HBF Wales Weekly News Summary Friday 5 December 2008

Friday, 5 December 2008Top stories this weekQueen's Speech.....read more Bank of England reduces Bank Rate to 2.0%.....read more

Bank of England: Lending to individuals October 2008.....read moreLand Registry: Average house price drops 10% in October to £165,529.....read moreQuick LinksWales news Government and political news Economic news Housing market news Industry news Events Wales newsHBF attends third Economic Summit

HBF has today taken part in the third Economic Summit for Wales held by the First Minister Rhodri Morgan. We briefed the Summit on the latest situation in the home building industry and argued for a structured set of interventions to support the market. Ministers published a report summarising the actions they have taken generally so far and promised to continue to hold Summit meetings in the new year.

Funding to boost housing market in Wales announced by Assembly Government

In response to the current economic climate, the Welsh Assembly Government has announced a £42m funding package, subject to full business case approval, to boost the creation of affordable housing in Wales, giving a vital stimulus to the construction industry and helping the most vulnerable home owners in Wales.

The new money will be given to local authorities to create up to 500 new affordable homes. The funding will allow housing associations to make the most of current opportunities and buy units from private contractors.

to topMulti-million pound plans announced to create Europe's largest low carbon zone

Plans for an ambitious multi-million pound programme to improve energy efficiency in homes across the Heads of the Valleys and develop Europe's first low carbon zone have been announced.

The HoV Low Carbon programme is designed to tackle child poverty and fuel poverty - both commitments in the One Wales programme - and will introduce energy reduction measures that have never been undertaken on this large scale in the UK before.

Leighton Andrews, Deputy Minister for Regeneration, said it was anticipated that the fifteen year initiative would ultimately attract tens of millions of pounds of investment.

World's second biggest wind farm gets approval

The world's second biggest wind farm will be built off the Welsh coast, the Government announced yesterday.

The go-ahead for the Gwynt Y Môr development will see 250 165-metre high turbines built off the coast of North Wales.

It will be the largest wind farm in the world after the London Array project, currently being built in the Thames estuary.

New transport system for Wales

The plan to create better transport links across Wales, through road and rail, has been mapped out by the Deputy First Minister and Minister for Economy and Transport.

In announcing his new road and rail forward programme, Deputy First Minister and Minister for Transport Ieuan Wyn Jones set out his plans for moving towards a more integrated transport system for Wales.

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Government and political newsQueen's speech

The royal address, which marks the start of a new session of parliament, was delivered by the Queen this week. The Queen's Speech outlined 14 Government Bills designed to show that the Government will help families and businesses through 'difficult times'. Bills of interest to the industry are outlined below:

The Banking Bill: The Prime Minister has confirmed to MPs that the Government is to put the "Treating Customers Fairly" banking code on a statutory footing. The Bill also includes provision on deposit protection. The Bill also strengthens the Bank of England's role in maintaining financial stability by giving it a "statutory financial stability objective" alongside its other legal objective of running monetary policy;

Local Democracy, Economic Development and Construction Bill: The Bill will contain duties placed on local authorities and regional development agencies to assess local economic conditions, produce a single integrated regional strategy (implementation of the Sub-National Economic Review), promote democracy and respond to petitions. The Bill will also amend the Housing Grants, Construction and Regeneration Act 1996 to improve the cash flow and adjudication of construction contracts;

Children, Skills and Learning Bill: The Bill will provide an apprenticeship place for "suitably qualified" young people from 2013. This combines the draft Education and Skills Bill with the draft Apprenticeships Bill launched earlier in the year. The Bill puts Ofqual on a statutory footing to safeguard standards and maintain confidence in the exams and qualifications system by regulating it. Local authorities will have to ensure that by 2013, all 17 and 18 year olds are in full time education or training and will have responsibility for finding suitable education for young offenders. Skills Secretary John Denham said that in five years he wants every school leaver who has achieved basic maths and English skills to have the right to an apprenticeship;

Business Rates Supplement Bill: Local authorities will gain the power to levy a local supplement to the business rate and retain the proceeds for economic development. Authorities will be able to set a supplement on the current national business rate of up to 2 pence in the pound of rateable value. The Bill makes provision to exempt business properties with a rateable value of £50,000 or less.

Read the transcript of the Queen's speech

to topPrime Minister announces further help against risk of repossession

In his own speech following the Queen's Speech, the Prime Minister announced that mortgage holders who suffered redundancy or a significant loss of income would be able to defer a proportion of their interest payments as an additional measure to limit the risk of repossession. He said the Government would underwrite relevant mortgage payments for up to two years for people facing repossession, with the eight leading UK lenders having committed to this proposal. The full details of the "Homeowner Mortgage Support Scheme" will be agreed in further discussions with the lenders in coming days with a view to it being available to customers early in the New Year.

Click here to see the Government's press release

Homes and Communities Agency and Tenant Services Authority launched

The new Homes and Communities Agency (HCA) and Tenant Services Authority (TSA) were officially launched by Housing Minister Margaret Beckett on Monday.

The HCA will now be the single delivery body responsible for regenerating communities and delivering affordable homes. The TSA is the new regulator for social tenants.
Housing Minister Margaret Beckett said:

"The Home and Communities Agency will be crucial in delivering the new homes and regeneration projects we have pledged.

"It has a vital role to play in supporting communities and industry in the current economic climate, and will bring together land, money and skills to build more homes and regenerate communities into one single body for the first time.

"The Tenant Services Authority will give millions of social tenants more say in the provision of their housing, ensuring they get a fairer deal, and making sure action is taken to improve homes and estates."

to topHBF welcomes new HCA "Opportunity to boost house building must not be wasted"

The HBF welcomed the official launch of the new Homes and Communities Agency (HCA) but warned that the opportunity this presents to maximise the benefits of public money must not be wasted, with increasing numbers of people desperate for a home.

Representatives from HBF are already working closely with senior HCA officials to find ways of using the estimated £17bn budget it will control over the next three years to deliver much needed housing in today's very challenging market.

HBF believes the current economic situation dictates that the new agency needs to bring forward significant amounts of its budget as a matter of urgency to help maintain housing supply and industry capacity.

Stewart Baseley, Executive Chairman, commented:

"We are already working closely with Sir Bob Kerslake and his team to establish how together we can increase the supply of housing of all types in the current economic climate and ensure the public purse gets the maximum bang for its buck. The new agency needs to be allowed to find ways of speedily reallocating the money in its budgets that the economic crisis means cannot be spent as planned, to kick start new housing projects. By doing so, they will both ensure desperately needed housing supply is maintained, and house building industry capacity will be protected - something vital for housing provision both now and for when we emerge from the current downturn. I look forward to working with Sir Bob and his team and wish them well."

to top Economic newsBank of England reduces Bank Rate to 2.0%

The Bank of England's Monetary Policy Committee voted to reduce the official Bank Rate paid on commercial bank reserves by 1.0 percentage points to 2.0%.

At its December meeting, the Committee judged that, at the existing level of Bank Rate and looking through the volatility in inflation associated with the movements in Value Added Tax, there remained a substantial risk of undershooting the 2% CPI inflation target in the medium term. Accordingly, the Committee determined that a further reduction in Bank Rate of 1.0 percentage points to 2.0% was necessary in order to meet the target in the medium term.

The minutes of the meeting will be published at 9.30am on Wednesday 17 December.

to topCML response to rate cut

The Council of Mortgage Lenders has welcomed the rate cut by the Bank of England. CML Director General Michael Coogan said:

"Lenders want to help their borrowers, both those who are in difficulty and those who are not. This will help to support the wider economy, and ultimately strengthen their businesses too.

"But the practicalities are complex, and lenders are trying to achieve a range of potentially conflicting objectives at the same time. They are simultaneously trying to build up greater levels of capital and liquidity, help borrowers in difficulty and reduce repossessions, keep rates as low as possible for borrowers and as high as possible for savers in a very low interest rate environment, support new lending, and pay the significant costs of the recapitalisation scheme which have fallen across a wider range of lenders than just the recapitalised banks themselves.

"As we have said before, not all lenders are the same. It is not realistic to expect them all to react in the same way to the rate cut - although where they believe they can cut mortgage rates, they will. To achieve its objectives to support the housing market, the Government needs to engage with all lenders, not just the very largest, and we look forward to helping with this."

Bank of England: Lending to individuals October 2008

The Bank of England reported this week that the increase in total net lending to individuals in October (£1.3bn) was lower than the September increase and the previous six-month average. The twelve-month growth rate slowed further, to 4.7%, and the three-month annualised growth rate fell by 0.8 percentage points to 1.2%.

Within the total, the increase in net lending secured on dwellings (£0.5bn) was lower than the September increase and the previous six-month average. The twelve-month growth rate slowed further, to 4.5%. The three-month annualised growth rate fell by 0.8 percentage points to 0.7%. The numbers of loans approved for house purchase (32,000) and for other purposes (34,000) were lower than in September. The number of approvals for remortgaging (72.000) was higher than in September.

to topBuilding Societies' lending remains low

Net mortgage lending by building societies was £413m in October, an improvement compared to £314m in September, but still 45% lower than the figure for October last year, according to figures released by the Building Societies Association (BSA). Gross mortgage lending by building societies was £3.2bn, a decline of 30% on October 2007.

Commenting on the figures, Adrian Coles, Director General of the BSA, said:

"With the depressed state of the housing market, it is no surprise that mortgage lending by societies remains low, albeit slightly improved in September. With confidence in the market so restrained, homeowners are choosing to stay put rather than move, while first time buyers continue to wait for further falls in prices."

to top Housing market newsLand Registry: Average house price drops 10% year on year in October to £165,529

House prices in England and Wales fell by 10.1% year on year in the October figures from Land Registry. The average house price is now £165,529 representing a decrease month-on-month of 1.5%.

London experienced an annual decrease in its average property value with a movement of -8.6%, taking the average London house price to £320,774.

Every region in England and Wales experienced a decrease in their average property values. The West Midlands sustained the smallest monthly price fall at -0.6% while Wales underwent the biggest decrease at -2.8%.

The most up-to-date figures available show that during August 2008 the number of completed house sales fell by 64% to 45,437 from 124,517 in August 2007.

to topHalifax house price index

The Halifax house price index released this week reported that:

House prices fell by 2.6% in November; House prices in November were 14.9% lower on an annual basis. The UK average price has returned to the level in July 2005 (£163,445); The house price to average earnings ratio has fallen from a peak of 5.84 in July 2007 to an estimated 4.56 in November 2008. The ratio was at its lowest level for more than five years (July 2003: 4.54). The long-term average is 4.0;The UK average house price was 124% higher than ten years ago. The current average price was more than £90,000 higher than in November 1998 (£73,129);The number of mortgages approved to finance house purchase was broadly unchanged for the fourth successive month in October at a seasonally adjusted 32,000. The recent flattening off in approvals suggests that housing market activity may be stabilising.

Commenting, Martin Ellis, Chief Economist, said:

"There was a 2.6% decline in average UK house prices in November. The combination of high house prices in relation to earnings, constraints on householders' incomes and spending power and the decline in the availability of mortgage finance since the summer of 2007 has curbed housing demand. These factors are major contributors to lower house prices and activity.

Lower house prices, however, mean that a key housing affordability measure - the house price to earnings ratio - is at its most favourable for over five years at 4.56. There are also signs that the pressures on incomes may be beginning to ease. Retail price inflation has started to decline and is likely to fall significantly over the coming months, helped by lower energy prices and weaker food price rises."

to topHometrack: House prices down 8.1% over last 12 months and transaction volumes close to bottoming out

According to figures released by Hometrack this week, property values are now at a level last seen in January 2006 - average property prices have fallen by 8.1% over the last 12 months. However, the time taken to sell a home fell for the first time in 18 months from 11.9 weeks to 11.8 weeks in November.

Overall conditions may remain weak, but the Hometrack survey highlights the fact that there are hundreds of different housing markets each performing differently. In Wales for example two fifths of postcodes have an average time to sell in excess of 3 months, this compared to just 10% in the south East.

Similarly 22% of postcodes in Wales registered an achieved asking price lower than 85% (the average stands at 88.9%), this was followed by 14% of postcodes in the North East and just 4% in London. On a regional basis, the largest price falls over the last year have been seen in London (-9.5%) and East Anglia (-9%) where prices have fallen off a high base.

The indicators from the latest Hometrack survey point to a continued fall in property prices in the short term. A weak economic outlook and limited availability of mortgages are set to keep prices under downward pressure in 2009.

Despite this however, transaction volumes may be close to bottoming out. The market has been stripped back to a relatively small number of committed buyers able to access finance, and needs based sellers who are having to become realistic on pricing.

CBI - ‘Retailers don't expect Christmas will bring them much cheer'

According to the latest CBI Distributive Trade Survey, high street sales volumes fell more sharply than feared over the year to November, and retailers expect that the Christmas shopping period will be especially slow. The survey also revealed that the retail sector has cut investment plans substantially, amid predictions that the business situation will worsen. Employment conditions remained weak over the year to November.

to top Industry newsCommittee on Climate Change recommends a minimum 34% cut in greenhouse gas emissions by 2020

The Committee on Climate Change (CCC) has urged the Government to commit unilaterally to reducing emissions of all greenhouse gases in the UK by at least 34% in 2020 relative to 1990 levels (21% relative to 2005). The CCC says that reaching this target is necessary to contain the threat of climate change.

The CCC's first report, "Building a low carbon economy", sets out how the proposed carbon budgets can be met using existing technologies and by putting in place a range of policies to move towards a low carbon economy.

Download a copy of "Building a low carbon economy"

to topNew CIH North East manifesto for housing

A new manifesto for housing from the Chartered Institute of Housing (CIH) North East calls for a greater emphasis on transformation of the region's existing housing stock and more support for elderly and deprived residents.

The manifesto was launched at the CIH's annual conference in the North East on 13 November and sets out a range of proposals including calling for a Regional Forum that could give a unified voice to the region and allow a single conversation to take place on housing and regeneration.

The Housing Forum and NHBC form new collaboration

The Housing Forum has joined forces with NHBC in a move to strengthen housing industry support during one of the most critical periods in its recent history.

The new collaboration will see the Housing Forum move from the umbrella of Constructing Excellence to expand its work in the housing sector, increase its focus on sustainability in housing and extend its activities to Wales, Scotland and Northern Ireland, areas where NHBC is already very active.

Announcing the new relationship Jeffrey Adams, Chairman of the Housing Forum said:

"We are delighted to be working alongside NHBC, which played a key role in our formation almost 10 years ago and with whom we share many goals and priorities. Our new collaboration will give us the opportunity to expand our reach and build further on the achievements and reputations of both the Housing Forum and NHBC and will benefit the wider industry and its customers."

to top Events HBF 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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