HBF Weekly News Summary Friday, 10th December 2010

Friday, 10th December 2010

Top stories this week

Localism Bill to be introduced on Monday.....read more

Grant Shapps announces further details of affordable housing reform.....read more

Energy Bill published to introduce the Green Deal.....read more

CML: October saw expected decline in mortgage lending.....read more

CPA: Construction recovery stalled until 2013.....read more

HCA writes to local authorities on its furture role.....read more

CALA homes judgment.....read more

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Government and political news

Localism Bill to be introduced on Monday

Both Eric Pickles and Grant Shapps confirmed yesterday that the Localism Bill would be introduced to Parliament on Monday morning, 13th December.

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Grant Shapps announces further details of affordable housing reform

Housing Minister Grant Shapps yesterday announced further details of the Government’s plans for reforming the provision of affordable housing. He confirmed that from 2011, housing associations will have an additional Affordable Rent option to offer households who need support. Affordable Rent properties will give housing associations the flexibility to offer fixed term tenancies to some new tenants at a rent level higher than social rent - with landlords able to set rents at up to 80 per cent of local market rents.

Landlords will be able to offer the new tenancies in return for investment agreements, which will enable them to raise funds to build more affordable housing. The flexible tenancies will be for new tenants only - the lifetime tenancies and succession rights of existing council and housing association tenants will not be affected.

The Affordable Rent model is the first step towards delivering wider reforms announced last month and to be included as part of the forthcoming Localism Bill.

Around £2bn of the £4.5bn the Government is investing to deliver up to 150,000 new affordable homes over the next four years will support the delivery of new Affordable Rent homes. Ministers intend to make the payment of grant funding conditional on transparency. Under the plans, Affordable Rent properties will be allocated in the same way that social rent properties are now. Existing lettings arrangements operated by councils and housing associations will continue to apply and properties for Affordable Rent will be made available through choice-based lettings where appropriate.

Early next year, the Homes and Communities Agency will publish a full framework document that will form the basis for bids from housing associations who are interested in offering Affordable Rent.

Housing associations will have the flexibility to convert vacant social rent properties to the new flexible tenancies at a rent level of up to 80 per cent of market rent - but only after they have reached an investment agreement with the Homes and Communities Agency about how additional rental income will be reinvested in delivering new affordable housing.

Grant Shapps said:

"With five million people languishing on waiting lists, it's clear we need to act quickly to completely overhaul the system for social housing. That's why today I am setting out the next steps towards a smarter system - one that ensures housing associations have the flexibility they need to target help at the people who really need it, for as long as they need it.

"While we will not change the arrangements for existing tenants, it's senseless to pretend, especially in times of economic hardship, that everyone accessing social housing is in the same boat, and needs a lifetime tenancy. Being able to offer a fixed-term Affordable Rent option will mean housing associations become even more effective in helping people get back on their feet, and ensure more affordable homes are built for every pound of taxpayers' money that is spent."

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Grant Shapps: Councillors being given more powers than ever to become local champions

In a speech to parents and students at Bishop's Hatfield School, Grant Shapps outlined the Government’s aim that through the Localism Bill councillors will be more powerful than ever before and become “local champions”.

He launched a national search for talented 'school gate mums and dads' to step forward to make real change to their communities.

Mr Shapps said:

"There are tens of thousands of people across the country - like the 'school gate mums and dads' - already doing great things for their local area. They have a track record of getting things done - whether fundraising, volunteering as Governors or running clubs.

"They have energy, passion, know what needs doing and go out and do it, and are networked like never before. But many would have never considered being a councillor and would be put off by the petty rules and mindless bureaucracy too often associated with being a councillor.

"Times are changing and Government is ending Whitehall's iron grip over local communities - pushing power down from Whitehall to your Town Hall and from Downing Street to your street.

"Local councillors will be placed centre stage with more clout than ever before to get things done for the communities they serve. After years of tying the hands of local councillors we are now setting them free.

"But we need talented people who can seize the opportunities this seismic shift in the balance of power presents. So my message to school gate mums and dads and other community champions is clear. Your Community Needs You. I know this talent show might be less glamorous than the X Factor but if you win the prize is huge. You will be able to make real changes to real lives in your own community."

Energy Bill published to introduce the Green Deal

The Energy Bill was published in Parliament yesterday. The main purpose of the Bill is to introduce the Government’s “Green Deal" as a new and radical way of enabling private companies to make energy efficiency available to all at no upfront cost. The Green Deal, due to start in 2012, will enable work to upgrade properties to be paid back from the saving on energy bills. It will be available for both household and business premises.

In publishing the Bill, Energy and Climate Change Secretary Chris Huhne also announced that tough rules to protect consumers when they insulate their properties would form part of the legislation.

Mr Huhne said:

“I’m confident the Green Deal will catch on with the public. It’ll make upgrading our nation’s draughty homes a no brainer. But I don’t want people to be hoodwinked by rogue traders or receive dodgy advice.

“Trust is important when it comes to having work done in our homes. Consumer protection will be built into the Green Deal from the word go. Accreditation, a quality mark, insurance-backed warranties – there’ll be no place for cowboys to get a foothold in the Green Deal.

“When it comes to making our homes warmer and cosier, Britain’s a laggard. The Green Deal is about taking the hassle and upfront cost out of making your home more energy efficient.

“The Green Deal’s also a great business opportunity and shows we’re serious about the green industries of the future.”

Key highlights of the protection measures include:

All customers will receive accredited advice on how to make their property more energy efficient;

The Green Deal measures must be installed by an accredited installer working for a reputable company;

Rules will prevent customers being subjected to unfair or misleading selling practices;

A ‘Green Deal’ quality mark to ensure trust in the scheme;

Insurance-backed warranties to cover the work so consumers are covered if there are faults with the advice or installation of measures;

A competitive market for Green Deal delivery which enables new market entrants, like high street retailers, builders’ merchants or local authorities, to be advisers, providers and accredited installers.

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Committee on Climate Change recommends 60% emissions cut by 2030

In its latest report published earlier this week, the Committee on Climate Change – which advises the Government on the steps needed to achieve the UK’s binding target for reducing greenhouse gas emissions (GHGs) by 80% by 2050 – has recommended a carbon budget for 2023-27 and a target for emissions reductions in 2030 – halfway between now and 2050. It recommends a target for 2030 of cutting emissions by 60% relative to 1990 levels (46% relative to current levels). This would then require a 62% emissions reduction from 2030 to meet the 2050 target in the Climate Change Act.

In order to achieve deep emissions cuts required in the period to 2030, the Committee recommends that the carbon budgets currently in legislation (which cover the period up to 2022) should be tightened to reflect a 37% reduction in GHGs in 2020 relative to 1990 (from the currently legislated 34% cut), which could be raised further again to 42% once the EU has moved to more ambitious climate change targets.

The Committee calls amongst other things for “National transformation of homes and non-residential buildings” which it says could see many more homes better insulated, with half of all homes that have leaky solid walls insulated by 2030 (3.5 million), and almost 30% of all households using heat pumps (a low-carbon technology) to heat their homes rather than conventional heaters. It says there may in addition be a role for district heating systems using waste heat from low carbon power stations.

The Chair of the Committee on Climate Change, Lord Adair Turner said:

“We are recommending a stretching but realistic fourth carbon budget and 2030 target, achievable at a cost of less than 1% of GDP. Any less ambition would not be compatible with the 2050 target in the Climate Change Act. We therefore urge the Government to legislate the budget that we have recommended, and to develop the policies required to cut emissions over the next two decades.”

“The case for action on climate change is as strong as ever: climate science remains robust and suggests that there are very significant risks if we do not cut emissions. And countries acting now will gain economic benefits in an increasingly carbon constrained world.”

Please click here to read the report’s analysis and recommendations on the built environment.

Publication of resource document “delivering sustainable transport solutions for housing growth”

A report on the lessons learned from Local Communities looking to tackle transport challenges through early planning and designing of sustainable transport measures to encourage behaviour change has been published. The work looks at real transport concerns and lessons learnt from 15 Local Authorities with significant housing growth ambitions. This report also includes a selection of case studies from commercial organisations.

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Housing market news

CML: October saw expected decline in mortgage lending

An expected decline in mortgage lending towards the end of the year has now become apparent, data released by the Council of Mortgage lenders shows. Lending for both house purchase and remortgaging were affected by a lull in activity in October. There were 46,000 loans for house purchase (worth £6.7bn), down 4% in number and 6% by value from September. The total was 16% lower (12% by value) than in October 2009, but lending numbers in the final quarter of 2009 were boosted as buyers brought forward transactions to take advantage of the stamp duty holiday.

Remortgaging showed a similar pattern, with 26,000 loans (worth £3.1bn) advanced in October, down 9% (11% by value) from September, and 21% lower (24% by value) than in October 2009.

There were 17,000 loans to first-time buyers in October, worth £2bn, a decrease of 5% by volume and 9% by value from September, and 19% by volume and 17% by value on a year ago. Home movers were similarly affected, with the 29,400 loans (worth £4.7bn) advanced, representing a 3% drop by volume (6% by value) from September, and a 14% reduction by volume (10% by value), compared to October 2009.

Loan-to-value ratios appear to have eased in October. On average, first-time buyers borrowed 80% of the property's value in October, up from 76% in September. But the average income multiple to a first-time buyer declined to 3.19 from 3.26 in September. This is partly explained by the recent fall in house prices leading to lower loan amounts being advanced for house purchase. The same applied to movers. The average loan-to-value for movers was 69%, up from 67% in September, while the average income multiple was 2.84, down from 2.89 in September.

Michael Coogan, Director General of the CML, commented:

“With 2009 lending levels artificially inflated by the end of the stamp duty holiday, we expected to see a decline in lending year-on-year, so today’s figures are not surprising. Consumer confidence has also been affected by October's spending review, despite the relative affordability of monthly mortgage payments, and so a stable but small lending market will continue for some time to come."

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NAEA: Lending and interest rates key to success of housing market in 2011

The National Association of Estate Agents (NAEA) this week revealed its predictions for the UK property market over the next 12 months.

NAEA Chief Executive Peter Bolton King predicted the rise of ‘postcode power’ - as premium areas emerge from the slump at a faster rate than others.

Any recovery, he warned, will be strongly dependent on the major lenders making mortgage finance more available. Bank of England decisions on interest rates will also have a major effect on the market. The monthly wait for the MPC’s decision on interest rates will be a nervous time for both existing and potential borrowers.

However Mr Bolton King said that, while the housing market faces a tough year, he was confident that no widespread drop in house prices would occur.

He said: “The housing market remains in a state of fragile recovery as the year ends. Frankly, however, this recovery is threatened by the stubborn refusal of major lenders to loosen their self-serving restrictions on mortgage lending.

“A historically low rate of interest has benefited those people who already have a mortgage, but it is likely that over the next 12 months it will rise. That will place more pressure on existing borrowers but also remove mortgages from the reach of even those house buyers with large deposits.”

He added: “We do not believe that there will a widespread fall in house prices over the next 12 months. There will be ups and downs, but I’m confident that we won’t see a plunge.

“What we will see is the emergence of ‘postcode power’ – as demand for property in some areas fuels a healthy market while other, less desirable areas, are in danger of being left behind.”

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Industry news

Neighbourhood Planning Vanguards scheme

Local authorities in England have been invited to apply to become Neighbourhood Planning Vanguards. CLG are looking for around a dozen places - a range of rural and urban, prosperous and in need of regeneration – to test how neighbourhood planning will work in practice prior to the legislative changes of the Localism Bill. The proposals must centre around the production of a local development plan or local development order and should work closely with a parish council or local community group in its production.

Bids from interested local authorities must be made by 14th February 2011. Successful bidders will be supported with a grant of up to £20,000.

Please click here for further information

CPA: Construction recovery stalled until 2013

The recovery in construction output experienced by the industry during much of 2010 will stall in 2011 according to the latest forecasts from the Construction Products Association (CPA), which were published this week. Industry output is expected to decline by 2% in 2011 compared with 2010, with a further fall anticipated in 2012. Further growth in output is not now expected until 2013.

Commenting on the latest forecasts, Michael Ankers, Chief Executive of the Construction Products Association said:

“The government has rightly focussed on the private sector playing a leading role in driving the UK’s economic recovery. Unfortunately, we do not expect the increase in private sector investment in construction over the next two years to compensate for the sharp falls in public sector investment. Although private sector construction is forecast to grow by 5% during the next two years, construction work from the public sector is expected to fall by 17%.

“By 2013, however, we expect to see strong growth in the commercial sector, combined with increasing construction activity related to housing, rail schemes and the development of energy infrastructure, leading to a recovery in construction output at the end of our forecast period.

“The government has acknowledged the importance of the construction industry to the economy, accounting as it does for 8% of GDP and employing 2.5 million people, by highlighting it as one of the six sectors for initial government action in its Growth Review published at the end of November. The increase in construction output in 2010 has been an important component of the growth in GDP over the last two quarters. Unfortunately, these latest forecasts show that construction is unlikely to provide the same impetus over the next two years and this will almost certainly slow down the rate of growth in the wider economy.”

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HCA writes to local authorities on its future role

The Chief Executive of the Homes and Communities Agency, Pat Ritchie, yesterday wrote to the chief executives of local authorities outlining the Agency’s future role in working with them.

In the letter Ms Ritchie states that:

“Our core business is now to support local priorities through four activities: investment in new housing and communities, providing enabling support to local partners, utilising our own and public sector land assets and, from April 2012, the economic regulation of registered housing providers (RPs).”

She adds:

“I am keen to ensure that our enabling skills be seen as a resource that local authorities can draw on to deliver local priorities. Our role will be different according to place and tailored to local need. We will provide specialist expertise to support your capacity through technical services across all areas of housing and regeneration, including master planning, economic appraisal, brownfield land and levering private investment through joint ventures and utilising public land assets. We will offer assistance to you in promoting general housing supply by advising on best use of mechanisms such as the new homes bonus and S106. We will also help in speeding up development, continuing to offer expertise in procurement and strategic support to local authorities and LEPs to respond to new policy initiatives.”

The letter also mentions that “DCLG has commissioned the HCA to work with RDAs and local partners to develop local strategies and disposal plans for RDA land and property assets.”

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Planners express concern over Localism Bill

Ann Skippers, President of the Royal Town Planning Institute (RTPI), said:

"The RTPI fully supports the principles of localism but we have real concerns whether the new system, as described, will deliver both the key housing, employment and services that make communities thrive - including good design, hospitals and affordable housing - and those that make communities work such as shopping centres, business parks, waste disposal sites, cemeteries and prisons. We are concerned that government briefing on the Bill does not demonstrate how elected local authorities can meet their responsibilities to plan for integrated sustainable development across their local areas let alone the wider than local areas where strategic policies and priorities are needed. The sooner we all see the published Bill, the sooner we will know whether these fears are justified.”

CITB-ConstructionSkills: Endorses drive for sustainable skills

CITB-ConstructionSkills, the Sector Skills Council for the construction industry, has welcomed the final Low Carbon Construction report from the government’s Innovation and Growth Team, headed by Paul Morrell, the Chief Construction Advisor.

ConstructionSkills notes that the final report has agreed with its own key recommendations, particularly on the need for a more proactive approach to support SMEs to develop their capacity and capability to respond to emerging low carbon markets. There was also agreement in the findings that the education sector would need to be repositioned over time to ensure new entrants to the Built Environment are more directly equipped to support the low carbon agenda.

Mark Farrar, Chief Executive for CITB-ConstructionSkills said:

“I’m pleased to see that the IGT’s final report has picked up on a number of recommendations made by us, including the need to support SMEs and to develop their capacity and capabilities to respond to the emerging carbon market; and to ensure that the curriculum in schools, colleges and universities adequately prepares new entrants for the low carbon challenge.

“The report rightly notes the scale of the challenge we face in reducing carbon from such a huge, complex and fragmented industry. It will take a top to bottom approach to introduce new low carbon skills and knowledge, and we are here to help support that challenge on a number of levels, from practical support and training, to the influencing of future standards and qualifications.”

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Gas Flues Update

On the 2nd December the HSE issued an updated safety alert regarding gas flues in voids. This provides updated information to the original safety alert issued on 2nd October 2008.

Please click here to view this updated safety notice.

The revised TB008 (edition 2) document entitled ‘Room-sealed fanned-draught/flue systems concealed within voids’ has also been released along with the TB008 (edition 2) CIP-RACL document entitled ‘consumer information pack and risk assessment checklist’

As these are only available on the Gas Safe website on their membership side we will be putting them on the HBF website under a gas safe logo in the Technical Section on Monday.

We will be also be putting out a Technical Note to members early next week.

These come into force from 1st January 2011.

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Economic news

Bank of England: Maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £200bn

The Bank of England’s Monetary Policy Committee this week voted to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200bn.

The minutes of the meeting will be published at 9.30am on Wednesday 22nd December.

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HBF news

CALA homes judgment

Following our report last week regarding the challenge by CALA Homes to the Secretary of State’s response to their first successful challenge regarding his unlawful revocation of Regional Strategies, the SoS challenged the temporary injunction put on his statement to local authorities to disregard the original court judgment. In a compromise deal issued by the High Court last Friday DCLG has had to formally publicise the existence of the second judicial review challenge. The resultant update, which is now available on the DCLG and Planning Inspectorate websites, notes that a claim has been made and that if it is successful then it would be unlawful to have regard to the intention to bring forward the revocation of the regional strategies in the Localism Bill.

The note reads: "Pending determination of the challenge, decision makers in local planning authorities and at the Planning Inspectorate will in their determination of planning applications and appeals need to consider whether the existence of the challenge and the basis of it, affects the significance and weight which they judge may be given to the secretary of state’s statements and to the letter of the chief planner."

Please click here to view the full note.

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Events

The Zero Carbon Hub Conference 2011 – Tomorrow's New Homes- Definition and delivery of low and zero carbon

1st February 2011 - Kings Place, London

The Zero Carbon Hub Conference is designed to bring delegates right up to date with the issues surrounding zero carbon, looking specifically at the definition and delivery of the zero carbon homes policy. An exhibition alongside the conference will showcase key products and services to aid delivery.

For more information or a booking form please visit www.house-builder.co.uk/zch or call 020 7960 1646.

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Habitat for Humanity – Hope Challenge 2011!

HBF’s nominated charity Habitat for Humanity has announced that its annual fundraiser ‘The Hope Challenge’ will take place next year from July 11-13. The event involves a weekend in the stunning Peak District national park where participants take part in a series of challenges and have to build their own shelter in which to spend the Saturday night.

Want to know more? Then email hopechallenge@habitatforhumanity.org.uk or call 01295 264240.

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For other HBF events visit the website

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Rosie Hinchliffe

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