Friday, 7th August 2009 Top stories this week Integrated regional strategies - consultation......read more New orders in the construction industry, June 2009.....read more Halifax house price index.....read more RICS: Outlook improving but housing market not out of the woods yet.....read more Bank of England maintains Bank Rate at 0.5% and increases size of asset purchase programme by £50bn.....read more New Homes Week’ 2009 - JUST FIVE WEEKS TO GO - ARE YOU READY??.....read more Housing Market Intelligence Conference – Housing Minister confirms .....read more Quick Links Industry news Housing market news Economic news Government and political news Events Industry news Integrated regional strategies - consultation On Wednesday CLG and the Department for Business, Innovation and Skills (BIS) jointly published a new draft policy statement to replace existing government policy on preparing Regional Spatial Strategies (PPS11). This new policy statement reflects the provisions of the Local Democracy, Economic Development and Construction Bill which is expected to receive Royal assent in the Autumn. The draft policy statement sets out the requirements and procedures for the production of the new single integrated regional strategies, in effect, combining the existing Regional Spatial Strategies with the Regional Economic Strategies. Such strategies will be prepared by the new “Responsible Regional Authority” defined as Regional Development Agencies and Local Authority Leaders’ Boards. Five of the eight English Regions already have such Leaders’ Boards which are set to replace the Regional Assemblies. One of the key responsibilities of the new style strategies will be to show how the region will meet its housing need and demand based on a robust evidence base. However, there is no explicit requirement in this Policy Statement for the strategies to contain an overall housing target or a district by district housing requirement figure albeit that one of the main principles of the new process should be to “set out regionally and sub-regionally specific policies, which focus on key priorities, translate national policies to the local level and provide a clear framework for local decision makers, and public and private investors”. (NOTE: this might be intended to be in more detailed guidance for the production of such strategies in the future). The Secretary of State will continue to have the final say in signing off such regional strategies following an examination in public and any formal modifications the Secretary of State may wish to make. The consultation runs until 30th October. Read more to top New orders in the construction industry, June 2009 According to statistics issued by the ONS this week orders in the three months to June 2009 rose by 18% compared with the previous three month period. Orders in the 12 months to June 2009 fell 27% compared with the previous 12 months and orders in the three months to June 2009 fell by 21% compared with the same period a year earlier. All orders figures quoted are seasonally adjusted and in constant (2005) prices. Private housing orders in the three months to June 2009 rose by 25% compared with the previous three month period, but fell by 33% compared with the same three month period a year earlier. Private housing orders in the year to June 2009 fell by 50% compared with those in the previous 12 months. Public housing and housing association orders in the three months to June 2009 rose by 20% compared with the previous three month period, but fell by 19% when compared with the same three month period a year earlier. Public housing and housing association orders fell by 16% in the 12 months to June 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 Housing market news Halifax house price index The Halifax house price index reported this week that: House prices increased by 1.1% in July. This was the second increase in the last three months and the third in the first seven months of 2009 Prices in the three months to July compared to the previous three months – an indicator of the underlying trend - were 0.8% higher. This slight increase was the first rise on this quarterly basis since October 2007 Prices fell by 0.8% over the first seven months of 2009. The average house price in July was £159,623 compared to £160,861 in December 2008 House prices in July were 12.1% 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) improved for the third consecutive month and has eased from -17.7% in April The house price to earnings ratio – a key affordability measure - has declined from a peak of 5.84 in July 2007 to an estimated 4.36 in July 2009. The long-term average is 4.0 Commenting, Martin Ellis, Housing Economist, said: "There was a 1.1% increase in the average UK house price in July. This was the second rise in the past three months and prices in the three months to July were 0.8% higher than in the previous three months. So far this year, house prices have fallen by less than 1%. “Demand for homes has risen, albeit from a very low base, since the start of the year, driven by improvements in affordability and low interest rates. Higher demand has combined with the low levels of property available for sale to boost sales activity from exceptionally low levels and support prices over the past few months.” Read more to top RICS: Outlook improving but housing market not out of the woods yet House prices look set to end the year higher than they started, but will still face significant challenges during 2010, says the RICS housing market update, released this week. Following a considerable shift in sentiment in the housing market over the past few months (which has seen prices starting to pick-up in some areas), RICS no longer expects house prices to fall by 10% in 2009, as predicted at the start of the year. Instead, it now looks likely that the average house price in 2009 Q4 could be slightly higher than in 2008 Q4. However this does not indicate a quick return to the boom time, as activity remains very weak by historical standards. Mortgage approvals have gradually improved recently in line with the increase in new buyer enquiries, documented in RICS housing market survey, and this relationship suggests that demand is strong enough to push approvals up to around 55,000 per month, where they could stay through to the end of the year. This would still leave transaction levels well below the long-run average as a significant increase in approvals is still being hampered, at least in part, by the limited availability of mortgage finance. A return to a more orderly market is still some way off. The RICS housing market survey shows that the new instructions balance has been in negative territory for 26 consecutive months, and this lack of supply has been giving some support to house prices in recent months. In addition, while buyer demand has improved, further increases in mortgage rates, rising unemployment or prolonged weakness in the economy could all challenge the emerging recovery in the market. Meanwhile the lack of new house building, which was already a major cause for alarm, has been exacerbated by the recession – housing completions in England could come in at around 75,000 this year. Failing to address this issue will add significantly to affordability pressures in the future. Commenting, RICS Senior Economist Brigid O’Leary said: “There has been a clear change in the housing market over the past few months and, as a result, it is unlikely that we will now see the kind of house price falls widely predicted at the start of the year. Instead, the return of buyer demand and the limited availability of housing on the market could be enough to support prices so it wouldn’t be surprising to actually see prices increase further from here in the short term. That would be consistent with more positive expectations that have been reported in recent RICS housing market surveys.” Read more to top NHF: House prices to 'rise by 20% by 2014' The average house price in England will rise 20% to £227,800 in 2014 despite substantial falls in 2009 and 2010 – according to a new forecast published this week by the National Housing Federation. According to the research, house prices will fall by 12.2% this year and fall a further 4.6% next year before stabilising in 2011 with a 1.1% rise. House prices will then increase by: 7.5% in 2012 8.4% in 2013, and 6.8% in 2014 – with the average price at the end of the period being £38,000 higher than the forecast average of £189,800 for 2009. According to independent economists Oxford Economics, who produced the figures for the NHF: House prices in England in 2013 will be 3% below their pre-credit crunch peak of 2007, but by 2014 they will be 3% higher An average price property in London purchased in 2008 for £331,500 will drop to £268,600 in 2010, before rising to £354,900 by 2014 The average East Midlands home will be worth less in 2014 at £165,300 than it was in 2007 at £172,500 Read more to top Economic news Bank of England maintains Bank Rate at 0.5% and increases size of asset purchase programme by £50bn The Bank of England’s Monetary Policy Committee voted this week 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 £50bn to £175bn. 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. In the light of that outlook, the Committee also agreed that it should extend its programme of purchases of Government and corporate debt to a total of £175bn, financed by the issuance of central bank reserves. The Committee expects the announced programme to take another three months to complete. The scale of the programme will be kept under review. The Committee noted that the increase in the scale of the programme would necessitate an increase in the range of maturities of Government debt that the Bank was willing to purchase. Read more to top Analysis of bank and building society deposits from and lending to UK residents The Bank of England released its analysis of bank and building society deposits from and to UK residents in the second quarter of 2009. The key findings included: Deposits from other financial corporations (OFCs) increased by £14.0bn in Q2, following an increase of £50.2bn in Q1 The Q2 increase in OFC deposits was more than accounted for by other financial intermediaries (+£16.5bn) and other auxiliary activities (+£6.5bn) Securities dealers (-£7.5bn) and mortgage & housing credit corporations (-£7.4bn) reduced their deposits Deposits from non-financial corporations (NFCs) rose by £12.5bn, mainly reflecting increases in public administration & defence (+£7.3bn) and legal, accountancy, consultancy & other business activities (+£2.9bn) Lending to OFCs rose by £2.0bn in Q2 - the rise in foreign currency lending more than offset the decline in sterling lending The all currency rise reflected increased lending to other financial intermediaries (+£11.3bn) and bank holding companies (+£4.9bn), partly offset by declines in lending to mortgage & housing credit corporations (-£4.7bn) and insurance companies & pension funds (-£2.9bn) Lending to NFCs fell by £14.7bn, due to decreases in: wholesale & retail (-£6.3bn); manufacturing (-£4.5bn); legal, accountancy, consultancy & other business activities (-£2.7bn), and construction (-£2.1bn) Read more to top Government and political news Housing Minister announces £30m transport funding for new housing schemes Housing Minister John Healey and Transport Minister Sadiq Khan have announced £30m for transport projects to support the thousands of extra homes being built across the country over the coming months. Money from the Community Infrastructure Fund (CIF) will help fund crucial transport links to support the building of extra homes for first time buyers, families and people on waiting lists. This strengthens commitments set out in the Prime Minister's Building Britain's Future plans, and the £1.5bn Housing Pledge that John Healey announced earlier this month, to build an additional 20,000 new affordable energy efficient homes over the next two years - and a further 10,000 homes for open market sale through the private sector. Building work is due to start in the coming months and is part of the pledge to use the power of Government investment to keep projects going as we steer our way through the recession. John Healey commented: "We need to ensure that people and families living in new homes have the transport links they need, whether this is a new road, new bus links or cycle paths. "This £30m boost for councils places them at the centre of supporting homes, jobs and growth, which is good news for the local area. "We are working closely with councils, The Homes and Communities Agency and the Department for Transport to ensure these projects are delivered in time. This work will also create construction jobs, help build new homes we need and make sure we have the transport in place to support development." Read more to top Mayor of London “fights back door raid on housing budget” The Mayor of London Boris Johnson has pledged to step in and plug a funding gap after, he said, “the Government reneged” on promises to fund homes in the capital. The Mayor believes the Government is ignoring London’s acute need for more new homes by cutting its share of the affordable housing budget and diverting funds to the regions with comparatively less need to meet national short-term build targets. In particular, north east England sees its share of the budget double, when it only has 300 households living in temporary accommodation, compared to 48,000 households in London. In a letter to John Healey, Minister of State for Communities and Local Government, the Mayor expressed concern that the funding being diverted to other regions is largely being paid for by raiding budgets set aside to upgrade over 100,000 of London’s poorest quality social homes. The Government is reneging on promises to around a quarter of a million of London's poorest tenants by delaying improvement to their homes. The Mayor has instructed the London Homes and Communities Agency to ensure funding is made available, over the next year, so that these properties can be improved to meet national minimum standards. Read more to top Events New Homes Week’ 2009. JUST FIVE WEEKS TO GO - ARE YOU READY?? Have you; Made sure ALL the relevant people in your organisation are aware of NHW? Completed and returned your site pack registration form? Signed up for the FREE new-homes.co.uk search engine web site? Started organising your ‘New Homes Week’ events? Contacted your local newspaper about your events? Industry preparations are now well underway for September’s ‘New Homes Week’ with many member companies building their Autumn marketing campaigns around it. All member companies now need to ensure they are fully geared up for the Week if they are to reap the benefits of what will be a high profile promotion for the new homes industry. Representatives from almost all HBF member organisations are now signed up, though in some cases it seems that whilst some regions of the company are engaged, managers from another area or division are unaware of developments. With ‘New Homes Week’ now less than six weeks away, members need to ensure all the relevant employees in their organisation are engaged. For more information, and to register to receive updates about ‘New Homes Week’, contact nhw2009@hbf.co.uk or visit www.nhw2009. co.uk to top The Housebuilding Innovation Awards – 5th November – book your table now!! Bookings are now being taken for tables at the prestigious HBF/Housebuilder magazine Housebuilding Innovation Awards. The shortlist for the Awards was unveiled earlier this month, and reveals the outstanding innovative achievements the industry has made in the past year. Click here for full details The Awards, which are supported by the Government, have become among the most sought after in the industry as they recognise excellence in innovation in all aspects of the housebuilding business. The culmination of the Awards is the announcement of the housebuilding firms deemed to be the overall Innovators of the Year –previous winners have included Redrow, Barratt, Explore Living and Midas. The winners will be announced at a glittering black tie awards ceremony on Thursday 5th November at the Millennium London Mayfair Hotel. For further information please contact the events team on 020 7960 1646 or visit www.house-builder.co.uk to top The What House? Awards – Grosvenor House Hotel 20th November The What House? Awards, in their 28th year, are among the most prestigious and longest established in the new homes industry and all house builders, large and small, are invited to enter. Deadline: 31st July. "Winning a What House? Award will prove an even greater achievement in such a severe economic downturn, showing sustained quality of product, despite market conditions and widespread industry redundancies. It is time to crawl from the wreckage and shout about your new homes and re-engage returning buyers with your brand. An Award is a fantastic sales and marketing opportunity for companies to tell the public they build the best new homes in Britain," said Rupert Bates, Editorial Director of the What House? Awards and Show House magazine. The Awards reward housebuilders and developers across 23 categories. There are four new Housing Association categories this year, recognising the hugely important role the sector has in kick-starting the market by delivering thousands of affordable homes through various initiatives. The Awards will be presented at a gala luncheon at the Grosvenor House Hotel, London on Friday 20th November. For ticket information please contact Derek Smith (ds@globespanmedia.com or 020 7002 8300). Please click here to download entry forms and a prospectus. to top HBF Annual Planning Conference 2009 – Staverton Park, Daventry Planning viability 15th September 2009 In the current economic crisis much has been discussed about fiscal policy and incentives but what of planning policy in these challenging times? Is it business as usual or is the current model broken? The 2009 HBF Planning conference will seek to address this and more. Click here for booking details or contact kellie.kent@house-builder.co.uk. to top Housing Market Intelligence Conference – Housing Minister confirms. Savoy Place, London -Tuesday 13th October 2009 Housing Minister John Healey has now been confirmed as a speaker for October’s HMI Conference completing a heavy weight line up of expert speakers for the industry’s leading annual policy conference. Confirmed speakers now include: John Healey MP, Housing Minister Grant Shapps MP, Shadow Housing Minister Sir Bob Kerslake, Homes & Communities Agency Stewart Baseley, HBF Michael Coogan, Council of Mortgage Lenders John Stewart, HBF Imtiaz Farookhi, NHBC A booking form will shortly be available but for further information please contact the events team on 020 7960 1646 or visit www.house-builder.co.uk 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
