HBF Wales Weekly News Summary Friday 19 December 2008

Friday, 19 December 2008Top stories this weekGovernment increases HomeBuy Direct funding to £400m.....read more CLG Select Committee: Housing and the Credit Crunch.....read more

Rightmove house price index.....read moreCML: Gross lending declines in November.....read moreDefinition of Zero Carbon Homes and Non-Domestic Buildings: Consultation.....read moreQuick LinksWales news Government and political news Housing market news Economic news Industry news HBF news Events Wales newsExtra £38m for flood and coastal risk management in Wales announced

An extra £38m for flood and coastal risk management was announced this week by Environment Minister Jane Davidson as she responded to a major report on the issue.
Ms Davidson said that action was being taken as a response to the growing number of homeowners who now face difficulties as result of the ‘credit crunch'.

Wales needs to take the "Green road out of the recession"

The Welsh Liberal Democrats have outlined how the party's plans to put Britain on a ‘Green Road out of the Recession' would benefit Wales by creating jobs and leaving a legacy that will save energy, put money back into people's pockets and fight climate change.

The plans outlined will cost £12.5bn, which would be paid for by scrapping the Government's proposed VAT cut. The vast majority of that money will be spent immediately, making a real impact on the economy and people's lives right away.

The ‘Green Road out of the Recession' proposals would:

Insulate every Welsh school and hospital within 5 years;Help Welsh households in fuel poverty by funding insulation and energy efficiency for tens of thousands of homes and a £1,000 subsidy for many more;Create thousands of new jobs, especially in the struggling construction industry, which has seen 12,000 jobs go in Wales in the last year;Install smart meters in every Welsh home within five years;Building extra zero-carbon social houses;Boosting the rail network through new train carriages, reopening old railway lines and stations, and opening new ones.

to top Government and political news Government increases HomeBuy Direct funding to £400m

In response to strong industry interest, the Government has increased funding for the HomeBuy Direct scheme from the £300m originally allocated to £400m. The scheme, worked up with significant HBF input, forms part of the Government's package of measures to assist the housing market.

Housing Minister Margaret Beckett this week announced the proposed allocations for the scheme. More than 130 developers have agreed to offer HomeBuy Direct which, with its increased funding, will help up to 18,000 first time buyers to purchase a home at sites across England aided by an equity loan, part funded by the Government and the developer. The equity loan, which will be free of charge for five years, can be used as a deposit and can cover up to 30% of the purchase price.

This means a first-time buyer could purchase a house worth £180,000 for as little as £126,000. As with other HomeBuy schemes, first-time buyers whose household income is under £60,000 will be able to apply.

Eligible first-time buyers will be able to apply for the scheme from early 2009 by contacting a HomeBuy agent in their region.

Housing Minister Margaret Beckett said:

"We are determined to give families real help in the current economic climate. For many young families who aspire to own a home, the difficulties in the housing market have made the step on to the property ladder that bit harder. This deal will give them more support and put their dream of becoming home owners within reach. At the same time, this scheme will also help developers to weather the tough times in the market, by protecting jobs and helping to keep business going."

to topHBF welcomes £400m HomeBuy Direct announcement

Following the announcement of the HomeBuy Direct package, which HBF worked closely with Government officials to design, Stewart Baseley, Executive Chairman of the HBF said:

"Today's announcement is very welcome and great news for home buyers and the industry alike. HBF has worked closely with Government to design a workable product for both customer and seller, and HomeBuy Direct will assist to both deliver desperately needed affordable housing, and protect house building industry capacity - so vital if we are to provide the houses we know this country needs in the future. We look forward to working with the new Homes and Communities Agency to ensure its speedy and effective implementation.

"The housing market is so critical to the wider economy that such Government intervention is imperative. We now need to see further steps taken to restore mortgage provision, with urgent action on Sir James Crosby's recommendations a necessity."

CLG Select Committee: Housing and the Credit Crunch

On 16 December, John Stewart, HBF Director of Economic Affairs, appeared with other representative bodies before the CLG Select Committee which is carrying out a short inquiry into housing and the credit crunch. John stressed the need for more Government action quickly. All of those giving evidence emphasised the urgent need to implement Crosby's recommendations on restoring the availability of mortgage finance. The Committee subsequently raised these points with Housing Minister Margaret Beckett when she gave evidence to them immediately afterwards.

to top"Government has been too slow - more action needed now" HBF tells MPs

In a press statement following the Committee's evidence session, HBF said that Government action had been consistently too slow in arriving and nowhere near comprehensive enough to date.

Referring to his evidence, John Stewart said:

"We have been warning Government for many months that it needs to act and the action taken, whilst welcome, has been far too slow. They have lacked urgency. We need much more to be done now, as every day it fails to act sees more industry capacity lost, more jobs lost and more businesses disappearing...

Crosby must be acted on now. He was commissioned in the budget and now they are talking about waiting till the next budget to act. They have waited and waited again when urgency is needed."

Changes to Credit Guarantee Scheme

The Government has announced proposals for changes to the Credit Guarantee Scheme. These changes are designed to enhance the effectiveness of the Scheme in supporting stability in the financial sector and maximise its impact on wider economic stability through supporting lending to the economy. They draw on experience gathered over recent weeks of operating the scheme and follow discussions with participating banks.

Taking account of international experience, and market developments (in particular the falls in bank risk premia), the Government is adjusting the formula that determines the fees paid by participating institutions for use of the Government guarantees. This will lead to those institutions paying a lower - but still commercial - fee for use of the scheme, reducing their cost of funding under the scheme, and more closely aligning the scheme with those in other countries. This in turn will support their ability to continue to extend credit to the economy. The Government will, through its new Lending Panel, ensure that this is reflected in the terms and availability of credit to households and businesses.

The Scheme is open for an initial period of six months. This, and the size of the Scheme, will be kept under review. These proposals vary the Scheme as approved by the European Commission on 13 October 2008 and are subject to the Commission's approval under the State Aid rules. The Government has informed the European Commission of these proposals and will bring forward changes to the rules of the Scheme to implement these proposals once it has obtained the Commission's approval.

to top CML welcomes changes to the credit guarantee scheme

The Council of Mortgage Lenders has welcomed the Treasury's announcement of changes to the credit guarantee scheme that will make it cheaper for lenders to gain access to the Government guarantees that help them to gain access to wider market funding.

The CML also noted the Treasury's continuing work towards working up its proposal to seek State Aid approval from the European Commission for the Crosby report proposals, and hopes this can press ahead quickly.

CML Director General Michael Coogan commented:

"The Government now seems to be hearing the message that lenders cannot realistically deliver all that is expected of them under current conflicting expectations, and moving to address some of these. We welcome the Chancellor's acknowledgement that there is still more that the Government can do to help try to facilitate more conducive conditions for lending."

to top Housing market newsRightmove house price index

The Rightmove house price index published this week reported that:

The average property asking price was £217,808 in December, a fall of 2.3% from the November figure of £222,979 and down 6.3% year on year;68,000 Christmas sellers have cut their asking prices by a further 2.3%;Initial asking prices are now more than 10% (£24,692) below the peak in May;Rightmove predicted that asking prices will bottom out by the end of 2009, having dropped a further 10%.

Miles Shipside, Commercial Director of Rightmove, commented:

"In spite of welcome Government and industry initiatives, desirable property you would not normally see in a forced-sale scenario will be available at prices that are exceptionally attractive for anyone in the position to buy their dream home... The location of the best quality bargains will be dependent on which popular areas are hardest hit by the credit-crunch, with thousands of local markets operating their own supply and demand environment. How this will unfold is very hard to predict, but what is certain is that the traditional mainstream buyers will be the ones left sitting on the sidelines watching these quality deals pass them by, due to a continued lack of low deposit mortgage finance."

Download a copy of the Rightmove house price index

to top BSA property tracker: More buyers look to enter the property market

Increasing numbers of people believe that now is a good time to buy a home, with the Building Societies Association's Property Tracker survey finding that 46% of people agree to some extent that now is a good time to purchase.

Despite several reports suggesting further gloom for the housing sector, sellers will take Christmas cheer from the news that this represents an increase from the 34% of people who thought September was a good time to buy and the 27% who did in July.

Paul Broadhead, Head of Mortgage Policy at BSA said:

"With sentiment playing such an important role in the property market, the gradual increase in the numbers of people who believe it is a good time to buy bodes well for 2009. Also it is clear that increasing numbers of people believe that mortgage finance is more affordable than earlier in the year."

This is supported by the survey finding that concerns about being able to pay the mortgage are receding, with just 37% of people viewing it as a problem, compared with 54% in September and 70% in July.

to top Economic newsCML: Gross lending declines in November

Gross mortgage lending reached an estimated £14.6bn in November according to the Council of Mortgage Lenders. This is a 22% fall from October and a 51% fall from November last year.

The CML also published mortgage market forecasts for 2009, but cautions that in the current challenging environment, the forecasts need to be seen as indicative, rather than as a precise assessment of likely activity. The CML state that with the low level of housing market turnover, they anticipate gross mortgage lending of around £145bn next year, down from around £258bn this year, and £363bn in 2007. Net lending, however, is likely to become negative as consumers repay existing mortgage debt to a greater extent than they borrow on new mortgages, perhaps to the tune of around minus £25bn - a possibility already highlighted by Sir James Crosby in his analysis for the Government.

CML Director General Michael Coogan said:

"In looking ahead to the coming year, the housing market will remain extremely subdued and net mortgage lending is likely to turn negative. Repayment problems will worsen against the backdrop of rising unemployment but lenders and government are working to try to reduce the negative impact on borrowers.

"Recent glimmers of light in terms of government intervention to improve conditions to support new lending are helpful, but more will be needed. 2009 will be a challenging year, but borrowers who remain in employment will see some benefits in the form of lower mortgage rates."

View the CML market forecasts for 2009

to topBank publishes minutes of the Monetary Policy Committee meeting

The Bank of England published the minutes of the MPC meeting held on 3 and 4 December 2008 this week. These show the MPC voted unanimously to reduce the Bank Rate by 1.0 percentage points to 2.0% and the minutes state that:

"The Committee noted the importance to the economic outlook of bank lending, to both households and businesses. In that context, the underlying weakness in credit and broad money growth was a concern. Banks and many other financial institutions needed to continue to reduce their leverage over a period. However, if they attempted to do that quickly by constraining their lending they would reinforce the downward pressures on the real economy. But the Committee agreed that the Bank Rate was not the right policy instrument to tackle supply constraints in the credit market. Further measures to underpin lending growth would be needed, building on the Government's package announced in October to recapitalise and guarantee funding to the banks."

Download a copy of the MPC minutes

to top Industry newsNHPAU unveils new initiatives to support regional partners

The National Housing and Planning Advice Unit (NHPAU), the body set up to provide independent advice to local and national government on housing supply and affordability, has unveiled the next steps in its programme of support for regional partners - Regional Assemblies, Regional Development Agencies and Government Offices.

Preparing for implementation of the Sub-National Review - new tools for practitioners dealing with sub-regional housing markets: NHPAU has commissioned two new pieces of research to help model housing markets and affordability at a sub-regional level. The first will be a project to establish the geography of housing market areas in England. The second will be a feasibility study to develop a model of housing supply, prices and affordability at a sub-regional level;

Housing affordability data sources publication: The Unit has launched a new publication "Measuring Housing Affordability: A Review of Data Sources". The Cambridge Centre for Housing and Planning Research has, for the first time, collated information on the sources of standard housing data that planning authorities can use to understand their housing markets and affordability indicators in one accessible resource. The publication seeks to identify which data sources are the most useful and/or robust at different spatial scales and evaluates their strengths and weaknesses;

Housing affordability events completed, new events series being considered: The Unit has completed a series of housing affordability events for regional partners, which outlined housing affordability issues and measures in detail and allowed delegates to experience how the Unit's Affordability Model can be used in the planning process. Around 80 people from the Regional Assemblies, Development Agencies and Government Offices enrolled for the workshops that were held around the country between October and December.

to top Definition of Zero Carbon Homes and Non-Domestic Buildings: Consultation

The Government has published its long-awaited consultation document on the definition of zero carbon homes. The document recognises the practical and financial challenges of the zero carbon objective and that in many cases fully on-site solutions will not be possible. It therefore proposes a definition of zero carbon for new homes, based on a "hierarchy" of measures starting with high energy efficiency, then on, or near, site carbon reduction, and other allowable (mainly off-site) solutions for dealing with the remaining emissions. It is also proposed that such allowable solutions would be subject to a suitable cost cap. In addition, the paper also sets out current Government thinking on the zero carbon objective for new non-domestic buildings.

Housing Minister Margaret Beckett commented:

"Climate change is one of the biggest challenges facing the world, and introducing zero carbon homes is an important part of our plans to tackle this, as well as further action to tackle emissions from the existing housing stock. I am absolutely committed to our 2016 target, and this demanding goal is already spurring action here and abroad.

"With the consultation process we are launching today, we are confident we will be able to achieve our ambitions while giving the industry flexibility for how they get there."

HBF will be organising a member group to consider its response to the consultation (which closes on 18 March). If you would be interested in participating in this, please contact HBF's Technical Director Dave Mitchell via email: dave.mitchell@hbf.co.uk.

We will also seek your views through our regular member meetings, while the Zero Carbon Hub is organising a series of seven regional meetings in February which you would be welcome to attend. In addition, we will produce a briefing note on the consultation summarising its main proposals and flagging up the issues we believe are most important to consider.

Download a copy of the consultation document

to topNHBC welcomes increased flexibility in zero carbon definition and urges industry to respond

NHBC has welcomed increased flexibility in the Government's zero carbon definition in their consultation launched this week.

NHBC Chief Executive, Imtiaz Farookhi said:

"This 'fabric first' approach is a positive step in the right direction and allows for the flexibility essential to make this agenda happen.

"We are at a cross roads on the journey to zero carbon and this is arguably the most significant policy decision for decades. It is therefore critical that we get it right and agree a workable definition. Ultimately this is about homes that people have to live in and there needs to be a full debate around the issues. I strongly urge the industry, despite the dire market conditions, to put its weight behind the debate and respond fully to the consultation. It is particularly important for smaller builders, for whom the challenge is even greater.

"Two years have already elapsed to get us to this point, which only goes to emphasise the complexity and difficulty of the issues involved. Once a conclusion on the definition has been reached there is an enormous amount of work to be done to define the solutions and to do that by 2016 will be extremely demanding."

Affordable housing supply in England 2007-2008

CLG released the statistics for the supply of affordable housing in England this week. The key points in the document include:

A gross total of 53,730 additional affordable homes were supplied in England in 2007-08. This was an increase of 21% from 44,570 additional affordable homes supplied in 2006-07 and is the highest number of new affordable homes provided in England since 1996-97;

29,370 new affordable homes were made available for social rent in 2007-08, while 24,360 homes were provided through other intermediate housing schemes including shared ownership and shared equity, up 19% and 23% respectively on the previous year;

New build homes accounted for 43,560 or 81% of all new affordable homes supplied in 2007-08, a similar proportion to 2006-07;

New build homes funded by the Housing Corporation accounted for 65% of total additional affordable homes supplied in 2007-08. Acquisitions by the Housing Corporation accounted for 13% of gross additional supply in 2007-08;

Just under half (47%) of national supply of new affordable homes was provided in London and the South East in 2007-08;
Eight out of nine regions experienced an increase in new affordable housing supply in 2007-08, with the North East showing a decrease of only 350 homes.

to topHalf of construction businesses still unaware that SWMPs are law

More than six months on from Site Waste Management Plans (SWMPs) becoming a legal requirement, a survey conducted by NetRegs.gov.uk has shown that more than half (51.2%) of construction businesses are still unaware that SWMPs are mandatory for projects over £300,000 in England.

In response, NetRegs has launched a campaign to help businesses and individuals to understand their obligations under the new law. The campaign includes special emails featuring a video case study as well as top tips and user-friendly in-depth information. The free email alerts for construction businesses can be subscribed to by visiting http://www.netregs.gov.uk/ and clicking on to the ‘Site Waste - It's Criminal' logo. Businesses in the construction industry already using the government-backed service are saving at least £2,637 a year.

to top HBF News

HBF's offices will close for Christmas at 12.30pm on Wednesday 24 December and reopen on Monday 5 January 2009. This will therefore be the final weekly news summary of 2008, with the next one to be issued on Friday 9th January, 2009.

As in previous years HBF will not be sending traditional Christmas cards but has instead made a donation to its nominated charity ‘Habitat For Humanity'.

Everyone at HBF would like to wish you all a very happy Christmas and a prosperous 2009.

to top EventsHBF Policy Conference

Tuesday 17 March 2009, Central London

The HBF Policy Conference will look at the current challenges facing the industry. A full list of speakers and further details will follow shortly. If you have any questions then please contact the events team on 020 7960 1646 or events@hbmedia.co.uk

HBF Annual Industry Lunch 2009

Wednesday 22 April, Central London

This year's HBF AGM and Annual Industry Lunch will take place on Wednesday 22 April.

Further details and a booking form are now available on the HBF site please click here.

If you have any questions then please contact the events team on 020 7960 1646 or events@hbmedia.co.uk

to topHope Challenge: 12 - 14 June 2009, Peak District

HBF's nominated charity, Habitat for Humanity, which builds safe, decent homes for families living in poverty, is organising a fundraising event to take place next summer. Hope Challenge 2009 is a challenge event for teams of 3-6 people and will test your initiative, your teamwork and your fitness. And by sleeping in your very own shelter you will experience some of the challenges faced by those who live in poverty housing. The event involves:

2 days and 2 nights in the great outdoors Mental and physical team challenges 1 overnight shelter to build, and sleep in 1000m of hill ascent and 20 miles of trekking A balance of fitness, strategy and team work

We are looking for teams of people who want to rise to the challenge of raising funds in support of the 2 billion people living in poverty housing around the world.

Click here for more information and entry requirements

Housebuilder magazine

Are you a member of the Home Builders Federation? As a member you are eligible to receive a free copy of Housebuilder magazine each month. Housebuilder is a leading source of information for people working in house building, containing all the latest industry news and analysis.

Click here to claim your free copy

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