2007 has proved to be another busy and challenging year for us all. The past twelve months have seen a new Planning White Paper, a Housing Green Paper, an Energy White Paper, plans unveiled for the New homes and Communities Agency which will open for business in April 2009, the review of Building Regulations, the debate on the Planning-gain Supplement now replaced by the Community Infrastructure Levy, the launch of the OFT Market Study and, most recently, the publication of the Callcutt Review. No one can be in any doubt that housing is at the very top of the Government’s agenda and, as ever, the above list contains a mixed bag of issues and outcomes for the industry. As we reflect on the past year and look ahead to 2008 some very clear challenges lie ahead. On PGS, by way of example, we may have won the battle to persuade the Government to drop the idea and replace it with our preferred option of a Planning Charge, but much remains to be done to ensure the detail of this actually works. Similarly with the ambitious target of zero carbon housing by 2016, we need to keep working hard to persuade government that the free-for-all approach being adopted by far too many local authorities will hinder rather than assist delivery. We have been lobbying hard on the PPS on Climate Change expected anytime now on this point. Most importantly, particularly as we enter more difficult economic conditions, we need to ensure Government understands that home builders are not in business to deliver Government social policy, but to meet the expectations of their shareholders and that the increasing cost of regulation and inflexibility of the planning system threaten the deliverability of more homes. Unquestionably however, if we are to meet either shareholders’ or the Government’s expectations, and potentially align them, we need to see more land being granted planning permission. As ever that will remain the acid test by which we will judge the success or otherwise of Government policy. Key news Callcutt Review John has now published the report of his Review. I hope HBF members all received a copy of HBF’s briefing note. We also held a very successful briefing meeting for HBF members at which John presented his findings and answered questions from over 60 representatives. Most of the Review’s recommendations will be welcomed by home builders as will his conclusion that given sufficient land the industry has the capacity to meet the Governments objectives on volume, quality, environmental performance and affordability. If John’s big idea for local authority/house builder “mature partnerships” to regenerate low-value urban areas can be put into practice, it should offer major new development opportunities for the industry. The report contains 37 recommendations, some of which could be implemented quite quickly, whereas others will take time to implement. We will be seeking to work with CLG and others to ensure the industry benefits from the Review’s conclusions. Disappointingly John recommends that the Customer Satisfaction Survey, which we instigated in response to the Barker Review, should in future be commissioned and funded by Government and run independently of any industry interest. We intend to strongly defend our position on this as we believe we already have the most comprehensive, statistically robust, independently audited survey. Community Infrastructure Levy (CIL) As reported last month, the development industry has persuaded the Government to move towards a statutory planning charge rather than a Planning-gain Supplement to help support infrastructure needs by tapping uplift in land values. Announced as part of the Planning Bill this new charge will now be known as the Community Infrastructure Levy. The clauses in the Bill are enabling, however, leaving the detail of the charge to be determined by the regulations and guidance. To that end HBF is working with CLG and others as part of a Policy group discussing the details of the new Levy. In order to ensure that we reflect HBF members’ views and requirements we have established an HBF action group of members to discuss the details for the Levy and we continue to use the National Planning Committee as a sounding board for the group’s proposals. I will also keep members up to date both in this monthly bulletin and via regular briefings and meetings. If you require any additional information please contact either John Stewart or Andrew Whitaker who are the HBF contacts on the CLG Policy Group. Climate change policy The political focus on climate change is unabated. In recent days we have seen a report from the Local Government Association Climate Change Commission on local action and a “green paper” from the Conservatives on promoting new forms of low carbon decentralised energy supply. The LGA report recommends that councils take a more pro-active approach to tackling climate change through their planning and other policies as well as encouraging renewable energy supply. The Conservatives’ paper proposes the creation of a guaranteed “feed-in” tariff to provide the financial support that would encourage low or zero carbon forms of local or householder electricity generation by reducing the up-front costs. These are interesting proposals, and we will be engaging with the Conservatives and other bodies to ensure that methods of reaching zero carbon are as business-friendly as possible. The Planning Policy Statement on climate change is still expected to be published before the end of the year although this may be affected by a private member bill on the Merton Rule (see below). 2016 Task Force John Callcutt’s review proposed that the 2016 Task Force should be assisted by its own delivery body. I strongly support the need for such support on this most challenging set of issues and having been pressing CLG on this for some time. Yvette Cooper has asked Paul King, Chief Executive of the UK Green Building Council, to consider the form and role of such a body and the Task Force is due to meet again just before Christmas to consider his ideas. Separately the Green Building Council has set up a group chaired by Mark Clare of Barratt to look at the definition of zero carbon, taking into account the practicalities involved. Merton rule Bill Conservative MP Michael Fallon, who came top of the annual ballot for Private Members’ Bills, has announced that he will introduce a Bill providing for the application of the Merton rule. The details of the Bill have not yet been published, but clearly this is a proposal to which we will need to devote close attention in the New Year. Energy supply for zero carbon homes I was accompanied by Mark Clare of Barratt, Malcolm Harris of Bovis and Peter Redfern of Taylor Wimpey in joining energy suppliers from the UK Business Council for Sustainable Energy (UKBCSE) for a meeting with Housing Minister Yvette Cooper to discuss energy supply issues relating to zero carbon. The two industries stated that given current technical and commercial uncertainties their shared wish was for a flexible approach to the provision of the new low and zero carbon energy supplies. The Minister made clear that suitable assurance about the additionality of new decarbonised energy supply for zero carbon homes was important. It was agreed that HBF and UKBCSE would prepare joint proposals on how they saw such additional energy supply capacity being realised with a view to a further meeting with the Minister in the New Year. Economic affairs Office of Fair Trading Market Study As part of its Market Study, the OFT has now despatched survey questionnaires to 7,000 home builders. All home builders with a turnover in excess of £5.6 million are being surveyed, along with a sample of smaller firms. HBF and a number of large home builders were asked to comment on a draft of the questionnaire before it was sent out. A copy is available on the HBF web site. The house builder questionnaire covers warranties, building control, consumer issues and competition and planning, with three additional planning questions for the National Audit Office (NAO). The OFT has now completed its consumer study involving 1,000 face-to-face interviews with a cross section of new home buyers in the last two years. This examined owners’ experiences of purchasing and living in their new home, how satisfied they were with the quality and range of properties available and the adequacy of redress if something went wrong. OFT Code of Conduct In anticipation of the OFT Market Study findings, HBF, NHBC and the CML have been considering how the industry might set up a fully OFT compliant Code of Conduct. This is at an early stage, so I am not yet in a position to circulate material to HBF members. However we will provide you with further details early in the New Year. At present HBF has a voluntary Code. Government Meetings / Political Contacts During November HBF, along with senior industry executives, held meetings with senior Treasury and Bank of England officials. Discussions looked specifically at the housing market and housing supply from the industry’s point of view. A few days ago, I also met policy advisers at No 10 and covered similar ground. In addition, HBF External Affairs Director John Slaughter has held a series of meetings with MPs on housing issues. Housing is the number one constituency issue for many politicians, and we are using the current housing legislation to increase our contact with MPs as well as communicating the importance of housing supply on the national scale. Separately we have also held discussions with the Conservative front bench team on our position on planning issues, including the new Planning Bill. Malcolm Harris of Bovis kindly represented the industry at the beginning of December to give evidence to the All Party Urban Development Group’s inquiry on housing delivery. Home Building Trends Private housing starts in England in the first three quarters of 2007 were down 4.4% on the same period last year, with a 9.0% decline in RSL starts, according to the latest statistics released recently by CLG. Over the same period, total housing completions in England were up 6.7%. The decline in starts so far this year seems likely to lead to a decline in completions next year. While this has caused considerable concern within Government, a short-term dip should not have any significant impact on the industry’s ability to hit the 2016 target, providing the necessary land with implementable consents is released. Planning affairs Planning Bill The Planning Bill was presented to the House of Commons on 27 November 2007. The majority of the Bill is taken up by the proposals to establish an Infrastructure Planning Commission to examine and determine applications for major infrastructure projects. However, the Bill also includes provisions of more relevance to the housebuilding industry, not least the establishment of the Community Infrastructure Levy mentioned above. Other proposed changes to the planning system include amendments to the local development document process in an attempt to help local authorities produce development plans and changes to the appeals process. The changes to the appeals process include plans to introduce charges for planning appeals and allowing the inspectorate to impose the method of hearing an appeal. While the latter is of concern to us it is unlikely that an appellant with a real need or desire to proceed to a full public inquiry will be denied that opportunity (especially where very technical evidence needs to be examined). We are aware that there are associated changes to the costs regime proposed outside of the Bill that will allow costs to be granted on all appeals regardless of the method of determination. This will avoid the need to hold a public inquiry merely because of a desire to apply for costs to be granted. The charging for appeals is more contentious and I will be canvassing members opinions on this point in order that we can reflect the industry’s views through the Bill’s progression. The proposed changes to the development plan system is a recognition by the government that there is now a major problem regarding the lack of progress on the adoption of local authorities’ core strategies and other development plans. This problem is now starting to affect the supply of land for housing as new allocations of land are not coming forward through the development plan process. CLG have also published a consultation paper regarding the proposed changes to the development plan system. To some extent this problem is already starting to be addressed through the requirement for identified 5 year housing land supply as required by PPS3. However, a recent study by CLG showed just 25% of local authorities had a published land supply and I believe that very few of these have been discussed or agreed with the private sector as to their robustness. Such poor performance does, however, present opportunities and, as suggested by CLG officials, we are advising members to take appeals in local authority areas where there is no demonstrable 5 year housing land supply. For its part, as I reported last month, CLG is proposing to alter fiscal incentives to reward local authorities who achieve both adopted plans and 5 year housing land supplies through the Housing and Planning Delivery Grant. A few days ago, I also met policy advisers at No 10 to discuss these newly focussed incentives. HBF will, of course, continue to follow and lobby on the next stages of the Bill, and keep you updated of progress. Housing and Regeneration Bill The second reading of this Bill, setting out the establishment of the new Homes and Communities Agency took place on the 27 November 2007. Officials tasked with taking the legislation through the system, Phillip Cox and Steve Douglas, are briefing a group of HBF members on 19 December as to the details of the Bill and the objectives of the new Agency. If you wish to join the briefing group, please contact Andrew Whitaker, HBF Head of Planning. Technical issues Strategy for Sustainable Construction HBF has responded to BERR’s consultation on Strategy for Sustainable Construction, emphasising the 2010, 2013 and 2016 targets that the house building industry is already signed up to and suggesting that other sectors of the economy should match these. We also reiterated that we had submitted proposals to improve waste management and encourage recycling, though we expressed reservations about setting a target of zero waste to landfill in the foreseeable future. We also stressed the efforts that we were making to reduce accidents on site and to improve occupational health. Code for Sustainable Homes CLG has published the responses to the consultation on the Future of the Code: Making a Rating Mandatory. In the document the department states that a rating will be mandatory, probably from April 2008. A zero-star certificate will be required at design and completion stage and will form part of the Home Information Packs documents. The transition arrangements relate to the deposit of Building Regulation applications after April 2008. They will amend the Code to reflect changes to other legislation, notably after the new Part L in 2010 and Lifetime Homes Standards will be mandatory at Code Level 6 (remaining an optional element at lower levels) from April 2008. Code for Sustainable Homes – technical guidance The first of what will be regular meetings took place with CLG and other bodies to discuss the difficulties with the technical guidance surrounding the Code for Sustainable Homes. It is likely that these will be addressed by the proposed change to Part L in 2010. Home Information Packs/Energy Performance Certificates Last month the date for all new housing to need an EPC on completion was deferred from 1 January 2008 until 6 April 2008. Taking this into account, the latest advice from Government is that developers will not require a HIP for homes built to 2006 Part L until the revised date. I realise that this is somewhat confusing as earlier statements implied that developers would supply a HIP with a Predictive Energy Assessment (PEA) and we are seeking clarity from CLG to ensure that other stakeholders are fully aware of the situation. Water The proposed amendments to Part G (Hygiene) are being considered and in addition to the thermostatic control valves on bath and sink taps and other safety measures, we are expecting that there will be a requirement for homes to be designed for 125 litres per person per day water usage. It is expected that the amendment will be published in the Spring. Ofwat has asked HBF to send a “wish list” of what the industry believes they could do to improve the provision of water and sewerage to new developments and we are currently compiling this with the help of members. Proposed EU Soil Directive There have been considerable amendments to the proposals since the publication of the Defra consultation. HBF and others have met the MEP who is the rapporteur for this proposal to clarify the issues. FINALLY, I would like to take this opportunity to wish you and your colleagues a happy Christmas and successful, healthy and prosperous New Year. We will not be sending traditional Christmas cards this year, but instead we will be making a donation to the housing charity Habitat for Humanity. Please note that HBF offices around the country will be closed from Monday 24 December 2007 and will reopen on Wednesday 2 January 2008. In view of the Christmas holidays, I will write again at the end of January.
