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HBF Wales Weekly News Summary Friday 30 May 2008

30 May, 2008

Top stories this week *Nationwide - house price falls accelerate in May *HBOS see no early end to wholesale funds crisis *Provisional 2007 Land Use Change statistics published

Top stories this weekNationwide - house price falls accelerate in May....read more

HBOS see no early end to wholesale funds crisis.....read moreProvisional 2007 Land Use Change statistics published.....read moreQuick LinksWales NewsHousing Market NewsEconomic NewsGovernment NewsPolitical NewsHBF NewsEventsWales NewsBlaenavon has best new building

The Royal Society of Architects in Wales (RSAW) has announced that Blaenavon World Heritage Centre is the sole recipient of a RIBA Award 2008 in Wales.

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to topHousing Market NewsNationwide - house price falls accelerate in May

Nationwide's House Price Index, released on 29th May, shows that:

House prices fell by 2.5% in MayPrices are 4.4% lower than this time last year, but remain 5% higher than 2 years ago

Fionnuala Earley, Nationwide's Chief Economist, commented:

"The pace of house price falls accelerated in May as more weak economic news added to the gathering momentum of negative sentiment about the housing market. House prices fell by 2.5% during the month, the largest recorded monthly fall in the history of the Nationwide monthly index. At seven months, this is also the longest consecutive period of monthly falls since 1992."

View Nationwide's House Price Index

to topOpposition spokesmen react to Nationwide figures

Reacting to the Nationwide index, Conservative Shadow Chief Secretary to the Treasury, Philip Hammond, said:

"The fall in house values is adding to the gloom that families already feel from soaring prices, stagnant earnings and seemingly endless tax hikes."

"Gordon Brown's economic mismanagement has undermined confidence in the British economy, leaving people worrying about how they will cope if things get even worse."

For the Liberal Democrats, Shadow Chancellor Vince Cable said:

"This freefall in house prices is becoming worryingly reminiscent of the Tory recession of the 1990s."

"The reality is that the housing market has been seriously overvalued for some time thanks to massive consumer debt."

"Even the Government now admits we will see a large correction over the next one or two years."

"With falling house prices and high mortgage costs there is a real danger that many people could find themselves in negative equity and under serious threat of repossession."

"It is essential that we protect families in danger of losing their homes, ensuring repossession is only ever an extreme last resort."

"Otherwise the housing market may well suffer the same massive crash that we saw under the last Conservative Government."

NAEA - National picture doesn't tell the whole story

Following the release of the Nationwide House Price Index , Peter Bolton King, Chief Executive of the National Association of Estate Agents (NAEA), said:

"The national sales figures do not tell the whole story. We know from our members that the picture is still very regional with some areas continuing to do better than others. Indeed, our recent survey of agents records some stability returning to the market in the number of sales agreed, the number of viewings before a sale is secured and the average difference between asking and sales price."

View the full statement

to topNAEA - "Property market stable but consumer confidence is still shaky"

The NAEA also issued its own April survey.

Chris Brown, President of the NAEA, commented:

"The figures from the April report suggest that the market is stable, however, consumer confidence is still dented. Properties supply is good but buyers are being cautious. It is apparent from the survey results that some people are adopting a ‘wait and see attitude', watching the market, before making any decisions. Many, especially first time buyers, will be feeling the results of the credit crunch and tighter lending leading to them being unable to move onto the ladder or up the chain. Some agents are also finding it difficult to stop sales falling through as people get ‘cold feet' or fail to secure mortgages but we must remember that this happens in the best of markets."

"However, what people need to remember is that the market is stable and we are not seeing massive price drops. There are still strong economic factors at play, such as high employment and low interest rates and sales are still taking place. Moreover, people need places to live and property purchase remains a good long term investment."

Read the full statement

Average house price down 0.5% over May

According to the latest national housing market survey from Hometrack average house prices were down by 0.5% over the month, following a 0.6% fall in the previous month. On a year on year basis the annual price change fell to -1.9%, from -0.9%, the lowest level since November 2005 (-2.3%).

Richard Donnell, Director of Research at Hometrack, commented:

"It is too early to say whether the level of monthly falls will now start to moderate as this will require an improvement in demand and sales agreed which are both linked to overall buyer confidence. The current trends in the survey indicate that pricing looks set to remain under downward pressure over the coming months,"

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to topApril's mortgage lending slightly higher than in March (month on month)

The British Bankers Association released mortgage approval figures for April which showed:

Approvals for remortgaging were exceptionally strong in April Approvals for house purchase continued to be well down on the same period in 2007 - down 39% year on yearApprovals for equity withdrawal and other purposes continued at a relatively low level

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

"Pressures on household finances, stalling house prices and tighter lending criteria in response to lower liquidity are all constraining demand for house purchase and equity withdrawal loans, which are both well down on levels last year."

"In contrast, there is an active remortgaging market as people switch lenders to obtain better deals. With some £18bn of new lending and nearly 150,000 loans approved in April, it is clear that, contrary to some reports, the mainstream mortgage market has not ground to a halt."

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to topEconomic NewsHBOS see no early end to wholesale funds crisis

The Financial Times reported today that HBOS chief executive Andy Hornby has told a conference in Edinburgh that credit would remain constrained for up to 18 months.
Mr Hornby said:

"...we are planning on the basis that scale securitisation markets will not reopen this year and we'll have to wait until well into 2009 for the world to turn back to what people might term sensible normality."

He added:

"...the good news is that we are going into this downturn with far more cautious loan-to-value ratios than we did in the early 1990s [an average of 44% for HBOS]....as long as that unemployment number only increases moderately, the actual impact will be considerably lower than the type of impact we saw back in 1991 through to 1993".

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CBI - High street activity dropped for a second consecutive month

High street activity dropped for a second consecutive month in May, while retailers put prices up at the fastest rate since 1992, the CBI said this week.

Ian McCafferty, CBI Chief Economic Adviser, commented:

"The high street has faced another testing month as consumer spending power has been hit by the rising cost of fuel and food, as well as any credit crunch worries."

"It is encouraging that retailers can see some recovery in sales next month, but they are not optimistic about the business outlook, and retail conditions are likely to remain tough."

View the full statement

to topGovernment NewsProvisional 2007 Land Use Change statistics published

Key points in the initial release of Land Use Change statistics for 2007 published this week are:

On a provisional estimate, 75 per cent of dwellings were built on previously-developed land (including conversions). This compares to 76 per cent in 2006.

Provisionally, new dwellings are estimated to have been built at an average density of 45 dwellings per hectare. This compares to 41 dwellings per hectare in 2006.

In 2006 two per cent of dwellings were built within the 2007 Designated Green Belt. In 2006 five per cent of land changing to residential use (from any use including residential) was within the Green Belt. These figures are unchanged from 2005.

In 2006 ten per cent of dwellings were built within areas of high flood risk. In 2006 seven per cent of land changing to residential use was within areas of high flood risk. This compares to nine and six per cent respectively in 2005.

View the full Land Use Change Statistics Statistical Release

to topCLG announces new Chief Planner

The Department for Communities and Local Government has announced the appointment of Steve Quartermain as its Chief Planner.

Planning Minister, Caroline Flint said:

"This is an important appointment. The new Chief Planner will play a vital role shaping the future of planning.

"Steve Quartermain's appointment will be key to ensuring we work well with councils and local planners so the planning system delivers the best possible local plans that have high quality housing and infrastructure with environmentally friendly developments for communities.

"As Chief Planner Steve will also help drive forward our ambitions to improve the skills and capacity of planners across the profession."

Steve Quartermain is currently Executive Director of Hambleton District Council and has 29 years of planning experience. As President of the Planning Officers Society he has already represented the planning profession at a national level.

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to topPolitical News HBF welcomes Boris Johnson's reduction of Affordable Housing targets for developers

Sir Simon Milton, Boris Johnson's senior planning advisor, has announced plans to lower affordable housing targets in London to encourage more housing development.

John Stewart, Director of Economic Affairs at the Home Builders Federation, said:

"Simon Milton's comments offer a welcome way forward for delivering an increase in housing, the key to making housing more affordable. We hope he will also look to expand on the current narrow definition of affordable housing to incorporate other types of product, such as low-cost market housing which home builders can deliver without any need for public subsidy... These are often as affordable for first-time buyers as other tenures built through s106 agreements."

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to topHBF NewsJohn Slaughter, Director of External Affairs at HBF, appeared on Fox Business News this week discussing the state of the UK housing market

Watch again

to top
Event NewsHBF South West Ball - Saturday 7 June

Beaufort Polo Club, Tetbury

Further information and booking form

Water: Regulation changes and the Code - Practical Solutions

Tuesday 15 July, Thinktank, Birmingham

The Government is seeking a major step change in water efficiency in new homes.

This seminar will examine the proposals enshrined in the amended Building Regulations Part G now subject to consultation, as well as the water aspects of the Code for Sustainable Homes and ways of securing maximum points to achieve higher Code levels.

Book online

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