HBF Wales Weekly News Summary Friday 28 November 2008

Friday, 28 November 2008Top stories this weekHBF attends Prime Minister's housing breakfast.....read more Pre-Budget Report statement by the Chancellor of the Exchequer.....read more

Killian Pretty review recommendations published.....read moreNationwide: "Rate of price fall moderates in November".....read moreQuick LinksWales news Government and political news Industry news Housing market news Economic news HBF News Events Wales news Minister for Environment Sustainability and Housing meets Wales MDs

The Minister for Environment Sustainability and Housing Jane Davidson joined the HBF and the managing directors of several housing developers yesterday, for a pre-dinner discussion on the housing market and the Welsh Assembly Government's (WAG) sustainability agenda. The HBF and its members explained the severity of the current market situation to the Minister. They outlined the problems the industry is facing and the difficulties that are likely to be encountered when attempting to meet the challenges set out by the Assembly Government in terms of its housing targets and sustainability aspirations. It was also made clear to the Minister that the Assembly Government needs to take action immediately if the industry is going to make a successful recovery in Wales and advised caution over the consequences of inaction or further delays tackling the issues. HBF and members also provided the Minister with constructive advice on how the industry could be helped to overcome the problems it is facing in the short term, whilst providing a commitment to work with the WAG to ensure the industry makes a successful recovery in the long term.

to topLabour challenged to offer industry more assistance

Ministers should step in and prop up industries in Wales to stop further job losses, the Liberal Democrats said yesterday.

More than 700 jobs are under threat at the Hoover plant in Merthyr Tydfil and the Bosch plant in Miskin, near Llantrisant, and official figures show unemployment rising faster in Wales than elsewhere in the UK.

The Lib Dems pointed out that in 1992 Lord Heseltine, promised to "intervene before breakfast, before lunch, before tea and before dinner" to help protect British jobs.

Wales' £43m aims to help 32,000 into employment

A £43M drive to boost employment in Wales by raising skills and confidence was unveiled yesterday. The £29.4m Gateway project will fund projects to boost skills and confidence of people outside the workforce. A £13.4m scheme will provide work experience in northwest Wales. It is hoped two new projects will help more than 32,000 people.

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Government and political newsHBF attends Prime Minister's housing breakfast

Stewart Baseley, Executive Chairman of the Home Builders Federation, was invited to a breakfast meeting yesterday with Gordon Brown and Housing Minister Margaret Beckett. Other attendees included senior HBF members, the Council of Mortgage Lenders and the Federation of Master Builders. Mr Brown stated that affordability and liquidity were the two main challenges facing housing in the UK. Commenting on the discussions, No. 10 reported that the Prime Minister said the "flow of money" was not what it should be and that the Government was trying to "encourage the mortgage market back into business".

The Prime Minister expressed the wish to continue to assist the building industry:

"We all recognise we are in exceptional times, that the financial system and the banking system has been in crisis for several months.

"We know how difficult the circumstances you face are. We recognise the importance of your industry and what you do and its impact on the whole of the economy... we've taken a number of initiatives in relation to housing but are ready to look at more."

Stewart Baseley pressed for urgent action to implement the recommendations of the Crosby Report to restore a normal level of mortgage funding availability and for a range of supporting measures to assist market confidence and increase the use of public investment to maintain construction activity. Discussions with Ministers will continue.

to top Pre-Budget Report statement by the Chancellor of the Exchequer

Chancellor of the Exchequer Alistair Darling made his Pre-Budget Report on Monday - a summary of housing measures announced is below:

The Government has announced that it is bringing forward a total of £3bn of public sector capital spending, which it is hoped will benefit businesses, including in the construction sector;

£775m of this will be for housing and regeneration investment, including £575m to provide additional support for social rented homes, - £150m to support delivery of new social housing (adding to the £400m brought forward in September to provide up to 5,500 new social rented homes), £250m to sustain and accelerate the Decent Homes programme and £175m on major repairs;

On mortgage repossession risks, the Government is to provide direct support to more individuals through the Support for Mortgage Interest regime which has been strengthened following reforms in September. The major lenders are also committed not to initiate repossession proceedings within at least three months of an account going into arrears, and will work to develop creative and sustainable solutions to help borrowers stay in their homes;

The creation of a new ‘Lending Panel' establishing a reporting framework to allow improved monitoring of the mortgage market and encourage the highest standards of industry best practice in supporting borrowers with mortgage repayment problems, consistent with statutory regulation;

The Government also stated that it is committed to ensuring that the right framework is in place to help homeowners facing financial difficulties. In order to strengthen the framework of support for borrowers:, the Government will bring forward a consultation on extending the scope of FSA regulation to include the sale and rentback market; the Office for Fair Trading will bring forward sector guidance early next year to help ensure that second charge lenders do everything possible to ensure repossession is a last resort;

to topSir James Crosby: mortgage finance markets

On 9 April 2008, the Chancellor announced that Sir James Crosby would provide advice to the Government on options for improving the function of mortgage finance markets, working closely with mortgage industry experts.

His interim analysis was published on 29 July. At that time, the report reviewed the importance of these markets for the UK mortgage market. It also highlighted the extent to which ongoing disruption in these markets had contributed, both in the UK and elsewhere, to higher funding costs for mortgage lenders, and the consequences in terms of higher prices for, or reduced access to finance for many borrowers.

Sir James' report published alongside the 2008 Pre-Budget Report on 24 November builds on and updates the interim analysis, and sets out Sir James' recommendations. His most important recommendation is that the Government should auction some £100 bn of guarantees as a means of kick-starting investment in new mortgage-backed securities to restore the short-term availability of mortgage finance.

Download a copy of Sir James' Final Report and Recommendations

HBF: PBR measures fall short of the radical and decisive housing action needed

The HBF expressed its disappointment that the Chancellor did not go further in his Pre Budget Report to assist the nationally vital housing industry. Whilst cautiously welcoming the Chancellor's commitment to free up mortgage lending, we said the Government has failed to heed the industry's call for a significant increase in investment to help bring forward much needed new housing delivery.

The HBF believes that the commitment by the Chancellor to act on the recommendations made by Sir James Crosby in his report on mortgage provision is crucial, but warned that action is needed quickly as without an increase in mortgage lending any housing market recovery will be impeded. And whilst appreciating the need to abide by EU regulations, the Government must use the influence it now has with the banks to insist upon immediate lending increases in the light of the banking support measures already taken. HBF welcomes the establishment of a ‘Lending Panel'. It believes it is critical to monitor mortgage lending so that the Government can take necessary action should it be required.

Stewart Baseley, Executive Chairman of the HBF, commented:

"The housing market is absolutely critical to the wider economy, and we have been saying for months now that urgent action to assist it is required. Unfortunately the Chancellor does not seem to have drawn the same conclusion and today's measures will do little to boost a depressed market. Today's announcement on freeing up mortgage lending must be welcomed, but the Government needs to act fast and implement its proposals quickly if the benefits are to be felt by the wider economy, jobs are to be protected and housing supply is to recover . The money allocated today to start building projects is seriously disappointing, and will do too little to assist."

Stewart Baseley was quoted in a number of national newspapers including the Financial Times (click here to view)

Whilst John Slaughter appeared on the R4's the World this Weekend (piece starts at 12:33) and Radio 5 Live.

John Stewart was asked to comment on Channel 4 news (piece starts at 02:31) and Radio 4's PM programme (piece starts at 34:12).

Read the HBF press release

to topCML response to pre-Budget report

The Council of Mortgage Lenders has welcomed the Government's in-principle decision to accept the recommendations of the Crosby report to rekindle the market for mortgage backed securities. The CML also urged the Government to proceed as quickly as possible in seeking the necessary permissions to proceed, as the dearth of funding was identified as a major constraint to the current mortgage market.

CML Director General Michael Coogan commented:

"Everything announced... is helpful, if modest. But it is vital to recognise that not all lenders are the same, and not all have received support from the Government's interventions in what remains a very difficult financial and economic environment. This has a direct bearing on the extent to which they are able to deliver the Government's multiple aspirations to increase the flow of new lending, be more lenient to borrowers in arrears, and improve their individual capital position."

New Planning Bill makes the statute book - along with other major Bills

The Planning Bill 2008 received Royal Assent this week. The Bill aims to create a new integrated planning system for major infrastructure projects that will enable big decisions to be made in under a year, while giving people three chances to be heard rather than just one as now, and making the entire process more accountable and transparent.

The Act also provides the enabling powers to introduce the proposed Community Infrastructure Levy.

Planning Bill Minister John Healey commented:

"During these tough economic times a quick, predictable and fair planning service that can deliver new renewable energy supplies, public transport and clean water is vital."

"This Government has shown it is making the tough decisions in the interests of the country. The new Planning Act 2008 will bring about real culture change for deciding the future needs of our national infrastructure. Importantly it will also give the public three chances to get their views on proposals across instead of one."

The Energy and Climate Change Bills have also been enacted. The Climate Change Act will introduce a statutory target for the Government to reduce carbon emissions by 80% by 2050 and a series of five year carbon budgets to establish a trajectory towards the 2050 target. The proposals for the initial carbon budgets are due to be announced on 1 December.

to top Sub National Review published

The Government's response to the Sub National Review has been published; the review considers economic development and regeneration and how to strengthen economic performance in England's regions, cities and localities, as well as how to tackle pockets of deprivation.

to top Industry newsKillian Pretty review recommendations published

The Killian Pretty review reported its findings and recommendations on Monday. Jointly commissioned by Communities and Local Government and Business, Enterprise and Regulatory Reform Departments, it was carried out by Joanna Killian, Chief Executive of Essex County Council and David Pretty, previously Group Chief Executive of Barratt Developments PLC, and the current Chairman of the New Homes Marketing Board and HBF Board member.

The review recommends that nearly 40% of minor non-residential, mainly commercial, planning applications, such as for small scale alterations and extensions, should be taken out of the planning system altogether or subject to a much quicker process.

It also recommends improving the critically important pre-application phase, particularly for major developments, with a much greater focus on getting developers, councils and consultees, including local communities, to sort out key issues that could cause lengthy delays later in the process.

It proposes a new customer focus for council planning performance based on the quality of service provided throughout the whole process, not just on its speed.

Download a copy of the Killian Pretty review

Download a copy of the Executive Summary and Recommendations

to topHome builders reaction to the publication of the Killian Pretty review recommendations

The HBF strongly welcomed the publication of the Killian Pretty review in to the Planning Application process. HBF is now urging the Government and other agencies to act on the recommendations - many of which echo changes the HBF has long been calling for - and so deliver a swifter and more efficient system.

Andrew Whitaker, Planning Director at the Home Builders Federation said:

"This is an extremely important Review and a recipe for common sense which should have far reaching benefits in simplifying what has become an increasingly complex, costly and time consuming part of the development process."

"Although appearing to be simple, the 17 detailed recommendations of the Review Team will require significant changes, both in process and culture within the planning system, but if implemented in totality would have a considerable impact. These changes are a challenge for all involved; central government, local authorities, applicants and their agents and local communities - but the prospective benefit for all surely justifies such effort."

"HBF will continue to engage with the process of change and will seek to ensure that housebuilders, as one of the key participants within the planning system, play their full part in implementing the proposals for a more efficient and effective planning application process. We call on others to pledge the same commitment."

Other trade and planning bodies also welcomed the Review's recommendations. CLG has undertaken to publish an implementation plan in the early New Year.

NHBC: "Skills are key as new homes fall to record low"

New home starts in October fell to their lowest level since accessible records began, according to National House Builders Council's new house-building statistics issued this week.

Furthermore, the longer-term picture looks set to worsen as NHBC anticipates as few as 85,000 homes being registered in 12 months to the end of March next year. This compares to the relatively strong volume of 184,000 recorded in the same period last year and will represent the lowest annual figure recorded since the early 1980s when NHBC's accessible records began.

NHBC's Chief Executive, Imtiaz Farookhi, said:

"In the face of such a stark decline in new home volumes, we are at serious risk of losing a generation of skilled workers, as experienced in the 1990s. It is vital that we work to maintain capacity so that when the upturn comes, which it inevitably will, the industry will be able to respond to housing demand."

NHBC statistics released this month also revealed:

There were 19,548 applications to start new homes in the UK during the three-month period from August to October, 62% lower than the same three-month period a year ago (51,608). New build completions totalled 33,771 in the three months to the end of October - 24% lower than the same period a year ago (44,316). The average number of daily sales of new homes in the UK from August to October was 375 - 23% lower on the same period a year ago (485).

to top Housing market newsNationwide: "Rate of price fall moderates in November"

Nationwide's house price index reported this week that:

The average house price fell by 0.4% in November, from £158,872 in October to £158,442;The annual rate of fall of the average price moderated to 13.9%, down from 14.6% the previous month; Nationwide state that fiscal measures may help the housing market indirectly, but policies to support funding markets may be more likely to speed recovery.

Commenting on the figures, Fioannuala Earley, Nationwide's Chief Economist, said:

"The rate of house price falls moderated significantly in November. Prices fell by just 0.4% in the month, compared with 1.3% in October. This brings the annual rate of house price falls to 13.9% down from 14.6% last month. The price of a typical house is now £158,442. This is about £25,000 less than this time last year but is still about £25,000 higher than in November 2003.

"In spite of the moderation in house price falls recorded in November, with the economy in recession, conditions do not appear very favourable for a swift recovery in the housing market... However, there are a number of measures which should provide some support to the market in general and help existing and potential homeowners in these difficult times."

Download a copy of the Nationwide house price index

to top Economic newsBBA: October figures for the main high street banks

According to figures released by the British Bankers Association this week, net mortgage lending rose by £2.9bn in October; less than in September and below the average for the previous six months.

The number of approvals for house purchase remained low while those for other purposes were similar to September. Consumer credit was subdued, rising by just £0.3bn, and personal deposits were flat.

BBA statistics director, David Dooks, said of the latest data:

"The high street banks provided almost £12bn, or two-thirds of all new mortgages, in October. They also increased lending to non-financial companies by £1.4bn and heavily supported financial intermediaries (at the time Government was announcing its financial support for the banking industry). That support, together with lower interest rates, will feed through to lending and yesterday's Pre-Budget Report measures will help consumer demand. Comparison of current lending levels with last year is obscured by the very different economic conditions that exist now, reflecting a much reduced appetite for borrowing. Mortgage approvals remained low, consumer credit was subdued and people used their deposits to fund spending in October."

Download a copy of the statistical release

CML Scotland: Mortgage lending declines in third quarter

The downturn in mortgage lending in Scotland continued in the third quarter with 15,100 house purchase loans granted, an 18% decline from the previous quarter, according to new data from the Council of Mortgage Lenders Scotland.

A similar decline was experienced across the UK in the same period. However, Scotland continued to account for a record high share of new UK house purchase lending (12%).
There were 5,300 loans to Scottish first-time buyers worth £481m, down from 6,600 worth £622m in the previous quarter. The typical first-time buyer put down a deposit of 16%. Interest payments consumed 18.2% of the average first-time buyer's income, edging down from a peak of 18.9% in the fourth quarter of 2007.

CML Policy Consultant, Kennedy Foster, said:

"The year-on year decline in house purchase lending has been less pronounced in Scotland.

"As the Crosby report recognised earlier this week, intervention is needed to restore the availability of mortgages and we hope to see its recommendations implemented swiftly. This would help address the mortgage supply issues, but consumer demand for loans will continue to fall away in the weaker economic outlook."

to top HBF newsRedrow CEO Neil Fitzsimmons joins HBF board

Neil Fitzsimmons, Chief Executive of Redrow Homes, one of the UK's largest house builders, joined the board of the Home Builders Federation this week.

Mr Fitzsimmons joined Redrow in 1997 and was appointed to the board as group Finance Director a year later, becoming group Managing Director in September 2003. A chartered accountant by profession, he has worked in the construction and house building sectors since 1986 and was appointed Chief Executive of Redrow plc on 1 August 2005.

Welcoming Mr Fitzsimmons to the board, HBF Executive Chairman Stewart Baseley said:

"These are critical times for the home building industry and the HBF is at the forefront of negotiations with a wide range of stakeholders on issues that will affect the industry during the current downturn and beyond. To enable us to effectively represent our industry, especially in these turbulent times, we need experienced industry professionals with a proven track record. Neil clearly has those attributes, which when added to the skills of the existing board members will help make the HBF an even more effective voice for our industry."

Member Briefing - London Mayor's Housing Strategy

HBF have produced a member briefing, providing a summary and analysis of the London Mayor's Housing Strategy announced last week.

Download a copy of the briefing

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

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 http://www.habitatforhumanity.org.uk/hopehome.htm

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/

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Rosie Hinchliffe

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