Friday, 6th November 2009 Top stories this week HBF Pre Budget Report submission.....read more Crest Nicholson and Stewart Milne scoop top innovation awards.....read more New orders in the construction industry, September 2009.....read more CPA: Construction trade survey.....read more Halifax: House price index.....read more Bank of England maintains Bank Rate and increases size of Asset Purchase Programme.....read more Quick LinksWales news HBF news Industry news Housing market news Economic news Government and political news Events Wales news £20m to make homes more affordable Shared equity home ownership and re-starting building work on stalled housing developments are two key areas to benefit from an additional £20m Welsh Assembly Government funding. This makes a total of £62m that has been provided from the Strategic Capital Investment Fund in response to the impact on housing of the recession. Assembly Government officials are now working with the HBF, Welsh Local Government Association, and Community Housing Cymru to ensure that the money can be spent in 2010/2011. Officials will be contacting Local Authorities and Housing Associations before Christmas to ensure that schemes are ready to go in April 2010. Read more to top Regional governments must not be excluded from a new deal on climate change At the start of the last set of negotiations before the crucial climate change talks in Copenhagen, Environment Minister Jane Davidson has called for regional governments not to be excluded from any new deal. The Minister is attending the final round of preliminary talks in Barcelona on a new UN climate treaty before December's Copenhagen summit. The Environment Minister is representing Wales and also regions from all over the world in her role as Co-Chair of the Network of Regional Governments for Sustainable Development (nrg4SD). The group highlights the role that regional governments play in sustainable development. Read more to top £5m flood defence scheme opened in New Tredegar The Welsh Assembly Government provided £4.55m for the New Tredegar Flood Alleviation Scheme, with an additional £550,000 from Caerphilly County Borough Council. The defences, which were built by Environment Agency Wales, will reduce the risk of flooding to over 38 properties along the river Rhymney. New Tredegar has a long history of small floods and experienced significant flooding in 1998 and 2000 when a number of properties along the river Rhymney were damaged. These include homes, a sports centre, a primary school and the Glan yr Afon residential home. Read more to top HBF News HBF Pre Budget Report submission HBF last week submitted its recommendations to Treasury with regard to the steps it feels need implementing in the Pre Budget Report to support housing delivery. Recomendations include; Continuation of the Government stimulus measures including HomeBuy Direct, Kickstart, and the increase in the Stamp Duty threshold past the end of the year More support for first time buyers Introduction of a Government Mortgage Indemnity Guarantee (MIG) scheme Support for the private rented sector Members can view the full submission please click here to top Industry news Crest Nicholson and Stewart Milne scoop top innovation awards Crest Nicholson and the Stewart Milne Group walked away with the top prizes at HBF’s Housebuilding Innovation Awards in London, organised by Housebuilder magazine. Each was named Innovator of the Year – Crest for large companies, Stewart Milne in the small to medium category – in the prestigious awards. The industry was out in force on a superb night hosted by the hilarious and irreverent Gyles Brandreth at the Millennium Mayfair hotel. The awards celebrate innovation in all aspects of the industry including sustainability, design and marketing. This year’s winners were: Housebuilding Innovator of the Year (large): Crest Nicholson Housebuilding Innovator of the Year (small to medium): Stewart Milne Group Housing Product of the Year: Smart Meter by first:utility Sustainable Housebuilder of the Year: Crest Nicholson Best Low/Zero Carbon Initiative: Miller Homes for Miller Zero Best Customer Satisfaction Initiative: Explore Living for Eiport Best Regeneration Partnership: Places for People for St Thomas' School, Kensington Best Marketing Award: joint winners - Barratt and the East Thames Group The Community Award: Coast & Country Best Design: Linden Homes (Eastern) - be:Newhall to top New orders in the construction industry, September 2009 According to the latest data released by the Office for National Statistics, private housing orders in the three months to September 2009 fell by 14% compared with the previous three month period and fell by 14% compared with the same three month period a year earlier. Private housing orders in the year to September 2009 fell by 44% compared with those in the previous 12 months. Public housing and housing association orders in the three months to September 2009 rose by 66% compared with the previous three month period and rose by 36% when compared with the same three month period a year earlier. Public housing and housing association orders fell by 7% in the 12 months to September 2009 compared with the previous 12 months. All comparisons in this sector are affected by large variations due to its relatively small size. Read more to top CPA: Construction trade survey The latest construction trade survey, released this week by the Construction Products Association, reported that all areas of the industry contracted during the last quarter. Furthermore, the CPA states that prospects in most areas of the industry appear relatively bleak in the near term with orders and enquiries falling for civil engineering contractors, building contractors and specialist contractors. In addition, sales of construction products are also anticipated to fall significantly near term. This concurs with the latest forecasts from the Construction Products Association, which anticipates that the construction industry will endure its sharpest fall on record during 2009 with a further fall in output during 2010 prior to growth only in 2011. With the sharp falls currently in private sector construction, and anticipated spending cuts postelection for public sector construction, this is a critical time for the industry. Key findings in the survey include: 86% of heavy side manufacturers and 75% of light side manufacturers reported that sales, on balance, fell significantly in the third quarter of 2009; 60% of building contractors reported that output fell in the industrial sector and 50% reported that output fell in the commercial sector during the last three months; 63% of building contractors reported that their order books fell in the industrial sector and 76% reported that their order books have fallen in the commercial sector; 62% of heavy side and 75% of light side manufacturers stated that unit costs had risen due to rises in raw materials prices and fuel/energy costs despite falls in labour costs; 75% of building contractors reported that tender prices and profit margins fell over the last quarter and 74% of civil contractors reported that, on balance, tender prices fell during the same period. Read more to top Recovery in manufacturing gaining momentum The CIPS/Markit Purchasing Managers’ Index (PMI) in manufacturing has moved above the neutral 50 mark, much to the relief of economic commentators. The seasonally-adjusted reading showed 53.7 after September's disappointing 49.9 (adjusted from previous reports). Rates of new work and production rose, as well as a modest rise in new export business. Staffing levels however continued to be cut. David Noble, Chief Executive Officer at the Chartered Institute of Purchasing & Supply, said: “It appears that the manufacturing sector has turned a corner and is starting to pull itself out of recession. After this long and deep downturn, manufacturers are now reporting strong growth in both output and new orders. However, the sector has been so hard hit since the recession began that it will be a long time before it returns to its previous level. Manufacturing is still fragile and will be highly vulnerable for some time to come. “One of the most positive developments noted by purchasing managers is that their clients are starting to restock inventories, which is encouraging them to restart production lines. This is important as it suggests the growth may be sustainable rather than a short term blip. Though the rate at which firms lay-off staff continues to ease, a turn around in the labour market is still some way off.” Read more BCIS: Tenders fall lower despite stabilisation in new work output The latest Tender Price Index compiled by BCIS, the Building Cost Information Service of the RICS, was published this week. The report shows that new work output levels have stabilised during the second quarter of 2009, remaining virtually unchanged from the previous quarter, however despite this change in trend tender prices have fallen even further during Q2, hitting a rate of decline not seen since the early 1990's, says, published today. The price of new construction work fell another 4.0% in the second quarter of this year, and is 11.7% down on the same quarter last year. Since a peak in prices in late 2007, prices have fallen 13.1%, with BCIS predicting that they still have a further 3.3% to go over the next year, before starting to recover in 2011. The main driver for declining tender prices has been the increased competition in the market caused by the steep drop off in orders and the consequential decline in new work output. Despite new work output stabilising in Q2 compared with Q1, it remains 14% lower than a year ago, and although construction orders saw a quarterly rise of 25%, they also fell by 14% compared with the same quarter in 2008. Read more UCATT leader calls on Government to implement safety report Alan Ritchie, General Secretary of construction union UCATT, has used a major speech on safety to urge the Government to fully implement the Donaghy Report. In July Rita Donaghy the former head of ACAS published “One Death is Too Many” her Government commissioned report examining the reasons for the high number of construction fatalities. The highly comprehensive report made 28 recommendations to improve construction safety. The Government have not yet formally responded to Ms Donaghy’s report. Speaking at the British Safety Council’s conference on Health and Safety in the Construction Industry, Mr Ritchie, said: “The Donaghy Report should be used as the blueprint for restructuring the industry and making it fit for purpose.” The key recommendations in the Donaghy report include extending the Gangmasters Act to cover the construction industry and the introduction of statutory director’s duties. UCATT are concerned that the delay in the Government’s formal response to the report could mean that recommendations which require primary legislation, such as the introduction of statutory director’s duties will not be included in the Queens Speech which takes place on 18th November. Read more HCA: Affordable homes to become renewable with £5m share of Government grant An initiative aimed at increasing the use of renewable construction materials in affordable homes has been agreed by DECC (Department of Energy and Climate Change) and the Government’s housing and regeneration body the HCA (Homes and Communities Agency). DECC has provided funding under the Low Carbon Investment Fund, which will be administered through the HCA’s National Affordable Housing Programme. The funding is to create a series of greener homes designed to minimise environmental impact through the increased use of building materials from renewable sources. Only homes that start on site during this financial year, achieve Level 4 or above of the Code for Sustainable Homes and use a very high proportion of construction materials from renewable sources such as timber frame, natural insulation and timber windows will be eligible for funding. Developers will also be required to install smart meters to track energy use and monitoring will continue once residents have moved in to the homes. Robert Napier, Chairman of the HCA said: “This is a highly significant stepping stone in the bid to create greener homes and using renewable materials is imperative to the future of house building. The funding will be a catalyst in helping to develop the skills and methods needed to create a low carbon economy.” Read more to top Housing market news Halifax: House price index The latest Halifax house price index, published this week, reported that: The average house price increased by 1.2% in October. This was the fourth successive monthly increase; Prices in the three months to October were 2.9% higher compared to the previous three months; Nationally, the average house price has risen by 2.9% (£4,667) since December 2008. Prices have increased by 7.1% during the past six months since reaching a trough in April 2009; an increase in the average price of just over £11,000. This follows a decline of 23% between August 2007 and April 2009; House prices in October were 4.7% lower on an annual basis. The annual rate of change (measured by the average for the latest three months against the same period a year earlier) has fallen sharply from a low of -17.7% in April. It is at its lowest since May 2008 (-3.8%). Commenting, Martin Ellis, Housing Economist, said: "House prices increased by 1.2% in October, marking the fourth consecutive monthly increase. Nationally, house prices have risen by 2.9% since the end of 2008. They are now 7.1% higher than six months ago when prices reached a trough in April. “Demand for houses has risen in recent months due to the very low level of interest rates, the decline in property prices since the summer of 2007 and a pick-up in consumer confidence on the back of better economic news. Higher demand has combined with a low level of properties available for sale to result in rising house prices over the past few months. “There are some indications that more people are deciding to put their homes on the market, encouraged by the recent improvement in market conditions. A continuation of this trend could help to improve the balance between supply and demand, curbing the strength of the stimulus to house prices resulting from the current imbalance." Read more to top Hometrack: House prices edge up despite clear slowdown in new buyer demand According to the latest data from Hometrack, house prices increased by 0.2% in October 2009 - the third consecutive increase, bringing the year on year rate of house price growth to -4.2%. Over the spring and early summer agents reported to Hometrack that new buyer registrations were growing by an average of 7.5% per month, but the last three months have seen new buyer registrations average just 1.1% a month. This suggests that the pent up demand that has boosted the market in recent months is starting to fade in the face of firmer pricing and fewer clear bargains. Hometrack also reported that pricing has firmed in recent months - albeit off a low base - on the back of higher sales volumes and improved sentiment. The proportion of the asking price being achieved currently stands at 92.9% - this is within 2% of where it was at the start of the credit crunch (94.8%) and compares to a recent low of 88.3% in February 2009. The average time taken to sell a property is still some 30% off the levels seen at the peak of the market in 2007. The current time to sell averages 8.4 weeks compared to a low of 5.8 weeks seen in May 2007. Read more to top NAEA: Five hunters for every property Demand is exceeding supply across the UK housing market, with estate agents registering five house hunters to every available property. The monthly market survey of the National Association of Estate Agents found that the average branch had 287 house hunters on its books in October, down slightly from 294 the previous month. The supply of properties also fell. The average branch had 57 properties on its books in October, down from 62 in September. The NAEA state that this demand is pushing house prices up as the gap between asking and selling prices fell from 10.9% in September to 8.8% in October. This increase in demand did not translate into an increase in sales – which dropped from nine in September to eight in October. Read more to top Economic news Bank of England maintains Bank Rate and increases size of Asset Purchase Programme The Bank of England’s Monetary Policy Committee has voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to continue with its programme of asset purchases financed by the issuance of central bank reserves and to increase its size by £25bn to £200bn. The Bank stated that In the light of the Committee’s latest Inflation Report projections and in order to keep inflation on track to meet the 2% inflation target over the medium term, the Committee judged that maintaining Bank Rate at 0.5% was appropriate. The Committee also agreed that it should extend its programme of purchases of government and corporate debt by £25bn to a total of £200bn, financed by the issuance of central bank reserves. The Committee expects the announced programme to take three months to complete. The scale of the programme will be kept under review. The Committee’s latest inflation and output projections will appear in the Inflation Report to be published at 10.30am on Wednesday 11th November. The minutes of the meeting will be published at 9.30am on Wednesday 18th November. Read more to top Government and political news Mayor of London frees up land for second stage of housing revolution More than 30,000 new homes could be created in the capital by freeing up under-used land owned by the Greater London Authority (GLA). The announcement was made by the Mayor of London, Boris Johnson, as he challenged London’s developers and investors to help rethink the future delivery of affordable housing. Speaking at his Housing Investment Summit the Mayor called on the key players present to put forward innovative and cost-effective measures to maximise delivery on any potential developments on GLA land. He wants London to show the rest of the UK that it is possible to secure the building of new homes in the face of reduced public spending. He has asked for an audit of land owned across the GLA family, including Transport for London, the London Development Agency and the London Fire and Emergency Planning Authority, to identify potential development sites. The Mayor of London, Boris Johnson, said: “We're already on track to deliver 50,000 affordable homes which will benefit thousands of Londoners but this success cannot be an excuse to take our foot off the pedal. We have to set our sights to the future and start working now to deliver the next 50,000 and the 50,000 after that. “The GLA is sitting on hundreds of potential housing sites that could be used to build more than 32,000 new homes and I know we’re not alone. London’s councils, private institutions and HCA can all do the same but the cost and red tape involved is suffocating. “I want to change this. To do this we need innovative ideas that will reshape how we invest, build and deliver affordable homes in London and in return I’ll put my land where my mouth is and show London is leading the way on delivering affordable homes for 2011 and beyond.” Read more to top Events HBF Annual Technical Conference 2009 – The TechnoCentre, Coventry The Building Regulatory Agenda – from here to 2016 Wednesday 18th November 2009 The conference aims to look at the forthcoming amendments to the Building Regulations, addressing CLG’s policy overview and in particular concentrating on the recent Parts F & L consultation. Expert speakers from CLG, BRAC, NHER, Zero Carbon Hub and BRE will be there to answer your questions on all building regulation issues. For further information please visit www.house-builder.co.uk or contact the events team on 020 7960 1646 to top Consumer code briefings A series of briefings is now underway on the proposed Consumer Code for home builders, which will be introduced in April 2010 in response to issues raised in the OFT market study into the home-building industry that was published in September 2008. The events will take place on: Birmingham - 9th November National Motorcycle Museum Stirling - 11th November Macdonald Inchyra Grange Hotel Manchester - 18th November Manchester Conference Centre London - 23rd November Mayfair Conference Centre Leeds - 25th November Royal Armouries Bristol - 30th November Holiday Inn Filton These initial, senior-level briefings are for chief executives and managing directors. The presentations will introduce the requirements of the Code and will examine the potential impact on your business. Places are limited and will be allocated on a first come, first served basis. Details of these FREE briefings and a copy of the Code itself are available on the Consumer Code website at www.newhomesconsumercode.com WHAT HOUSE? Awards 2009 – gala presentation luncheon Tickets and tables are now available for the 2009 What House? Awards, taking place at London's Grosvenor House Hotel on Friday 20th November. The event is one of the highlights of the house building calendar, as the industry meets to salute the best new homes in Britain. To book your seats for this prestigious event please email Derek Smith. Or download a booking form at www.whathouse.co.uk/awards. to top For other HBF events visit the website http://www.hbf.co.uk/index.php?id=eventsandmeetingsFor HBM events visit http://www.hbmedia.co.uk/ to top Rosie Hinchliffe/Steve Turner View Previous Weekly News Summary
