It has been another extraordinary month on the world’s financial markets. And whilst I don’t intend to recap all the tumultuous events you will be far too familiar with, it goes without saying that the continued uncertainty is having a significant effect on our industry. The seemingly endless stories of leading banks and other key financial institutions being bailed out by Governments on both sides of the Atlantic and the ongoing liquidity issues generally are having a clear impact on mortgage availability and consumer confidence in this country. It is also quite apparent that events have overshadowed the Government’s announcement in early September of a package of measures designed to help stimulate activity in the housing market. Last week it was announced that Margaret Beckett has replaced Caroline Flint as Housing Minister and I shall of course be pressing for an early meeting with her. We need to ensure that she fully understands the issues our industry currently faces, and what further action Government can take to assist housing delivery, both now and in the future. We will also continue to make the case for further action to assist the housing market to No 10, the Treasury and the Bank of England. I am very pleased that we have secured a meeting with Sir James Crosby who is carrying out a review of mortgage finance for the Chancellor, following my recent letter to the Chancellor. Away from economic issues, the other major developments this month were the publication by OFT of their market study into our industry which generally gave us a clean bill of health. As anticipated it confirmed the introduction of a cross-industry code of conduct and we will continue to play our part in the development of the code. The HSE also decided to publish a safety alert on the gas flues issue which we had previously made you aware of. Indeed prior to the HSE issuing their alert we had advised members of the actions that HBF recommended. We will continue to keep you informed. Further details of both the OFT report and gas flues issue are set out within the body of my report below. Gas flues A fatality at a new build block of flats in February this year has led to the HSE issuing a consumer alert about the dangers of heating systems with a boiler on an internal wall and an extended flue. We have already written to you all on this issue and further information is available on our web site please click here to view. Based on the recommendations of the Sub Group, and following consultation with both the Major Home Builders and Metropole Groups, HBF advised members that in future any gas boilers should be installed on or as close as possible to an outside wall with minimal flue length and jointing. Installations should be fully in accordance with manufacturers’ instructions, BS5440 and CORGI Technical Bulletin 200. It was also recommended that CORGI should be asked to check all stock properties and either confirm that they were satisfactory or that any faults had been remedied Pending further details from the HSE of what exactly caused the fatality earlier this year, it is suggested that all properties with long gas flues constructed since June 2007 should either be issued with carbon monoxide detectors or be inspected for compliance with TB200. Further measures may be recommended when the HSE’s final report is published. We are also proposing that boiler manufacturers and CORGI (and Capita which will replace CORGI from April next year) should ensure that all installers/ commissioners are fully trained and that HSE should require a Quality Assurance procedure from both CORGI and Capita. OFT market study Overall I was extremely pleased with the outcome of the OFT Market Study, and you have all already received a member briefing summarising the report. The OFT has demolished, hopefully once and for all, myths about landbanking and claims that house builders delay development of sites with planning permission. It concluded that the planning system restricts land supply. The OFT recognises that the increasing cost of regulation is potentially a barrier to housing delivery and that regulation also puts a brake on expansion by smaller house builders. The industry was cleared of any competition issues at both the national and local levels. And the OFT has called on the public sector to release more land, having concluded that it controls between a quarter and a third of all potential residential development land. All of these have been central HBF issues, so it is very encouraging to have support for our arguments from such an authoritative body. I would like to thank all those members who made representations to OFT on these issues. We will be working with NHBC and other warranty and trade bodies to put in place the code of conduct required by the OFT. As you will be aware from my previous updates, we are well on the way to developing a code that meets the industry’s and the OFT’s requirements. We have until March 2010 to get this fully operational. HomeBuy Direct HBF has been working with the Housing Corporation for several weeks on the details of the HomeBuy Direct scheme, announced in the Government’s September package of measures to assist the housing industry. The scheme, which was formally launched on 1 October, is open to bids from any home builder, regardless of size. The Corporation suggests bids would be “expected” for schemes in excess of 15 units, but we understand they may consider dwelling numbers a little below this threshold. HBF issued details of the scheme to all HBF members on 1 October. Guidance is also available on the Housing Corporation web site. EXTERNAL AFFAIRS Party conferences We again held discussions with a wide range of Ministers, MPs and Councillors at both the Labour and Conservative Party Conferences. At the Labour Conference John Slaughter met Housing Minister Caroline Flint, Chief Secretary to the Treasury Yvette Cooper and more than 10 MPs with an interest in housing issues. At the Conservative Conference Stewart Baseley and senior HBF members held a discussion with Shadow Housing Minister Grant Shapps on the Party’s future housing policy – on which a Green Paper is expected in the New Year. John Slaughter also met a number of MPs and prospective parliamentary candidates from key marginal seats. All these meetings were a good opportunity to brief politicians on current market issues and their implications as a basis for exploring possible action at both the national and local level. We will be following up on the suggestions made, including the scope for joint initiatives with some local authorities. Zero carbon and renewable energy The Government’s consultation on the definition of zero carbon is still awaited at the time of writing, although we are expecting it to be launched this autumn. Meanwhile there appears to be growing recognition by CLG of the limits of what can be achieved on the site by home builders. As a result the direction of future Government policy on renewable energy becomes increasingly important for the zero carbon agenda. We are talking to the key energy industry bodies on this issue and supporting their call for suitable incentives, including a feed-in tariff, for investment in new renewable energy supply. Employment status in construction We have participated in a Construction Employment Forum set up by HM Revenue and Customs (HMRC) at Ministers’ request to look into concerns about “false self-employment” in the construction industry. The talks follow pressure from the trade unions and backbench MPs that the Government should do more to ensure employment status is properly determined. The Forum has now completed its planned cycle of meetings. We have set out the industry position clearly, but it seems likely that HMRC will be considering options to improve compliance with current rules and collaboration with industry to this end. We will let you know of developments in this area. PLANNING AFFAIRS Planning Bill The Planning Bill passes to the House of Lords for discussion on 6, 8, 14 and 16 October. As well as the much talked about Independent Planning Commission (IPC) and the Community Infrastructure Levy (CIL) the Bill includes a number of proposed changes to other, perhaps more mundane, parts of the planning system. The two areas on which we continue to lobby are connected to the appeals process and both are matters of fundamental principle. The first is the proposal to allow the Planning Inspectorate (PINS) rather than the appellant to determine the type of appeal hearing (written representations, informal hearing or public inquiry). Although we acknowledge the fact that PINS will do little more than formalise their current informal guidance to applicants about the most appropriate type of appeal (on which they base their “encouragement” to appellants when submitting their appeal) and that it is highly unlikely that an applicant who wishes to follow a particular procedure will be unable to persuade PINS of their reasons, the principle of retaining the right to appear before an independent inspector is, we believe, one of the fundamental safeguards in the planning process. The second issue surrounds the proposal to pay a fee for planning appeals. Although there has been some talk of amending the costs regime to allow for easier claims and clearer criteria for evidence of unreasonable behaviour, once again we believe that the fundamental right of appeal within the planning process should be retained for all. It should be remembered that even when the Planning Bill is passed and becomes an Act the various sections still have to be subject to a commencement order from parliament. Thus whole new systems of process do not necessarily come into force on the passing of the Bill. Killian Pretty review The review team intends to publish its report in late October/ early November. It is understood that the recommendations will be focussed on four key areas of the planning application process: Formalising and integrating the pre application process for appropriate applications; Review of the recent changes to validation of planning applications and the increasing plethora of additional information required for all types of application; Reassessment of the crude 8/ 13 week determination targets in favour of a more responsive monitoring process focussing on customer satisfaction and outputs; Best use of resources including attitudes and respect within the process. The report will be submitted to Communities and Local Government and Business Enterprise and Regulatory Reform Ministers who will then need to formally respond to the recommendations, probably in spring 2009. HBF planning conference The HBF annual planning conference held in Oxford on 10 September had a star-studded cast headed by Richard McCarthy, Director General of CLG. Despite delegate numbers being lower than in previous years for obvious reasons, the fact that we are still able to attract high profile and very relevant speakers means that we will continue to run this event again next year. Our aim is simple: we must not allow the current market conditions to be used as an excuse to plan for failure. In fact we must do the reverse, continuing to plan for housing land release through the planning system in order that the market can respond quickly and effectively when the inevitable upturn arrives. Events such as the annual planning conference allows us and you, the membership, to have a direct input and dialogue with key decision makers, ensuring that we plan for the future, not for recession. TECHNICAL AFFAIRS Building Regulations The Industry Advisory Groups on Parts L and F have now submitted their conclusions, some of which will be included in the formal consultation which is now expected to be published early in 2009 (for implementation in 2010 and 2013). It is understood that work will start shortly on proposals to amend Parts A (Structure) and C (Protection from moisture and contaminants). There is no news yet on the response to the Future of Building Control consultation. S38 Agreements and commuted sums HBF’s working party (which now includes a legal representative) is looking at the intentions of the 1980 Act and also assessing the feasibility of the S37 route to adoption. Utilities Ofwat has confirmed that ‘Infrastructure Charges’ are payable on connection, not up front. Ofgem has also issued a consultation in relation to when fees can be charged. Lifetime Homes Work has started on assessing LHS with a view to making recommendations and HBF will be organising a meeting of its own sub group shortly. AND FINALLY... The seismic shifts currently being seen in the global financial markets, and the resultant lack of mortgage availability and damage to consumer confidence, dictate that the business environment remains a challenging one for us all. But there are still a wide range of issues on which discussions are continuing that will be critical to the industry when we emerge from the current downturn. As ever, we shall continue to strive to properly represent the key issues facing our industry to Government and other key policy makers. Please do not hesitate to contact me or any of the team here at HBF should you wish to follow up on any aspect of this report, or indeed raise any other matter.
