Top stories this week *Bank of England maintains Bank Rate at 5.0%....read more *Halifax May Index - prices fell by 2.4%.....read more *HBF meet No. 10 staff to discuss housing market.....read more
Top stories this week
Bank of England maintains Bank Rate at 5.0%....read more
Halifax May Index - prices fell by 2.4%.....read more
HBF meet No. 10 staff to discuss housing market.....read more
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Bank of England maintains Bank Rate at 5.0%
The Bank of England's Monetary Policy Committee voted this week to maintain the official Bank Rate paid on commercial bank reserves at 5.0%.
CML - rate hold decision "no surprise"
CML director general, Michael Coogan commented:
"We expected the MPC to hold rates today as it wrestles to control rising inflation in a weaker economic outlook.
"But clearly there are still affordability pressures on borrowers and a widespread funding shortage for lenders. We hope that as the effects of the Bank of England's liquidity scheme feed through the financial system there will be some benefits for mortgage lenders, and in turn borrowers, later in the year."
HBF call for 0.5% interest rate cut
In a press release issued on Wednesday, the day before the announcement, HBF said that a half percent cut in interest rate is now imperative or rapidly deteriorating conditions in the housing market risk causing a serious economic slowdown, a situation unique in living memory that needs a fresh approach.
John Stewart, Director of Economic Affairs at the HBF, commented:
"Previous economic crises have led to housing market slumps, but this time the cart is leading the horse, with the speed and depth of the downturn threatening a serious wider economic crisis. We just cannot rely on lessons learnt and solutions based on past downturns as this is a completely new situation in which we find ourselves."
HBF was invited to put its view across on Bloomberg and CNBC television ahead of the MPC's decision and John Stewart, Director of Economic Affairs, commented on the rate hold on BBC News.
NAEA calls on the Chancellor to ease pressure on the housing market through tax relief
Peter Bolton King, Chief Executive of the NAEA, said:
"The NAEA is calling on the Chancellor and Prime Minister to consider other options to give people a break such as a stamp duty holiday for first time buyers and temporary tax relief on the mortgage interest of people's primary residence. This would at least ease the difficulty that people in this country are facing and give them the confidence boost that is needed to the market to get back on a more positive footing.
"The housing market is vital for our economy and the Bank of England has to make a decision about interest rates. But what is clear is that interest rates are dislocated from the situation and that the banks are not passing on any interest rate benefits to customers, if anything the mortgage rates are getting tighter. Clearly, more action needs to be taken to ease pressure in the markets."
OECD backs the Bank's expected "no change" verdict on interest rates
OECD Economic Outlook number 83 released this week states:
"Given the extent to which inflation is expected to exceed the target, the Bank of England should leave policy interest rates on hold in the short term, in order to ensure that high inflation expectations do not become embedded. However, some further easing in policy rates is likely to be required further ahead, to avoid a significant undershooting of the target in the medium term as the economy slows."
Halifax: house prices fell by 2.4% in May, month-on-month
The Halifax House Price Index released this week showed:
House prices fell by 2.4% in May. Prices were 3.8% lower on an annual basis.
Price falls should be measured against the significant gains in recent years. UK prices increased by 79% over the five years to August 2007. The average UK price rose by more than £88,000 between August 2002 and August 2007.
The decline in prices is caused by the difficulties created for potential house purchasers by the rapid rise in house prices in the last few years, a squeeze on spending power and the reduction in credit availability. These factors have curbed housing demand.
High employment levels, low interest rates and a shortage of new homes support housing valuations. Employment increased by 117,000 in the three months to March compared with the preceding quarter and stands at a record high 29.54 million.
Commenting, Martin Ellis, Chief Economist, said:
"Price falls should be measured against the significant gains in recent years. The average UK house price rose by more than £88,000, or 79%, between August 2002 and August 2007."
CML - Borrowers in Scotland fare better in credit crunch than UK counterparts
New data from the CML shows that the credit crunch is so far having less of an impact in Scotland than in the rest of the UK. The shortage of funding is continuing to restrict the availability of mortgages across the UK. In Scotland there were 16,000 loans for house purchase in the first quarter of 2008, down 20% on the same period last year. In the UK as a whole, loans for house purchase fell by 40% in the same period.
RICS comments on Bank of England mortgage approvals
Simon Rubinsohn, RICS chief economist said
"The latest weak data on mortgage approvals highlights the continuing problems facing borrowers trying to secure finance to purchase property. Lenders are continuing to tighten up on the conditions accompanying new loans making it hard for first-time buyers to take advantage of the modest fall in house prices seen over the past few months."
Lenders outline steps to address credit crunch problems
The Council of Mortgage Lenders has written to the Chancellor of the Exchequer outlining the range of steps that lenders are taking to minimise the potential problems that may face some borrowers in the wake of the credit crunch.
CML members have committed to four significant specific measures, namely:
To analyse their existing arrears management policies and implement any changes identified as a result of the industry guidance that the CML is preparing.
To provide information for consumers on their own arrears management process to help borrowers understand what to expect and how they will be treated fairly.
To support the principle of a pre-action protocol for mortgage cases for use before court proceedings, providing an additional assurance that only appropriate cases go to court.
To inform borrowers in good time when they are coming out of initial deals onto higher rates with increased monthly repayments, and encourage them to make contact if a financial problem is likely to arise.
NLA develops guiding principles for sale and rent back
The National Landlords Association has developed guiding principles for its forthcoming Code of Practice for landlords involved in the sale and rent back market.
Research reveals 28.3% of young working households priced out of housing market
A new study into the national profile of housing affordability compiled for Hometrack, published 4th June, reveals that over a quarter (28.3%), of young working households in Britain are unable to access the very lowest rungs of the property ladder in their local market. The largest proportions of young working households unable to access the housing market are in London (41%) and the South West (40%).
RICS - Landowners are willing to sell for affordable rural housing
Nearly 40 percent of rural landowners would put forward land at below market value for affordable housing, says RICS research published 5th June 2008.
Chartered Surveyors report that clients (farmers and landowners) would put forward land for affordable rural housing at below the market value and would be more likely to sell if the buyer is a housing association or community trust. However, some would sell purely for altruistic reasons with many willing to put forward land for the benefit of the community. Clients were least likely to sell to a local authority and many would ignore encouragement to sell from local government.
Output and employment in the construction industry - Q1 2008
According to figures released this week by the Office of National Statistics, the total volume of construction output in the twelve months to the first quarter of 2008 rose by 2 per cent compared with the previous twelve month period. Overall new work rose by 4 per cent over the same period, with increases in public housing, infrastructure and private commercial new work. New private housing work was 5 per cent lower over the same period. Repair and maintenance work rose by 1 per cent over the same period with an increase in the private housing and non-housing sectors. Output in the first quarter of 2008 was unchanged compared with the fourth quarter of 2007 in volume terms.
The seasonally adjusted number of employees in employment in April 2008 was unchanged compared with January 2008 and was 2% higher when compared with April 2007. Total employment (including self-employed) in April 2008 was 1% lower compared with January 2008 but was 1% higher when compared with April 2007.
Launch of research into the growth potential of microgeneration
A consortium comprising BERR, RDAs, NGOs and elements of the microgeneration industry has published research to provide an evidence base to inform the future direction of microgeneration policy.
The research finds that the front end capital cost of microgeneration is the main barrier for householders and businesses in adopting it. The report also emphasises that the definition of zero carbon homes employed will be important in determining the take up of microgeneration in the period up to 2020.
The report points to the need for substantive public policy interventions to help reduce the initial capital costs of installing microgeneration.
Click here to read the full report
CLG publish Planning Policy Statement 12
Local leaders will have a stronger role in shaping the future development of our towns and cities under a new planning policy announced by Housing and Planning Minister Caroline Flint.
The new Planning Policy Statement 12 on local spatial plans means that local plans - which collectively map out the future development of the whole country - must now be more firmly based on a shared vision created with the involvement of public agencies, businesses, voluntary groups and local people.
Click here to read the Planning Policy Statement
Click here to read the accompanying plan-making manual
HBF Member Briefing - Planning Policy Statement 12: Local Spatial Planning
HBF have prepared a member briefing which is available here *(member only)
*If you have forgotten your login to access member only information on the website please type your email address in the 'forgotten password' box on the website by clicking here. If you are still experiencing problems please contact rosie.hinchliffe@hbf.co.uk
Major expansion of Planning Aid announced
Communities secretary Hazel Blears has announced a major expansion of Planning Aid to ensure that people have the advice, skills and professional support they need to have a proper voice in the planning process.
Hazel Blears commented:
"The Planning Reform Bill currently going through Parliament will give people a fairer say through public consultation, and at planning inquiries. But creating opportunities for public participation is not enough by itself.
"We need also to do more to support local communities and individuals, particularly those least able to put forward their case, with the advice and skills they need to engage effectively, which is where this new funding will provide direct help."
HBF meet No. 10 staff to discuss housing market
Stewart Baseley, HBF Director of Economic Affairs John Stewart and senior house builders met officials at 10 Downing Street this week to discuss the state of the housing market, the impact of conditions on new build and the measures we had previously proposed to the Treasury in our recent Housing Market Package. We impressed on No 10 the speed and scale of the downturn and emphasised what we see as the real downside risks to the wider economy if action is not taken to assist the housing market.
HBF Chairman's monthly update now available online
Please click here to view *(member only)
*If you have forgotten your login to access member only information on the website please type your email address in the 'forgotten password' box on the website by clicking here. If you are still experiencing problems please contact rosie.hinchliffe@hbf.co.uk
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.
HBF Annual Planning Conference 2008
Wednesday 10th September - The Kassam Stadium, Oxford
This year's conference will discuss the combined challenges of climate change and the new planning act. The day is designed to provide delegates with both vital knowledge from the plenary sessions and practical guidance through our interactive workshops on the Community Infrastructure Levy and the PPS1 supplement on Climate Change.
For further information please contact the events team on 020 7960 1646 or events@hbmedia.co.uk
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/
Rosie Hinchliffe