HBF Wales Weekly News Summary Friday 21 November 2008

Friday, 21 November 2008Top stories this weekHBF: Calls for radical action to assist the housing market in the PBR.....read more CML: Gross lending totalled £18.7bn in October.....read more

Rightmove house price index.....read moreMargaret Beckett's speech to the NHBC annual lunch.....read moreMayor of London publishes housing strategy.....read more Quick LinksWales news HBF news Economic news Housing market news Government and political news Industry News Events Wales news400 green homes to be built across Wales for unique pilot

Up to 400 new sustainable homes will be built across Wales as part of a unique project announced by the Welsh Assembly Government.

The £80m scheme will see 22 schemes being constructed in both urban and rural locations. All the properties will be built to the highest green standards, at levels 4 and 5 of the Code for Sustainable Houses.

The project aims to help Welsh Ministers understand the implications of building homes to the higher standards of the Code for Sustainable Homes. It will also help the building industry develop the skills and confidence required to deliver homes in the mass housing market.

David McLean sold to former senior managers

House builder David McLean Homes has been bought by Elan Homes, administrator Deloitte has announced. Around 90 jobs are expected to be saved by the deal.

to topNew vision for sustainable Wales revealed

The Welsh Assembly Government has revealed its plans to make Wales a sustainable nation.

Environment, Sustainability & Housing Minister Jane Davidson said:

"This plan is a new vision for Wales. It makes sustainable development the single organising principle for all parts of the public sector. The Assembly Government will use all its devolved powers - from health, transport to education - to lessen Wales' environmental impact on the world and help protect our country for future generations."

to top HBF newsHBF: Please Be Radical Darling

The HBF is calling for radical action in next week's Pre-Budget Report to assist the housing market. In a press release we have called on the Chancellor to:

Use the influence Government now has in the banking sector to insist some sensible levels of mortgage lending return, as was promised by the Chancellor when the package to inject cash into the banks was announced last month;

Reallocate a significant part of the Housing Corporation's budget - that will not now be spent as planned because of the current downturn - to buy both empty new homes, and to unlock sites on which development could start immediately with an injection of up-front public money and be developed using public private partnership agreements;

Overcome barriers and put in place incentives that would encourage new sources of housing demand, such as institutional investment in private rented housing, and allowing Self-invested Person Pensions (SIPPs) to invest in residential property.

In his comment, Stewart Baseley, Executive Chairman of the HBF said:

"We have reached the stage where radical and decisive action is needed to assist the housing market. Whilst the moves made by Government so far are welcome, they have in no way been comprehensive enough to address the scale of the current housing crisis. With the housing market so absolutely critical to the wider economy, the Chancellor cannot miss the opportunity presented by the Pre-Budget Report. Allied to the long awaited cuts in interest rates, restoring mortgage lending, injecting cash directly into building projects and introducing measures to encourage large new investment in residential property would boost the housing market, the benefits of which I believe would ripple through the economy."

to topHBF makes the case for more investment in housing in the media

Following the Financial Times' Tuesday report featuring HBF's views on the need and scope for significant further reallocation of Housing Corporation funding to purchase stock and pump-prime new development, John Slaughter appeared on both Radio Five Live's "Wake up to money" and Radio Four's "Today" programme on Wednesday morning to make the case for such action.

to top Economic newsCML: Gross lending totalled £18.7bn in October

The Council of Mortgage Lenders released data this week which showed that gross mortgage lending totalled an estimated £18.7bn in October, almost 7% higher than an admittedly weak £17.5bn lent in September. The monthly total was 44% lower than gross mortgage lending of £33.4bn in October 2007.

Commenting on the figure, CML Director General Michael Coogan said:

"While lending in October ticked up from a low figure in the preceding month, the outlook is one of continuing weakness for housing and mortgage markets in the coming months, despite the Bank rate cuts in October and November.

"Consumer confidence is now being affected by the worsening economic outlook. However, any recovery in lending is also being held back by the continuing shortage of mortgage funding. The government should therefore publish the delayed Crosby review as part of the forthcoming pre-Budget report and announce concrete steps that will enable and encourage firms to increase mortgage loans."

to topCML confirms repossessions are last resort and in line with forecasts

The Council of Mortgage Lenders published quarterly data and analysis on mortgage arrears and repossessions for the first time this week having previously published data on a half-yearly basis. Quarterly data is available from the start of 2008.

The CML reports that 1.44% of mortgages were at least three months in arrears as at the end of September 2008, up from 1.33% at the end of June. The number of cases in arrears at the end of September was 168,000, 8% higher than the 155,600 at the end of June.

The CML also reports that 0.1% of all mortgaged properties were repossessed in the third quarter of 2008, up slightly from 0.09% in the second quarter. By number, this equates to 11,300, 12% higher than the 10,100 in the second quarter. The CML continues to expect the total number of repossessions this year to be around 45,000, as forecast in October 2007.

Commenting on the latest data, CML Director General Michael Coogan said:

"The CML and lenders are absolutely committed to ensuring that repossession is only ever a last resort. Most borrowers who face payment problems successfully keep their home by working with their lender - anyone worried about mortgage payments should contact their lender at the earliest opportunity, before arrears start to build up...

"Looking ahead, conditions in the wider economy suggest a worsening picture for mortgage arrears, however carefully lenders handle their treatment of borrowers in difficulty. But while lenders cannot change the underlying causes of financial difficulty, such as unemployment, they can make sure that their response to borrowers is constructive and seeks to avoid repossession wherever other solutions can be found."

Monetary Policy Committee minutes

The minutes of the last meeting of the Monetary Policy Committee meeting, held on 5 and 6 November, at which it was decided to cut the base rate by 1.5%, were published this week.

The minutes show that the Bank of England had considered a drastic reduction in borrowing costs of two percentage points, or even more, this month. It also revealed that the Monetary Policy Committee had unanimously backed the radical 1.5% cut made a fortnight ago.

The minutes said that the Bank's latest forecasts for the economy implied that a very significant reduction in rates, possibly in excess of two full percentage points, might have been needed. It emerged that the key reason why the MPC decided against a bigger move was concern that such a sharp cut in rates might trigger a dangerous collapse in sterling, which in turn would stoke inflation.

"A key concern was the degree of surprise to financial markets. Too large a surprise could pose upside risks to the inflation target if the resulting depreciation of sterling was excessive," the minutes said.

According to the minutes, the other factors that persuaded the MPC not to opt for an even larger cut were that it wanted to wait to see the size of tax cuts and spending increases by the Chancellor in next week's Pre-Budget Report, and that it wanted to gauge the effectiveness of the Treasury bailout of the banks.

Download a copy of the minutes

to top Housing market newsRightmove house price index

Rightmove's house price index, published this week, reported that:

The average property asking price reduced by -2.9% month on month, falling from £229,691 in October to £222,979 in November;There was an average of just 20,000 new sellers a week in October, down from about 35,000 last year. Rightmove estimate that this was the lowest weekly average since 2002;The average number of properties for sale per estate agency peaked at 77 in July and stood at 73 in October;The average 7.1% year-on-year fall in initial asking prices did not tally with agents' feedback of achieved sales prices at around 20% below peak asking prices.

Miles Shipside, Commercial Director at Rightmove, commented:

"Some sellers could avoid months of disillusionment and despair if they started marketing at an asking price a lot closer to where the evidence indicates they are likely to end up. While average asking prices have fallen by 7.1% over the past year, in most parts of the country you should look to at least double that discount to achieve a sale."

Download a copy of the Rightmove house price index

to topNAEA reaction to the Rightmove house price index

Following the publication of the Rightmove index, Chris Brown, President of the National Association of Estate Agents (NAEA), said:

"This is evidence of the difficult times that sellers face in today's troubled economic climate. We have already called for measures to help - particularly for the Chancellor to stop treating stamp duty as an immoveable feast.

"However there is a silver lining within these figures, for buyers. As sellers face up to the new economic reality and adjust their prices accordingly - it means that buyers have a clearer picture of the housing market.

"They will spend less time looking around houses with last year's price tags attached and can have more confidence in the market. As anyone in the profession will tell you, consumer confidence is the key to market recovery."

RICS residential lettings survey Q3 2008

The results of the RICS residential lettings survey were published this week. Key points included:

The growth in new instructions outpaced growth in tenant demand;Rents fell for the first time since April 2003 while rental expectations dropped to the lowest level on record;Gross yields rose as house price falls outpaced rental falls;27% more surveyors reported a rise in new tenant lettings than a fall, compared to 36% in July;56% more surveyors reported a rise in new landlord instructions than a fall, compared to 45% in July.

Download a copy of the RICS residential lettings survey

Savills' UK residential forecast

Key highlights of Savills' central forecast for 2009, released this week, included:

UK mainstream to fall a further -11% next year. Falls to the end of this year were expected to total -16%;Prime regional markets were anticipated to fall by -10% in 2009, taking total falls from the peak to -25%;Prime central London was expected to see the sharpest total falls, with the forecast anticipating total falls to be c. -30% from peak. Currently, values are -12% year on year and expected to be at -20% by the year end;Central London rental values were forecast to fall a total of -7% from their peak in early 2007

Lucian Cook, Director of Residential Research at Savills, commented:

"The recent 1.5% base rate cut and the promise of more to come will help to bring forward the recovery in affordability. This, coupled with a rebalancing of supply and demand, will further underpin our recovery model."

Download a copy of the residential forecast

to top Government and political news Margaret Beckett's speech to the NHBC annual lunch

In a speech delivered on her behalf by Nick Raynsford MP at the NHBC annual lunch on Wednesday, Housing Minister Margaret Beckett called for the housing industry to remain focused on the long-term objectives of increasing housing supply and improving quality, including environmental performance.

Mrs Beckett said:

"I want to work with the industry to maintain capacity so that it is ready and able to respond when the upturn comes... In particular we need to work together on investment, training and skills to attract and retain talented people."

The Minister continued:

"....some would like to see me scrap targets for eco-towns, carbon-zero housing, everything that we have been working toward .... It might make a good headline but it would be a cheap and irresponsible move, contrary to the long-term interests of the country.

"While delivering our longer term goals is clearly more difficult, it does not mean that they should be scrapped ... Demand for housing will continue to grow and if unmatched by supply then.....houses will become even more unaffordable.

"There are those who would like to see me rip up the regulations rule book. It might be the easy thing to do but it is not the right thing to do."

to top Mayor of London publishes housing strategy

Mayor of London Boris Johnson has announced a £5bn investment plan to support the capital's housing market over the next three years.

The Housing Strategy aims to boost the construction sector in London during the economic downturn, support the industry to deliver new affordable homes, and provide more sustainable routes to home ownership.

The strategy includes a range of ideas that will replace existing policies. While the Mayor still aims to provide 50,000 affordable homes in the next three years, he has scrapped his predecessor's target that 50% of new residential development should be affordable. The draft strategy will see the Mayor working closely with the Homes and Communities Agency (HCA), investing nearly £2bn every year from the London housing budget with the aim to deliver new homes and improve existing homes.

to top Industry newsNAEA: Cut rates further and suspend stamp duty

The National Association of Estate Agents (NAEA) released a statement this week which reported that more than half - 54% - of estate agents surveyed said they did not have confidence in current Government policies and that more must be done, including a suspension of stamp duty. In addition, they called on the Bank of England to further cut interest rates.

Chris Brown, President of the NAEA, commented:

"Sellers are beginning to face up to the reality that their houses are not worth as much now as they were 12 months ago. They are ripping up last year's price tags and beginning to come to terms with the new economic reality.

"That is a difficult thing to do - but the silver lining is that the market is now more transparent for buyers. Prices are becoming realistic, and we hope that this provides the boost needed to encourage those families who so desperately want to buy houses to get onto the market.

"However, as sellers have bravely accepted the truth of the situation and responded accordingly, so now must the Government and the major lenders."

Local authorities should invest in infrastructure to revitalise flagging housing markets, a study has found

A report, from consultants PACEC for the Local Government Association, recommends organisations at county level should invest in ways that make it easier for developers to build.

It notes that infrastructure investment ‘can reduce the barriers to entry for developers while ensuring that they are able to provide the necessary levels of affordable housing and facilities within their developments'.

The report looks at how different areas of the country will cope with the economic downturn. It says London will be worst affected, while northern cities are likely to fare better.

It predicts the hardest hit industries will be construction and manufacturing and major cities outside London - such as Newcastle, Leeds and Manchester - will do better than the capital because of recent growth.

The report suggests the evidence shows it is important to devolve power to the regions.

‘In time of a recession, the need for devolution to sub-regions, including counties, functional economic areas, local council partnerships and individual local authorities becomes more obvious and more urgent,' says the paper.

Download a copy of "From recession to recovery: the local dimension"

to topHouse building statistical release: Quarter 3 2008, England

The latest national statistics on house building were released under the auspices of the UK Statistics Authority on 20 November 2008.

Statistics in this release present figures on new build housing starts and completions in England. Figures for the UK and constituent countries are also available in the accompanying tables. Key points from the latest release are:

There were an estimated 22,200 seasonally adjusted housing starts in England in the September quarter 2008, down 33% on the previous quarter and 48% lower than the September quarter 2007;

Private enterprise housing starts (non-seasonally adjusted) were 55% lower than the September quarter 2007. In contrast, housing starts by Registered Social Landlords (non-seasonally adjusted) have risen 20% over the same period;

Annual housing starts figures for England continued to decline. They totalled 126,700 in the 12 months to September 2008, down by 26% compared with the 12 months to September 2007 and 31% below their 2005-06 peak;

Housing completions in England fell by 10% from the previous quarter to an estimated 33,300 (seasonally adjusted) in the September quarter 2008. Compared with the September quarter 2007, completions were down by 18%. Quarterly completions exceeded starts for the fourth quarter in a row;

Annual housing completions in England totalled 154,300 in the 12 months to September 2008, down by 9% compared with the 12 months to September 2007. Regionally only the South East is showing a continuing increase in the number of completions.

RHG: Government must not ignore older housing needs

Growing numbers of older people are being denied proper access to housing choice, the Retirement Homes Group said this week. It is urging Housing Minister Margaret Beckett to ensure that older people are not forgotten as the Government focuses on first time buyers and home owners facing repossession as the housing market crisis continues.

In a letter to Mrs Beckett, Gary Day, the newly elected Chairman of the Retirement Housing Group (part of the Home Builders Federation) set out priorities for housing the country's ageing and growing population during the credit crunch.

Mr Day commented:

"We are urging the Government to take steps to assist older people at this time, as in a lot of cases their physical and mental health needs are so reliant upon appropriate accommodation.

"The benefits to the wider market are also clear as when people move into private retirement housing schemes, they are freeing up larger homes for families which, in turn, frees up those families smaller homes for younger couples and for first time buyers."

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

Hope 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

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