Party conference season heralds the end of the so called summer political lull. I say "so called" because we have been busy providing data and evidence to the OFT inquiry, as well as continuing discussions with John Callcutt prior to publication of his report, anticipated later in the Autumn. We have also been engaging with Government and other sectors of the property industry in an attempt to dissuade the Treasury from introducing PGS in the Pre-Budget Report, expected in the next few days. We are also continuing to argue that providing a national framework is the best way of achieving zero carbon homes by 2016. Some local authorities are persisting to argue they can go further and faster, including the Welsh Assembly Government. We continue to engage CLG to ensure the national framework is maintained, highlighting the risk to housing supply if too onerous burdens are placed on you, the people charged with delivering this very ambitious target, as well as increasing housing numbers in a planning system that all too often fails to deliver sufficient land with implementable planning permissions. As rumours gather momentum by the hour of an autumn election, whether it happens or not housing will remain high up the political agenda and we will continue to work hard for your interests. External Affairs Political developments The Conservative Party's Quality of Life Group, chaired by John Gummer and Zac Goldsmith, was the first major political announcement post-Green Paper. Proposals include: outcome-based national building standards applied by licensed approved inspectors rather than the current Building Regulations; new national planning criteria based on the concept of sustainable "smart growth"; and planning process reforms to increase efficiency. However, the issue of land supply remains essentially unresolved in the Party's thinking. I have also initiated discussions with the new Conservative Shadow Housing Minister, Grant Shapps. He attended the Metropole Group in September, and I will be continuing this dialogue throughout the Autumn. Health and Safety On 17 September I took part in the Construction Forum convened by Work and Pensions Secretary Peter Hain to discuss the increase in the number of fatalities recorded by the Health and Safety Executive in housebuilding and repair and maintenance for 2006/07. The Forum - which also included other trade bodies, NHBC, Construction Skills and the Trades Unions - was not introspective and sought practical ways to reduces deaths and accidents on site. The need for partnership and leadership was stressed, supported by improved data on accidents and recognition of the importance of ensuring the competence of all those working on site. As a result of the summit I have been invited to join a Task Force under the stewardship of John Spanswick who has been asked to progress the ideas discussed at the forum and report back to Ministers by the end of the year One consequence for us is the need to redouble the efforts already being made to achieve a CSCS carded workforce on Major Home Builder Group sites, and to extend this initiative to others. I will keep you in touch with developments in this process. New Homes Marketing Board The strengthened New Homes Marketing Board, now Chaired by David Pretty, has now met and agreed a public relations programme for the next six months. The first initiative, launched this week, is based on YouGov opinion polling demonstrating the importance of, and public views of, action to assist first-time buyers. The press release, opinion poll results and supporting factsheet and case study material can be viewed on the website: http://www.new-homes.co.uk/press_centre/campaigns.htm We are also planning an advertising campaign in the New Year, to promote the major contribution the industry is making to many important community objectives through Section 106 contributions etc. Zero carbon Homes Ministers have recently formally announced the 2016 Commitment, with a further Task Force meeting scheduled for October. Energy supply issues are likely to be a priority, and I am pleased that we will be deepening our dialogue with energy companies through contact with the UK Business Council for Sustainable Energy and its members. HBF is also engaging in discussions with various stakeholders regarding practical ways of reaching Code Levels 3 and 4. There is concern that work on amending the SAP software should start soon, in order that the proposed revision to Part L of the Building Regulations in 2010 can be implemented in a co-ordinated and coherent way. I will naturally keep you informed of our progress. Economic affairs Housing trends Results from HBF's monthly survey, published in Housing Market Report, suggest new home demand is weakening, in line with results from the RICS survey and other market indicators. The recent turmoil in the financial markets may damage consumer confidence and lead to some tightening in lending criteria and higher rates for some borrowers. However the MPC will be watching consumer trends very carefully, including housing market trends. The Bank of England regards HBF's survey evidence as a valuable early indicator of housing market trends. There is no longer any talk of a further Bank Rate increase. Indeed, a cut is now expected before the end of the year. On the new homes front, official CLG figures show a 9% year-on-year decline in private housing starts in England in the first half of 2007, with a 9.6% decline in total housing starts. These figures raised considerable media interest, leading to several radio interviews with HBF staff. Ministers watch these figures very closely, so the downward trend will have caused some concern. By contrast with starts, private completions in England in the first half of 2007 were up 8.9%, with total completions up 9.2%. There are several explanations for the decline in starts: the strength of starts in early 2006 which exaggerates the scale of the year-on-year decline this year; the market; a mix shift away from apartments towards attached housing, and declining sales outlets, a consequence of falling planning permissions. I believe the decline in sales outlets is the primary cause. Unfortunately, the fall in starts will feed through into a decline in completions in 9 to 12 months. Planning-gain Supplement (PGS) Following the Prime Minister's challenge to industry to come up with a workable and better alternative to the PGS before the Pre-Budget Report in October, HBF has been working closely with members, and with non-residential developers and their representatives, to devise an alternative which meets house builders' best interests and the Government's objectives. We have held and attended a series of meetings with the housing minister Yvette Cooper, Treasury and CLG officials, HBF members, commercial developers, planning consultants, lawyers, etc. One thing is clear - PGS will be introduced unless the Treasury can be persuaded that one of the four alternatives they published in the Housing Green Paper will work better than PGS and raise more money than the existing Section 106 regime. It is clear from our discussions that officials and Ministers will take some persuading to abandon the PGS, and that maintaining the existing Section 106 arrangements is not an option. On Tuesday of this week we finally agreed a tariff-based approach with our commercial colleagues and submitted our proposal to Treasury officials, the Chancellor and the Housing Minister. We will now have to wait for the Pre-Budget Report to see whether a unique industry coalition has persuaded the Government to abandon the PGS in favour of our alternative proposal. I firmly believe that we stood the best chance of achieving a positive outcome if the house building and property industry spoke with one voice on this subject, although I fully accept there are no easy answers to an issue which has been scrutinised for many years. OFT Market Study HBF was asked by the OFT to respond to a lengthy questionnaire covering Warranties, Building Regulations, Planning and Competition, and Consumer Affairs. Our submission in two parts, both of which were circulated to the HBF Board and several committees for comment in draft before being finalised, is available on the member section of the HBF web site www.hbf.co.uk/OFT-Housebuilding-Market-Study-860bc8e Customer satisfaction issues As part of our ongoing Customer Satisfaction strategy we are working with the Council of Mortgage Lenders on an addition to our Code of Conduct, to cover concerns some lenders have regarding disclosure of discounts and incentives. We hope to be in a position to introduce this amendment later this Autumn. Additionally we are working with NHBC, CML and others on evolving our Code of Conduct into a fully OFT compliant code. Discussions are progressing well and we anticipate being able to say more about this early in 2008. Planning Planning White Paper The summer's plethora of Government consultations was headed by the Planning White Paper. It was accompanied by a handful of other proposals for changes to the planning appeals system, planning fees, planning performance agreements and permitted development rights for householders. Many thanks to all of you who contributed to the HBF responses to the consultations either through national committees, regional meetings or just by picking up the phone. Collating the whole spectrum of views from members on these important issues is vital so that we can come to a balanced and informed decision on how to best represent your interests. All of the submitted responses can be viewed via the HBF website on www.hbf.co.uk/National-Planning-997c36d PPS1 Supplement on Climate Change Despite press reports that the government is to do a u-turn on the planning rules surrounding the incorporation of renewables into new housing, both CLG Ministers and officials have denied that this is to be the case. HBF is a member of the CLG steering group regarding the emerging policy document and is encouraging the Government to examine and test on-site technology through the development process. We have made clear our concerns about 'back-door' regulations, through supplementary planning documents, mainly through the provision of empirical data from HBF members. The requirement for testing through the development plan process is quite clearly stated already in PPS22 on energy, and we believe that the climate change PPS will reiterate this point. We continue to stress the need for a coordinated and consistent approach towards the 2016 target of zero carbon homes rather than a "greener than thou" competition between local authorities. We know we have the Minister's support through her involvement and commitment to the 2016 taskforce, and we will be pleased to continue to present evidence of unilateral policy adoption by LPAs supplied by you, our members. Publication is expected in early October, ahead of the original plan for the end of the year. Validation of planning applications Despite all of our efforts to persuade Ministers otherwise, it seems that the government are intent on introducing a more complex process for the validation of planning applications in April of next year. Advance notice of the proposed changes was published in August in a document entitled "The Validation of Planning Applications: Draft guidance for local planning authorities". Due to come into force on 6th April 2008 the new process will allow Local Planning Authorities to consult on and adopt their own local list for information which must be submitted with a planning application, without which the application will not be valid. These requirements will be additional to the national requirements for applications that are currently in place. Local lists can only draw from a menu of requirements as prescribed in the guidance document. These 30 requirements are, essentially, assessments of environmental factors such as noise, flood risk and biodiversity but include other, more technical appraisals such as waste management strategies and utility statements. Not all types of application should require all types of additional information although it is up to each local authority to define what information will be required for which type of application. Local lists must be consulted upon and, when adopted, must be published on both the LPA website and the planning portal, following which they become mandatory requirements. We are continuing to discuss this issue with CLG officials and Ministers in order to clarify a number of apparent anomalies within the process but it is clear that they are intent on increasing the amount of information to be submitted with a planning application, albeit limited to that contained in the nationally prescribed menu. South East Plan Panel report The publication of the Panel's report on the South East Plan, the Regional Spatial Strategy for the South East of England, proved most disappointing. Despite acknowledging evidence pointing to a need for a large increase in housing provision for the region from the 28,900 additional dwellings per year proposed by the South East Regional Assembly, the Panel inexplicably recommended an increase of just 10% to 32,000 dwellings per annum. HBF had argued for a minimum provision of 36,000 dwellings while others had presented evidence that concluded that the figure should be even higher than that. The next stage of the RSS process is the Secretary of State's proposed modifications to the plan. We know from statements from the Minister that the Green Paper's new targets were not taken into account, and our lobbying for a greater increase in housing provision will continue. In many ways this will be a litmus test for the Government if they are serious about achieving their increased housing targets. Technical issues Building Regulations The formal consultation on proposals to amend the Building Regulations is expected later this year, although no specific date has yet been given. Code for Sustainable Homes HBF is setting up a working party to agree the industry response to the consultation on making a Code rating mandatory. The primary suggestion for discussion is that a developer would be required to produce a standard letter or certificate stating the property is not Code assessed. Our concern centres around proposals to amend the Code at intervals, notably to require Lifetime Homes standards at different levels over time. Our view is that the most practical route to zero carbon is via Building Regulations and amending the Code in the interim will make this difficult. Code for Sustainable Homes - Technical Guidance Members have found several anomalies within this guidance, and HBF has been talking to the BRE to try and resolve these issues. HBF has also had discussions with CLG, and it had been agreed that HBF will hold quarterly meetings with CLG and BRE to try and address any further problems which are uncovered. We have asked members join this group and would welcome any other volunteers. HIPs/EPCs HIPs have now been enforced for three and four bedroom properties. The current situation with EPCs is that from January next year they will be required on all newly completed dwellings. A great deal of confusion still exists around which properties will need EPCs and when, so as soon as any clarification arises I will pass it on. Innovate for Homes The third Housebuilder Panel met this year on 11 September. New pages have been launched on the website, through which members can follow links to all the products featured http://www.hbf.co.uk/About-Innovate-for-Homes-92189b8 Utilities Under a recent Modification Proposal UU are suggesting that they would introduce payments for the adoption of connection assets. This is extremely good news and we look forward to other companies offering similar incentives. HB07 - 9/10 October We will all be gathering on the 9 and 10 of October for the housebuilding 2007 exhibition in Islington, London. This year, the HBF stand (no. G9) will feature live interviews and 'ask the expert' sessions with members of the senior management team, who will be available on the stand during the course of the show to answer any queries you may have. We look forward to seeing you there. For full details of what is happening on the HBF stand visit the website: http://www.hbf.co.uk/index.php?id=1677 In the meantime, please do not hesitate to get in touch with me or the senior management team here at St James's Street if we can help further.
