HBF Wales Weekly News Summary Friday 10 October 2008

Friday, 10 October 2008Top stories this weekBank of England reduces Bank Rate by 0.5% to 4.5%.....read more  Government package announced to support banking sector....read more

Halifax house price index.....read moreCLG sets out new proposals to tackle rural housing shortages.....read morePolitical reshuffles finalised.....read moreQuick LinksWales newsEconomic newsHousing market newsIndustry newsGovernment and political newsEventsWales newsWAG urged to back Council Mortgage Scheme

The Assembly Government is being urged to coordinate a scheme under which councils across Wales would stimulate the housing market by giving mortgages to first-time buyers.

Plaid Cymru MP Adam Price said such an initiative - which would be entirely lawful - could help would-be buyers circumvent the effective freeze on mortgage lending created by the credit crunch.

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The go ahead for a new, fast train service between North and South Wales has been announced by Deputy First Minister Ieuan Wyn Jones. The new return service between Holyhead and Cardiff is intended to be in operation from December 2008, and is expected to reduce existing train travel times between North and South Wales by at least 30 minutes.

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Wales is falling short of targets aimed at cutting its carbon emissions, new figures show.

The latest greenhouse gas inventory produced for the UK Government shows that the amount of climate-changing gases emitted in Wales actually rose by almost 2m tonnes from 2006 to 2007. Emissions of the main climate-changing gas, carbon dioxide, rose to 42.5m tonnes a year.

Despite the UK Government setting a target to cut carbon dioxide emissions by 20% between 1990 and 2010, emissions in Wales are less than 2% below the 1990 level. This compares to a reduction of over 6% for the UK as a whole.

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The Bank of England's Monetary Policy Committee voted at a special meeting this week to reduce the official Bank Rate paid on commercial bank reserves to 4.5%.

The minutes of the meeting will be published at 9.30am on Wednesday 22 October.

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A range of coordinated measures were announced this week by Government and the Bank of England in an attempt stabilise the financial system and boost the economy. 

A half percent cut in interest rates was announced by Gordon Brown on Wednesday as part of a plan of action by major economies.

This followed the announcement of a range of measures earlier that day to ensure the stability of the financial system and to protect ordinary savers, depositors, businesses and borrowers.

In summary the proposals announced this week are intended to:

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The HBF welcomed the coordinated Government and Bank of England action which should bring stability to the financial system and increase confidence in the banking sector.

Stewart Baseley, Executive Chairman of the HBF commented:

"The crisis in the world economy dictated that coordinated and decisive action was taken and we warmly welcome today's announcements. I hope that the Chancellor will ensure that banks now start to restore mortgage lending to more normal levels and that he continues to work closely with the Bank to assess if further rate cuts are needed to support the economy."

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The Council of Mortgage Lenders welcomed the action and believes the steps address both relevant issues - funding and capital - and provide both the short-term framework to enable banks to raise finance, and the longer term strengthening of their capital position that should help to re-instill confidence and stability. CML Director General Michael Coogan said:

"From what we can see so far, this seems to be a decisive, coordinated and reasonable package of measures that address both the relevant factors necessary to support a return to market stability. The flow of funding to support mortgage lending has been severely constrained, and these measures will help to create more positive conditions for the mortgage market."

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Senior HBF members accompanied by John Stewart and John Slaughter met Sir James Crosby this week as part of his review of mortgage finance. The group briefed Sir James on the state of the housing market, and particularly the new home sector, emphasising its importance to the wider economy. They underlined the critical need to improve the availability of mortgage finance to enable the industry to weather the downturn and safeguard capacity.

The Halifax monthly house price index, published this week, reported that house prices fell by 1.3% in September. This was the smallest monthly fall for seven months. The year on year figures showed a drop of 12.4%, calculated as an average for the three months to September, compared with the same period a year earlier.

Commenting, Martin Ellis, chief economist, said:

"House prices declined by 1.3% in September. The overall price decrease in the three months to September was very similar to that in the previous quarter, indicating that the trend rate of decline may be beginning to stabilise."

"The ongoing pressures on householders' income, combined with the reduction in the availability of mortgage finance, however, mean that market conditions will remain challenging."

Download a copy of the Halifax house price index

A report by a Government appointed consultant has proposed building up to 80,000 more homes than is allocated in the West Midlands draft regional spatial strategy (RSS). Planning consultants Nathaniel Litchfield and Partners' (NLP) long awaited report on the region's capacity for additional housing was released earlier this week. It presented three potential growth scenarios, which propose adding between 417,000 and 445,600 housing units by 2026.The West Midlands Regional Assembly's (WMRA) Phase Two RSS revision planned for 365,000 homes by the same year.

The Government Office for the West Midlands (GOWM) asked NLP to carry out the independent study in January following intervention from Communities Minister Baroness Andrews. GOWM Director of Planning David Marr said the report was not an attempt to steamroller through extra housing numbers:

"It's a piece of evidence that we, and others, will think about. We have done all we can to be open, so as to avoid cynicism. The Government wants to understand what the implications (of extra housing) are too."

Marr stressed the report had found scope for adding additional housing without the region's urban areas suffering from net migration. But he added there was a limit on how much housing supply could be raised before it did have an effect.

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New powers aimed to help keep homes affordable for communities in rural areas were set out today as Housing Minister Iain Wright launched two consultations.

Under the proposed new powers, rural communities with severe housing shortages could be designated as protected areas ensuring affordable housing is retained for local families.

The new proposals would also enable all affordable housing providers in these protected areas to retain a share in new shared ownership homes, or have the first option to buy back such properties, ensuring they remain available for future families in the local community.

In a further step, first-time buyers in rural areas could own a home for as little as £60,000 through a consultation to expand Community Land Trusts (CLTs). Iain Wright said he wants to see more people being able to cut the cost of getting on the housing ladder through CLTs. Through CLTs, buyers only pay for the building, not the land, of a property. For example, Holdsworthy Community Property Trust in Devon is already offering local people flats that cost £115,000 for prices as low as £59,500.

Mr Wright said:

"In rural areas where affordable housing is scarce and hard to replace, we need to make sure those homes are protected for future generations. And today, we're unveiling new proposals on community land trusts and preserving affordable housing which will help achieve that goal."

"We're providing all the tools so local communities can find a solution that's right for them."

Matthew Taylor's recent independent review on rural housing found low supply of housing in rural areas is holding our rural communities back, and recommended a new drive to boost rural jobs and community led affordable housing.

The Government has a national target to deliver 10,300 new affordable homes in smaller rural communities (less than 3,000) over the next three years - part of £8.4bn pledged under our biggest ever affordable housing drive. Funding is also now based on completions to ensure homes are delivered.

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Download the consultation document "Shared Ownership and Leasehold Enfranchisement and Designation of 'Protected' Areas"

Download the consultation document "Community Land Trusts"

The Town and Country Planning Association (TCPA) called on London Mayor Boris Johnson to improve the quality of life for people living in the city by better planning. It said that existing residents' considerations should be better prioritised instead of focusing purely on housing numbers.

TCPA Chief Executive Gideon Amos commented:

"The welcome increase in the number of homes in London has too often been achieved at a price. Worsening living environments for existing residents, a loss of urban green space and a shortage of family homes with gardens have now become widespread. While the housing recession bites there is time to reassess schemes, prioritise quality as well as quantity of homes to be built and focus on better environments for existing as well as new residents. Planning and development in London needs to put the interests of people and their local environments first."

The TCPA has made a series of proposals to the London Plan consultation "Planning for a Better London".

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Download a copy of "Planning for a Better London"

The Royal Institution of Chartered Surveyors (RICS) Construction Market Survey, published this week, warned that the Government's housing targets of building two million new homes by 2016 is looking further out of reach with the downturn in the construction industry sending growth in private housing workloads to a record low.

RICS Senior Economist Oliver Gilmartin said:

"With finance for projects becoming increasingly difficult to obtain, the Government's ambitious target of 2m new houses a year by 2016 is likely to fall well short. At current levels of production the number of new homes built will fall below 100,000 in the coming year. "

The RICS survey reported that overall construction workloads declined at their fastest pace in the survey's 14 year history with 38% more Chartered Surveyors reporting a fall than a rise. Adding to this gloom, 41% more Chartered Surveyors expect workloads to fall rather than rise over the coming twelve months as financial constraints continue to bite.

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The UK's housing system is fundamentally broken and needs "...far-reaching wide-scale, holistic reform to deliver fair, affordable and flexible housing in the future..." according to a policy document published this week by the Chartered Institute of Housing.

This is the stark conclusion of a policy document which makes over 20 recommendations to reform the housing market. The document has been produced in response to a proposed Government Green Paper on housing reform to be published later this year.

CIH Director of Policy and Practice, Richard Capie said:

"If the credit crunch has done anything useful it has pointed out in stark terms that housing has had fundamental problems for many years - problems we've glossed over. It has also reminded us that if we get it wrong, the whole economy suffers. There are few hiding places and everyone and everything is affected.

"We need a housing market that we should aspire to and one that would make better and sustainable use of our 26m homes. We are calling for a housing system that would expect banks and financial institutions to work within a system of responsible lending to responsible customers. Builders and developers would work more closely and effectively with local authorities and communities to build the right types of housing, with greater transparency about what each party is getting from the deal.

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In a letter sent to Secretary of State for Energy and Climate Change, Ed Miliband, the Committee on Climate Change advises that:

The CCC also advised that there are practical difficulties in bringing international aviation and shipping within the UK national budget system at present and that polices are needed to constrain emissions from these sectors. Until these sectors have the potential to reduce emissions by 80%, other sectors may need to reduce their emissions by more than 80% to compensate.

The CCC state that meeting an 80% target or higher will be challenging but feasible based on a range of options for reducing emissions including: Energy efficiency improvement, the decarbonisation of power, transport, heat and industry.

A full report on the 2050 target and the first three carbon budgets will be published on 1 December 2008.

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A war of words has broken out between countryside campaigners and renewable energy generators over the issue of 'goodwill payments' from wind farm developers. The Campaign to Protect Rural England has called on the Government to ban the payments on the grounds they risk "... bringing the planning system into disrepute".

The CPRE published a survey which it claimed showed the practice was on the increase and gave the impression that wind farm consents were being "bought". The CPRE want goodwill payments outlawed and any such offers channelled either through the s106 system or the proposed Community Infrastructure Levy (CIL).

Paul Miner, CPRE's Senior Planning Campaigner, said:

"CPRE supports the need to increase investment in renewable energy, including wind energy. But 'goodwill payments' threaten to bring the planning system into disrepute and are questionable even on the grounds of the need for more renewable energy. We believe that the solution is to outlaw these payments completely. Energy companies should be required to work through the planning process in the same way as any other developer."

However, the British Wind Energy Association has reacted angrily, claiming CPRE had implied the wind industry was making improper payments to local communities in order to win planning permissions. Charles Anglin, BWEA Director of Communications, said:

"This is an outrageous assertion. Wind farm developers are damned if they do damned if they don't. We recognise that wind farms are a long-term presence in local communities and we want to give something back to those communities. That is in the best traditions of local community engagement."

A spokesman for Communities and Local Government said:

"We are quite clear that there can be no question of planning permissions being bought or sold, nor can there be any perception that this could be the case."

"Our existing policy is clear (regarding planning obligations or section 106 agreements) planning permission cannot be bought and sold. Similarly, planning obligations should never be used purely as a means of securing for the local community a share in the profits of development, i.e. as a means of a 'betterment levy'."

"In addition Government has been very clear that CIL is a mechanism to raise additional revenue to support the delivery of infrastructure needed to support the growth of an area. CIL is not a mechanism to provide general community benefits such as insulating private homes."

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Gordon Brown this week finalised his cabinet reshuffle. Former Housing Minister Caroline Flint, who was replaced by Margaret Beckett, became Minister of State (Europe).

Click here for information regarding all Ministerial appointments and a full list of Government.

In response to the Government's changes, the two main opposition parties also made changes:

Notably Sarah Teather has become the Liberal Democrat Shadow Housing Minister moving from Business and Enterprise.

Wednesday 15 October - Savoy Place, London

The annual Housing Market Intelligence conference is the house building industry's leading event for discussion of the strategic and macro issues facing house builders and is a must for anyone involved in the business of house building.

For further details please contact the events team on 020 7960 1646 or events@hbmedia.co.uk

Thursday 23 October - Millennium Mayfair Hotel, London

Now in their fourth year, the Awards have become firmly established as the most coveted accolade in the UK house building industry. These awards recognise innovation among house builders and their suppliers in categories including ‘best sustainability initiative', ‘best innovation in technology' and ‘best initiative to first-time buyers/ key workers'. The glittering black tie event will this year be hosted by John Humphrys and takes place on 23 October in London.

For further information visit http://www.hbmedia.co.uk/ or take advantage of the early booking discount before 22 August, by contacting the events team on 020 7960 1646 or events@hbmedia.co.uk.

Wednesday 12 November, University of York

This year has seen the Government propose major changes to the way that Building Regulations are enforced. With many regulations under consultation, it is important to keep informed of current and future legislation. The morning section of the conference will provide delegates with up to date information on Parts G & L, the Code for Sustainable Homes as well as examining the future direction of travel for building regulations.

The afternoon is to be devoted to the delivery of Zero Carbon Homes with the agenda to be set by the new Zero Carbon Hub.

For further details please contact the events team on 020 7960 1646 or events@hbmedia.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/

Rosie Hinchliffe

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