HBF Wales Weekly News Summary Friday 9 January 2009

Friday, 09 January 2008Top stories this weekBank of England reduces Bank Rate by 0.5 percentage points to 1.5%.....read more £18m Bovis affordable housing deal approved.....read more

Halifax house price index.....read moreHometrack's forecasts for the housing and mortgage markets.....read moreBeckett to address HBF annual industry lunch.....read moreQuick LinksWales news Economic news Government and political news Housing market news Industry news HBF news Events Wales newsBroadcaster and bank advisor reappointed to Countryside Council for Wales

Former farming bank advisor and broadcaster Rod Williams has been re-appointed as a member of the Countryside Council for Wales (CCW), Environment, Sustainability and Housing Minister Jane Davidson announced this week.

Mr Williams was first appointed as a council member in January 2003 and will now work for a further three years with CCW.

In confirming the re-appointment Ms Davidson said:

"Mr Williams has made a strong commitment and contribution to the work of Countryside Council for Wales since his first appointment over six years ago. I am confident that he has the necessary skills and abilities to continue to help the Council meet the many challenges that it faces in the years ahead."

to topRICS Wales 7th building surveyors day

John Edwards, the chartered building surveyor behind the Cardiff Castle project, will discuss ways of solving property dilemmas at the RICS Wales Building Surveyors Day on 22 January.

Topics to include

Marketing Building Surveying services in the current climate - Paul Spaven, TFT ConsultantsDilapidations - Neil Gilbert, TFT ConsultantsProfessional Negligence - Iwan Doull, Berry Smith SolicitorsConservation - Friend or Foe? - John Edwards, TKB Southgate Associates45 years as a land surveyor - David PowellHidden perils in electrical installation - Graeme Wood, ECAPolicies, Strategies and Building Regulations - Jeff Perren, Welsh Assembly Government

to topCouncils pay £250,000 to clear backlog of outstanding planning applications

Welsh councils have paid third parties more than £250,000 in the last two years to clear backlogs in their planning processes.

A Freedom of Information request submitted by the Western Mail newspaper revealed six local authorities paid external companies to help ease their planning workload.

A Denbighshire spokesperson said:

"Over the past few years we have commissioned a planning consultant to assist the development control team.

"The number of applications the consultant deals with on a weekly basis will depend on the workload of the team and the availability of planning officers bearing in mind annual leave, sickness absence, and so on.

"I would not consider this arrangement to be ‘clearing planning application backlogs'. This is an arrangement we feel is more efficient than employing a full time planning officer, as it allows us flexibility especially in times of the current credit crunch when applications have declined."

to top Economic newsBank of England reduces Bank Rate by 0.5 percentage points to 1.5%

The Bank of England's Monetary Policy Committee this week voted to reduce the official Bank Rate paid on commercial bank reserves by 0.5 percentage points to 1.5%.

At its January meeting, the Committee noted that the recent easing in monetary and fiscal policy, the substantial fall in sterling and the prospective decline in inflation would together provide a considerable stimulus to activity as the year progressed. Nevertheless, the Committee judged that, looking through the volatility in inflation associated with the movements in Value Added Tax, there remained a significant risk of undershooting the 2% CPI inflation target in the medium term at the existing level of Bank Rate. Accordingly, the Committee concluded that a further reduction in Bank Rate of 0.5 percentage points to 1.5% was necessary to meet the target in the medium term.

The minutes of the meeting will be published at 9.30am on Wednesday 21 January.

to topCML responds to Bank Rate cut

Responding to the MPC's decision to reduce the Bank rate by 50 basis points to 1.5%, CML Director General, Michael Coogan said:

"This cut is a double-edged sword for retail based lenders. While lower mortgage rates provide borrowers with the opportunity to repay their mortgage debt more quickly to reduce the term, lower savings rates impact lenders' ability to attract deposits and maintain the flow of mortgage lending in 2009.

"The market is still not functioning properly and is likely to lead to a fragmented approach by lenders, as they try to balance the interests of savers and borrowers and other pressures on their businesses, in responding to today's announcement."

to topBuilding Societies' Association comments on Bank Rate cut

Adrian Coles, Director-General of the BSA said:

"Being owned by their customers means that building societies want to offer the lowest mortgage rates and highest savings rates possible. However, the Bank Rate reaching such an unprecedented low raises a number of challenges for them.

"Mortgage rates are determined by a number of factors, not just the Bank Rate. These include trends in money market rates and the requirement to fund part of the Icelandic and Bradford and Bingley bailouts, while many mortgages also feature collars that will prevent mortgage rates mirroring today's base rate cut.

"However, it is savers who will bear the brunt of today's decision. Already savers have seen their interest payments cut as a result of earlier base rate reductions and while societies will want to help their saver members where they can, it will be difficult for them to ignore completely today's announcement."

to topRICS comment and analysis on the Bank's interest rate decision

The Royal Institution of Chartered Surveyors' comment on the Bank of England's interest rate cut:

"The decision to lower interest rates to just 1.5%, while welcome, is unlikely to provide any meaningful encouragement for banks to increase the availability of finance to either households or businesses.

Indeed, the risk is that lenders are set to become even more restrictive over the coming months in the face of the worsening economic climate.

With many first time-time buyers unable to find the finance to take an initial step onto the housing ladder and existing owner-occupiers needing to move similarly blighted, the time has come for the government to take direct action to restore an orderly property market.

The gap between new buyer enquiries and the number of mortgage approvals is increasing. "

to topBank of England: Credit Conditions Survey Q4 2008

The Bank of England's Credit Conditions Survey covers secured and unsecured lending to households and small businesses; lending to non-financial corporations and to non-bank financial firms. The Survey reported that:

Lenders reported that they had reduced the availability of secured credit to households in the three months to mid-December 2008. As in the Q3 survey, expectations for house prices and concerns about the economic outlook were reported to have been factors contributing to this tightening. A further decline was expected over the next three months;

Unsecured credit availability to households was reported to have been reduced in line with expectations. A further fall was expected;

Corporate credit availability had been tightened over the past three months. Lenders anticipated a further fall in the next three months;

Demand for secured lending for house purchase and remortgaging was reported to have remained broadly stable over the past three months, in contrast to lenders' expectations. Demand for other secured lending was reported to have fallen;

Default rates, and losses given default, on secured lending to households were reported to have risen over the past three months. Lenders expected a further increase in both default rates and losses given default on household secured borrowing.

Download a copy of the Credit Conditions Survey Q4 2008

to top Government and political news£18m Bovis affordable housing deal approved

An £18m deal to provide more affordable housing was announced this week, as part of the Government's programme of action to tackle current difficulties in the housing market.

The deal was through the Government's National Clearing House with Bovis Homes. The Clearing House enables house builders to sell their unsold stock to Housing Associations for use as affordable housing, either for rent or low cost home ownership. This is the largest deal so far agreed with a major house builder through the Clearing House programme.

The deal provides 379 affordable homes on sites across the country for families who would otherwise be on waiting lists, following the agreement between the Homes and Communities Agency, Bovis Homes, and a number of housing associations.

Housing Minister Margaret Beckett said:

"We are determined to support house builders to weather the current difficult climate, and this deal will help industry while also providing more affordable homes for families on waiting lists.

"This is one part of a range of measures we are taking to help ensure stability and security for those affected by the downturn, and we will continue to look at what more we can do."

to topClegg reveals Liberal Democrat general election team

Liberal Democrat Leader Nick Clegg this week announced his team for the next general election.

He said:

"I am proud to lead the best front-bench team in British politics, a team which has consistently been ahead of the curve on the big debates that matter to the British people.

"This team leaves the Liberal Democrats well placed to take the fight to both Labour and the Conservatives in the run-up to the General Election and to bring about the change that Britain needs."

The new roles are:

Simon Hughes Shadow Secretary of State for Energy and Climate ChangeSteve Webb Shadow Secretary of State for Work and PensionsDavid Heath Shadow Leader of the HouseJenny Willott Shadow Chancellor of the Duchy of Lancaster David Howarth Shadow Secretary of State for Justice

to top Housing market newsHalifax house price index

The Halifax house price index, published on 2 January, reported that:

House prices fell by 2.2% in December to an average of £159,896;

House prices nationally declined by 5.2% in Quarter 4. This was similar to the decreases recorded in the two previous quarters (-5.6% in Quarter 3 and -5.1% in Quarter 2), suggesting that the underlying rate of decline may be stabilising;

House prices in December were 16.2% lower on an annual basis. The UK average price had returned to the level in August 2004 (£159,799);

The house price to earnings ratio - a key affordability measure - was at its lowest for five and a half years. The house price to average earnings ratio had decreased to an estimated 4.44 in December 2008 from a peak of 5.84 in July 2007;

Housing market activity showed signs of stabilising, albeit at a low level. 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. Estate agents reported the first increase in newly agreed sales for 18 months in November and the first rise in new buyer enquiries since October 2006. (Sources: Bank of England and RICS).

Commenting, Martin Ellis, Chief Economist at the Halifax, said:

"There was a 2.2% decline in average UK house prices in December. Continuing pressures on incomes and the negative impact of the dislocation of the financial markets on the availability of mortgage finance are expected to exert further downward pressure on the market over the coming months.

"But a number of factors will help to support demand and should help to limit the downturn. Improving housing affordability and an easing in the pressure on the majority of households' finances should support market activity and prices. The house price to earnings ratio - a key affordability measure - is at its lowest for five and a half years."

to top Hometrack's forecasts for the housing and mortgage markets

The key points of Hometrack's forecast, published 23 December, are as follows:

The rapidly changing outlook means that no-one can accurately predict how much property prices will fall in the short to medium term. There are a range of diverse scenarios for the economy in terms of the prospects for growth, inflation and borrowing which could result in very different outcomes for the housing market. Hometrack's forecasts represent a central view of a market adjusting from aspirational to pure needs based pricing;

Following an expected 9% decline in average prices over 2008, prices are projected to fall a further 10% in 2009 and decline by 3% over 2010. These forecasts are based on the Department for Communities and Local Government (DCLG) house price index which is based on actual prices achieved and has one of the largest monthly sample sizes of the main published indices.;

The projected decline in house prices over 2009 will put affordability - in terms of average debt servicing costs - on a par with the lows seen in the early 1990s.;

The forecast implies a peak to trough fall of 22%. For homeowners - who tend to base price changes against 'what they believed they could have put their home on the market for' in 2007 - it will feel more like a 30% fall once asking prices are taken into account;

The volume of open market transactions across Great Britain are set to fall a further 12% to 685,000. This follows a 45% decline in sales volumes over 2008;

Turnover as a proportion of housing supply will be at record lows in 2009. The turnover rate next year will equate to the average household moving once every 31 years, double the average of the last decade;

Net mortgage lending growth of £15bn in 2009, this is down from £39bn in 2008 and a peak of £108bn in 2007;

to topRICS Housing Forecast 2009: ‘House prices to remain depressed'

House prices look set to fall further in 2009, resulting in a peak to trough price decline of at least 25%, says the RoyaI Institution of Chartered Surveyors' (RICS) housing market forecast published on 23 December 2008.

The on-going caution of lenders and the worsening economic climate is likely to result in a decline in house prices of around 10% over the next 12 months. However, recent RICS housing market surveys indicate transaction activity may have reached the bottom and we could see an increase in sales of more than 10% during 2009.

Commenting, RICS Chief Economist Simon Rubinsohn said:

"Lenders are likely to remain cautious in the near term in the absence of any ‘guarantees' on mortgage backed securities. This, coupled with an increasingly gloomy economic picture, suggests that house prices will continue to decline in 2009. However, transaction levels do seem to have hit a floor with some signs that opportunistic investors are returning to the market. We expect a modest rise in sales over the course of the next year from the very low levels seen in recent months.

"A major concern is the massive reduction in the number of new homes now being built. It is likely that there will be even fewer new starts in 2009 leading to a very real risk that a serious housing shortage will fuel another bout of volatility once the current crisis eases. Crucially, the policies are not yet in place to create a vibrant but sustainable housing market in the future."

to topNationwide: ‘2008 a difficult year for the housing market'

The Nationwide house price index, released this week, reported that:

House prices fell by 2.5% in December from £158,442 in November to £153,048;The annual rate of fall reached 15.9%, down from 13.9% the previous month;The outlook for 2009 was subdued, but low supply will play a part in recovery.

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

"The price of a typical house fell by 2.5% in December, a stark contrast with the modest fall of 0.4% in November. This brings the annual rate of fall over the last twelve months to 15.9%. However the three-month on three-month rate, which smoothes the volatility often seen in the monthly numbers, shows a fall of only 4.2% in December. This is its slowest pace since May 2008. The price of a typical house is now £153,048, around the same level as of spring 2005, but still over £17,500 more than five years ago."

Download a copy of the Nationwide house price index

to top Industry newsGovernment announces funding for 35,000 additional apprentices

The Government will fund an additional 35,000 apprentices next year to strengthen the country's competitiveness and help beat the downturn.
It will invest £140m to deliver new and additional apprentices nationally in both the public and private sectors.

The Government is already committed to increasing spending on apprentices in the next year to just under £1bn and the £140m is in addition to that and will expand the programme even further over the next twelve months. It expects well over a quarter of a million apprentices to begin their training in the next financial year.

Skills Secretary, John Denham said:

"In the current economic climate it is vital we continue to provide young people with a clear path into skilled work. For many young people an apprenticeship will provide an ideal pathway to successful employment. We must make sure we can meet demand so that more people can benefit and earn while they learn. "

to top HBF newsBeckett to address HBF annual industry lunch

Housing Minister Margaret Beckett has this week agreed to address the HBF's annual industry lunch, which takes place on April 22 in central London. This maintains the tradition set by her predecessors Yvette Cooper and Caroline Flint, and will give her an opportunity to engage leading industry figures.

See below for details of how to book your place.

to top EventsHBF Policy Conference - Grant Shapps to speak.

Tuesday 17 March 2009, Central London

Shadow Housing Minister Grant Shapps heads a heavyweight list of speakers including housing expert John Callcutt, CML Director General Michael Coogan, Zero Carbon Hub Chief Executive Neil Jefferson and, fresh from completing the Killian Pretty review, David Pretty. Other speakers include Richard Donnell, Christopher Hill and industry recognised experts from HBF's own policy team.

The conference will be chaired by HBF Executive Chairman Stewart Baseley and will look at a range of issues and challenges currently facing the industry.

For more information please contact the events team on 020 7960 1646 or events@hbmedia.co.uk

to topHBF Annual Industry Lunch 2009 - Beckett to address.

Wednesday 22 April, Central London

Housing Minister Margaret Beckett will address this year's HBF Annual Industry Lunch that will take place on Wednesday 22 April. Further details and a booking form are available please click here. Alternatively contact the events team for further details 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.

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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/

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Rosie Hinchliffe

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