website

HBF members please click here to view the HBF submission to the Treasury consultation (please remember to log in)

Industry news

Building for Life Award winners announced

The Building for Life award winners were this week announced at a ceremony in London. Seven outstanding schemes were selected this year for an award, out of a record 36 schemes that achieved a Building for Life standard. HBF member company, Crest Nicholson, earned the highest score ever since the initiative began in 2002 for its Lime Tree Square scheme in Street in Somerset. Crest also received an award for its Admiralty Quarter scheme in Portsmouth while Places for People and Rosemullion Homes were also recognised for outstanding achievement.

The awards are granted to house builders and housing associations which demonstrate a commitment to high design standards, good place making and sustainable development and are organised annually by the HBF and CABE.

Wayne Hemingway, Chair of Building for Life, said that residents of the winning schemes must feel as if they’ve won the lottery: ‘These schemes are shining examples of how you deliver great places to live, regardless of the economy. But the problem remains: they represent only a fraction of the housing built today. We urgently need to deliver this quality of housing as standard.’

Stewart Baseley, Executive Chairman at HBF, said that the schemes highlight the advances which developers around the country are making in getting to grips with design: “Surveys consistently show that builders are building what their customers want to live in.”

John Healey announces Housing and Planning Delivery Grant package for planners

On the 100th anniversary of the first Planning Act, Housing Minister John Healey has announced the latest allocation of support for councils to plan and deliver new homes and green energy projects under the Housing and Planning and Delivery Grant (HPDG) scheme.

Councils will get a share of a £135m funding pot for planning and building new homes, and expert support to pioneer a new way of working with developers to deliver renewable energy schemes, such as biomass and geothermal power plants.

HPDG is an additional top-up to mainstream funding and councils can choose how to spend it locally. Last year councils received £100m, the provisional allocations for the second year of the three-year grant, (covering 2009-2010) have now been confirmed for councils that have identified at least five years worth of suitable sites ready for housing and a further ten years worth for future development.

The average grant councils will receive is approximately £350,000, paid to 375 authorities. In order to be eligible for the planning element of the grant, local authorities must show progress on:

Continuing to provide suitable land for development over future years, particularly as the housing market recovers from current economic challenges;

Providing the local plans necessary to deliver the needed homes;

Carrying out a strategic assessment of their housing market; and

Processing planning applications quickly

The first six pilot Planning Performance Agreements (PPAs) for renewable energy and low carbon schemes have also been confirmed. For each PPA developers and local planning authorities will receive expert support to assess proposals for major green projects before an application is made. This will give developers the opportunity to address issues that could delay their applications and agree a timetable for delivery.

CLG: Housing and planning statistics 2009

The latest annual volume of Housing and Planning Statistics for 2009 was released this week under arrangements approved by the UK Statistics Authority. The publication replaces the annual Housing Statistics publication and contains all the information previously contained within that publication, but with the addition of two sections on planning statistics.

This annual compendium covers all aspects of housing and planning in England (and in some cases, tables also cover the United Kingdom). Key figures from the report show:

Of the 22 million dwellings in England in 2007, 82% of them are houses or bungalows. In London 43% of dwellings were flats;

In 2008, 68% of households were owner occupiers, 18% were social tenants and 14% were private renters;

Lower quartile house prices stood at 6.98 times lower quartile earnings in 2008, up from 4.72 times in 2002, but down from 7.25 times in 2007;

In 2007-08 in England the average rent paid by council tenants was £295 per month compared to £333 for Housing Association tenants and £583 for free market private rents;

In 2007-08 around 2.7% of households were living in overcrowded conditions, ranging from 6.8% in London to 1.4% in the North East and East Midlands;

There were an estimated 3,860 Right to Buy sales in England in 2008-09, a decrease from 15,110 sales in 2007-08;

The average energy efficiency rating for the housing stock is increasing - almost 8% of houses were in the more energy efficient bands A-C in 2007 compared with only 2% in 1996;

In 2008, 77% of new dwellings (excluding conversions) were built on previously-developed land, compared with 74% in 2007;

The number of planning applications received by planning authorities in April-June 2009 decreased by 21% when compared with the quarter April-June 2008.

Government confirms introduction of Anti-Blacklisting Regulations

It will be unlawful for trade union members to be denied employment through blacklists under plans outlined by Employment Relations Minister Lord Young this week.

To prevent employers from blacklisting workers for their trade union membership or activities the Government will introduce new rules banning the practice. The move comes as the Government publishes its response to a public consultation on the subject held over the summer, and follows evidence that a number of employers in the construction sector had been unlawfully vetting workers. Employment Relations Minister Lord Young said:

“Blacklisting someone because they are a member of a trade union is totally unacceptable.

“There is already legal protection against the misuse of people’s personal details. We will now strengthen the law by introducing new regulations to outlaw the compilation, dissemination and use of blacklists.

“The Government is determined to stamp out this despicable practice and our legislative proposals are a proportionate and robust response”.

The regulations will:

Make it unlawful for organisations to refuse employment or sack individuals as a result of appearing on a blacklist;

Make it unlawful for employment agencies to refuse to provide a service on the basis of appearing on a blacklist; and

Enable individuals or unions to pursue compensation or solicit action against those who compile, distribute or use blacklists.

UCATT welcomes Anti-Blacklisting Regulations

Construction union UCATT have welcomed the publication by the Department of Business of the new regulations designed to outlaw the blacklisting of trade unionists. Alan Ritchie, General Secretary of UCATT, said:

“Blacklisting is a disgraceful, underhand practice. Until early this year most major construction companies were involved in the blacklisting of workers. The introductions of laws, which are designed to prevent blacklisting, are welcome and long overdue. Never again must the lives of workers and their families be ruined because of blacklisting.”

UCATT said it will explore with sympathetic backbench Labour MPs if the regulations can be strengthened when they are debated in the House of Commons.

Mr Ritchie, added: “UCATT will be working with members of Parliament in order to ensure that when the blacklisting regulations are finally introduced they are as robust as possible.”

DECC: UK energy system gets smart

Smart meters will be rolled out through energy suppliers to every home by the end of 2020 under final plans published by Energy and Climate Change Minister Lord Hunt. A paper setting out the case for developing smart grids in the UK is also being published. Lord Hunt said:

“Smart meters will put the power in people’s hands, enabling us all to control how much energy we use, cut emissions and cut bills.

“Smart grids will help manage the massive shift to low carbon electricity such as wind, nuclear and clean fossil fuels.

The Government’s response to the smart meter consultation sets out how smart meters will be rolled out across Britain by the end of 2020. This includes:

Making energy suppliers responsible for installing smart meters in their customers’ homes;

Supplying a standalone display device with meters to make it easy for consumers to see and understand their energy use and carbon emissions in real time

Centrally coordinating the communications between smart meters and the utility companies to ensure easy switching between suppliers, and to provide a platform for the development of smarter grids in the future.

Ofgem to play a key role in maximising benefits of smart meters for consumers

Ofgem will work with DECC (Department of Energy and Climate Change) and the energy industry to develop a framework to support the introduction of smart meters. The first phase of this work will see a prospectus published in summer 2010, which will set out detailed proposals for the regulatory and commercial framework, as well as define the minimum functions that all smart meters will have to deliver for consumers.

The management of the first phase of the smart metering programme will be carried out jointly between DECC and Ofgem’s delivery arm, Ofgem-E Serve.

DECC, Ofgem and the energy industry have set out a vision for how Britain can develop smart grids to help deliver a low carbon economy. This vision paper will be followed by a road map which will set out a pragmatic action plan for encouraging the growth of smart grids.

Designs for Later Life: New report calls for action on housing for older people

A new report has recommended that the design and development of new homes for older people must become a national priority if the UK is to avoid a future housing crisis

Launched this week by the Homes and Communities Agency (HCA), in partnership with Communities and Local Government (CLG) and the Department of Health, the HAPPI (Housing our Ageing Population: Panel for Innovation) report calls for positive action in response to the UK’s ageing population.

The government- sponsored HAPPI report, makes a series of recommendations including:

The building of new homes for the ageing population becomes a priority for central government;

Local Authorities co-ordinate new efforts by housing providers and social and voluntary services to provide solutions to the problem;

Incentives for house builders to develop new types of housing for this burgeoning market;

Housing Associations maximise the potential of design and innovation in developing housing for older people; and

Encouraging houseowners to free under-occupied family homes for sale and rent by providing attractive, spacious and manageable alternative accommodation.

Zero carbon for non-domestic buildings consultation

The consultation ‘Zero carbon for new non-domestic buildings’ was published on the 24th November 2009. The closing date is the 26th February 2010.

The consultation relates to proposals for working towards the Government’s ambition that all new non-domestic buildings should be zero carbon from 2019, with the public sector leading the way in 2018.

Some HBF members build mixed use developments and as such it is important that the requirements in this consultation do not conflict with those that will be required in new homes.

HBF therefore intends to respond to this consultation.

A meeting/workshop to formulate our response will be held early in the new year either in Birmingham or London.

If you or anyone in your organisation would like to take part in this response process please contact Rosie on rosie.hinchliffe@hbf.co.uk

Economic news

Bank of England: Lending to Individuals October 2009

According to the latest data from the Bank of England, total net lending to individuals rose by £0.3bn in October. The twelve-month growth rate fell to 0.7%, and the three-month annualised growth rate increased 0.3 percentage points to 0.5%.

Within the total, net lending secured on dwellings increased by £0.9bn, in line with the September increase and above the previous six-month average of £0.6bn. The twelve-month growth rate was unchanged, at 0.8%.

The three-month annualised growth rate increased 0.4 percentage points to 1.0%. Within total secured lending, secured lending by banks (excluding the effects of securitisations) increased by £3.1bn, slightly below the September increase (£3.3bn) but above the six-month average of £2.6bn. The number of loan approvals for house purchase (57,345) was above the September figure (56,205) and above the previous six-month average, whereas approvals for remortgaging (24,596) were below both the September figure and the previous six-month average. The number of loans approved for other purposes (29,195) was higher than in September and higher than the previous six-month average.

Consumer credit fell by a net £0.6bn, below the previous six-month average of -£0.1bn. Credit card lending increased by £0.1bn and other loans and advances fell by £0.7bn. The annual growth rate of consumer credit continued to fall, to -0.1%; the three-month annualised growth rate fell to -2.2%.

Government and political news

John Healey unveils proposals for second wave of eco-towns

Housing Minister John Healey has announced proposals for a second wave of eco-towns and pledged to double the money to a total of £10m to support councils in developing their plans.

In July, Mr Healey announced that four locations had met the tough standards to become eco-towns. This week, the Housing Minister announced that a further nine local authorities are considering plans to develop new communities to eco-town standards.

These major new developments will need to meet the pioneering green standards set out in the eco-towns planning policy statement published in July. Proposals for sustainable developments need to include 5,000 homes and demonstrate innovative ideas for how jobs, schools and services are delivered in low carbon ways that will help the UK respond to climate change. The potential second wave eco-town proposals are:

Schemes at Shoreham Harbour in West Sussex and Northstowe in Cambridgeshire, where there is an opportunity to redesign elements of the existing projects to meet even higher sustainability standards.

Five authorities and partnerships, covering ten locations in Taunton (Monkton Heathfield and Comeytrowe), Yeovil, Leeds City Region (Aire Valley, York North West, North Kirklees and Bradford-Shipley canal corridor), Lincoln (Lincoln Area and Gainsborough) and Coventry. In these locations, the concepts are still at an early stage, but development work under the eco-towns PPS offers the possibility of creating an outstanding new community providing it is feasible and deliverable

Councils in Cornwall and the Sheffield City Region (Dearne Valley, South Yorkshire) want to use the eco-towns concept to carry out a broader survey of potential, test alternative options for development and then use the eco-town concept and standards to apply across their area.

London Mayor's affordable homes target delayed

The London Mayor’s target for achieving 50,000 affordable homes has slipped by one year because of the current economic conditions, the London Assembly heard this week.

Sir Simon Milton, Deputy Mayor for Policy and Planning, told the Assembly’s Planning and Housing Committee that Boris Johnson is “confident” he will now achieve the target by 2012. He said the homes would be both new builds and acquired properties.

Jenny Jones AM, Chair of the London Assembly Planning and Housing Committee, said: “We welcome today’s confirmation that the 50,000 affordable homes target will be met, but we regret the delay. The Mayor must do his utmost to ensure this important target will not be affected by any further delays.”

The Committee will examine the delivery of the Mayor’s Housing Strategy – and his 50,000 affordable homes target – in more detail at a meeting on 16 March 2010.

Housing market news

Hometrack: House prices edge up for fourth month in a row

Hometrack published the results of their monthly house price survey this week. According to the survey, house prices rose by 0.2% in November 2009. This represents the fourth consecutive increase in house prices and brings the year on year rate of growth to -2.9%.

This is the third consecutive month that the survey has posted a 0.2% price rise. But in Hometrack’s figures this pick up in market activity and prices is not one that has been felt across the whole country. There remain large swathes of the country where prices continue to be unchanged or have seen continued price falls.

Hometrack say that looking at prices today and comparing them to six months ago reveals that the house price recovery has been felt across 37% of the country. Furthermore, compared to a year ago prices are higher across just 2% of the country.

The pick up in market activity over 2009 has been driven by rising demand yet the latest survey shows that new buyer registrations grew by just 0.1% in November, the lowest level since the start of the year. A decline in demand is inevitable in the run up to Christmas but there are signs that the upward pressure on prices is likely to decline in the months ahead.

While overall pricing levels are still lower than a year ago, achieved prices have firmed significantly. The proportion of the asking price being achieved currently stands at 93.2% and is still rising month on month. Yet the time taken to sell has now started to plateau, having fallen for each of the last 9 months. Further price rises could well result in an increase in the time to sell as stronger pricing meets greater resistance from would-be buyers whose numbers are also growing more slowly. The net result is likely to be less upward pressure on prices in the months ahead.

Nationwide: House prices edge up further in November

The Nationwide’s house price index was released this week. Key findings include:

The average house price rose by 0.5% in November, the same rate as in October. The average house price stood at £162,038 in October and rose to £162, 764 in November;

Year-on-year house price inflation increased from 2.0% to 2.7%;

The labour market has so far held up better than expected.

Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:

“The monthly rate of house price inflation was unchanged in November at a seasonally adjusted 0.5%, leaving the average price of a typical property 2.7% higher than a year earlier. At £162,764, the average house price is at a similar level to where it was in early 2006. The 3 month on 3 month rate of change – generally a smoother indicator of the near term trend – dropped to 2.8% from 3.5% in October and 3.8% in September. This suggests that house prices are now rising at a more moderate pace than in the spring and summer months, when they experienced a very strong bounce from the early 2009 lows.

“The outlook for the housing market remains crucially dependent on labour market conditions, and here recent developments have been somewhat more encouraging than might have been expected. With the UK experiencing its longest and deepest recession since WWII, most economists expected unemployment to increase very sharply in 2009, perhaps breaching the psychologically important three million mark by the end of the year. While unemployment has indeed increased noticeably, the rise has not been as rapid and pronounced as previously feared. Based on the latest labour market figures from September, it now looks unlikely that the jobless total will reach three million before the year is up.”

Land Registry: House price index

The Land Registry data for October shows a positive monthly house price change of 0.6%, which is the fifth month in a row in which the movement has been above 0%. The annual change now stands at -3.4%. This is the sixth month in a row in which the fall in annual change has eased. The average house price in England and Wales is now £159,546.

Sales volumes averaged 52,608 per month from May to August 2009. In comparison to this, during the same months last year, the figure stood at 56,107.

Key regional observations include:

All regions in England and Wales experienced a decrease in their average property values over the last 12 months;

The region with the most significant annual price fall was the West Midlands with a movement of -6.3%;

The North West experienced the greatest monthly rise with a movement of 1.9%;

Wales was the region with the most significant monthly price fall with a movement of -2.3%.

RICS: Rents set to start rising

RICS has published the results of its residential lettings survey for October (3rd quarter) 2009. The survey shows that surveyors expect to see rent rises in the New Year as the number of rental properties coming onto the market fell for the first time since January 2008.

RICS says that the recent pick up in the housing market seems to have led to drop off in the number of rental properties, particularly houses, being made available and as a result surveyor optimism has increased for the first time since July 2008. 22% more surveyors expect rents to rise rather than fall in the next three months.

The drop off in supply is the main driver for the more positive sentiment, with new instructions reaching their lowest levels in the survey’s history (1998). A net balance of 11% of surveyors have reported seeing the number of new instructions coming onto the market falling rather than rising.

Demand for rental property is still rising as 16% more surveyors saw activity over the past three months pick up; in particular demand for houses was particularly strong with 22% more surveyors reporting rising rather than falling numbers of people looking to rent. Tenant demand was strongest in London, but increased in most other parts of the country bar the east. Jeremy Leaf, RICS spokesperson, commented:

“It seems the current upward trend in the housing market is having a more significant effect on the lettings market, with many of the accidental landlords returning to the sales market to take advantage of the recent price increases. As a result the recent oversupply is reversing, with new instructions at the lowest levels we have seen. This of course is impacting on prices and tenants no longer have as strong a bargaining power as they did."

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/

Rosie Hinchliffe

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