Friday, 12th November 2010 Top stories this week Cala judgment – Pickles actions ruled unlawful.....read more New Homes Bonus consultation launched.....read more Coalition plans a 'power shift' from Whitehall - new Government business plans announced.....read more HBF give evidence to CLG Select Committee inquiry on revocation of Regional Strategies.....read more CML: September sees little movement in mortgage market.....read moreFollow us on Twitter! www.twitter.com/homebuildersfed Quick Links Top story Government and political news HBF news Industry news Economic news Housing market news Events Top story Cala judgment – Pickles actions ruled unlawful On Wednesday the Honorable Mr Justice Sales handed down judgment in the case of Cala Homes and the Secretary of State for Communities and Local Government. Cala had taken a judicial review of the SoS’s decision to revoke Regional Strategies (RS) through his letter to all Local Planning Authorities on 6th July 2010. The judge found in favour of Cala and declared the revocation unlawful on the two grounds of 1) the SoS not having the power to abolish RSs as a whole through the use of his revocation powers and 2) the fact that the SoS had not undertaken any level of Strategic Environmental Assessment (SEA) of the effect of amending the development plan concerned through the revocation of the RS. (please click here to view the judgment). Please click here to view briefing note* with more details of the case and its implications prepared for HBF by Karen Cooksley, Partner of Field Fisher Waterhouse LLP. The CLG Chief Planner has written to all local planning authorities with the Governments view of the implications of the decision. The letter can be viewed here. If you have any queries regarding the judgment, its implications or the HBF response please contact HBF Planning Director Andrew Whitaker – Andrew.whitaker@hbf.co.uk or tel: 0207 960 1600. Read more – and see HBF’s reaction to the decision *Member-only content, please remember to login to view to top Government and political news New Homes Bonus consultation launched Housing Minister Grant Shapps today pledged cash for communities who allow new homes to be built in their area. Almost £1bn Government funding has been set aside for councils that welcome new housing development, which they will be able to spend to benefit their local community. In proposals that will be published for consultation, the Minister will announce that the Government will match the council tax raised from new homes for the first six years through the New Homes Bonus. Councils and communities will work together to decide how to spend the extra funding - whether council tax discounts for local residents, boosting frontline services like rubbish collection or providing local facilities like swimming pools and leisure centres. Mr Shapps said councils who have already set out their stall for growth are building up rewards for their local area, and all homes that are built now will benefit from the new funding. Councils will also receive a higher level of funding for building new affordable homes. Grant Shapps said: "We are ending the system where the Government can tell communities what and where to build - that top-down approach slowed housebuilding to a trickle, so we need to take action now to get the country building again. That's why we've set aside almost £1bn so councils who build more homes start benefiting immediately from the extra cash, which they can spend on improving the local area. Read more Please click here to download the consultation document to top HBF: ‘Consultation welcome - Local Authorities now need to buy in’ HBF issued a press statement in response to the launch: Today’s launch of the New Homes Bonus (NHB) consultation is a key milestone in moving towards the introduction of the Government’s new housing policies. The NHB forms an integral part of the Government’s housing plans and its speedy introduction is essential if we are to avoid disrupting future housing supply. Along with the Localism Bill, expected later this month, we are starting to see the planks of the new system revealed. What is now imperative is that Local Authorities (LAs), who saw their funding cut in the Spending Review, understand how this new system provides the opportunity to generate significant income – and that it comes into effect immediately, covering homes built from now. Since the core of the old system, the Regional Strategies, were scrapped in July – a move reversed in the High Court on Wednesday – Local Authorities have been operating in a ‘policy vacuum’. Wednesday’s decision and today’s announcement mean that LAs can plan to meet their future housing needs more confidently, taking advantage of the financial rewards on offer. Last year saw the lowest number of new homes built since 1924. Clear planning and housing policy is essential if supply is not to drop still further and a shortfall of homes, already estimated to be approaching a million by HBF, is not to continue to increase. Speaking today, HBF Executive Chairman Stewart Baseley said; "The country is facing an acute housing crisis and it is imperative we have a planning system that delivers sufficient land for the homes we need. The New Homes Bonus is an essential part of the new incentive based structure and we welcome the commitment to a simple, easy to understand system." Read more to top Coalition plans a 'power shift' from Whitehall - new Government business plans announced The Prime Minister and Deputy Prime Minister published this week, for the first time, Business Plans for Government departments that set out in detail the work of the Government for the next four years. The Department for Communities and Local Government business plan sets out what the Department aims to do to deliver its key priorities to: Decentralise power as far as possible; Reinvigorate accountability, democracy and participation; Increase transparency by letting people see how their money is being spent; Meet people's housing aspirations; Put communities in charge of planning. Secretary of State Eric Pickles welcomed the publication saying: "Our purpose is to make a radical redistribution of power and funding from government to local people to deliver what they want for their communities, transforming public services. "Localism isn't simply about giving power back to local government. We will push power downwards and outwards to the lowest possible level - so that power is held by local people. People want more for less in their services and we will free up councils to make that happen. "We want people to have control over the decisions that affect them. Big Society encourages family and social responsibility plus civil liberties to create a stronger society. We want people to feel both free and powerful enough to help themselves and their own communities and be the building blocks of localism. They will be re-energised and empowered to enable ideas to flow from local people and enterprises." On housing the Business Plan states that: A policy paper will be published (this month) on plans for reform of social housing, including the new Affordable Rent proposals (for properties with rents up to 80% of market levels) first announced in the Spending Review with this scheme to be implemented from April 2011. The Government will consult on the New Homes Bonus (consultation launched today) to e implemented from April 2011 A strategy for bringing more empty homes back into use will be developed Commence consultation on the 2013 changes to Part L of the building regulations from December 2011 On planning it states that: The Localism Bill will be introduced this month The agreed new National Planning Policy Framework will be published in April 2012 It will be developing proposals “for a new designation to protect green areas of particular importance to local communities” in the period to March 2011 with the new designation to be published by April 2012 The Department will also introduce a Bill to implement Tax Increment Financing by July 2011, hold referendums in the 12 largest cities outside London on establishing elected mayors in May 2012. Read more to top Shapps issues Written Ministerial Statement on funding for Decent Homes Housing Minister Grant Shapps has pledged extra cash to improve the condition of social homes, helping to provide a decent home for some of the most vulnerable families across the country. Over £2bn of funding will be allocated to complete the Decent Homes programme, with the money going to councils who need it most. Ministers believe the previous system for allocating money was overly bureaucratic, and meant councils spent too much time and expense jumping through hoops, rather than making improvements to social homes. Mr Shapps said the money would now be allocated to councils who showed they could tackle a significant backlog of homes that need improving, rather than on the basis of a particular organisational structure or general performance criteria. Housing Minister Grant Shapps issued a Written Ministerial Statement on Decent Homes Funding. The statement announced that: “The Spending Review announced the Government will invest over £2bn of capital funding to help towards completing the Decent Homes programme. Of this, funding of £1.595bn is available over the next four years to help make local authority social homes decent (with an additional £0.510bn being provided for 'gap' funding existing stock transfers). We will be working with the Homes and Communities Agency to ensure that decent homes funding is allocated where it is needed and in order to support the self financing settlement.” He continued: “This funding will help ensure that all councils can deliver a sustainable 30 year business plan under self-financing. It would therefore not be appropriate to restrict access to funding on the basis of current organisational structure or performance. We will therefore open the process of allocation of funding for the period 2011-15 to all local authorities who have a significant backlog of decent homes work.” Read more to top HBF news HBF give evidence to CLG Select Committee inquiry on revocation of Regional Strategies HBF Planning Director Andrew Whitaker gave oral evidence on 8th November alongside Roy Donson of Barratt Developments and John Acres of the Catesby Property Group to the Communities and Local Government Select Committees inquiry on the revocation of the Regional Strategies and their house building targets. The MPs asked questions about the scale of current uncertainty, what was needed to end this, whether the new planning system would deliver more homes in the long term, the outlook for the provision of affordable housing, whether the New Homes Bonus would be an effective incentive, data requirements to ensure adequate planning for housing and the role of Local Economic Partnerships. HBF and the other witnesses set out the importance of clear transition to the new system as quickly as possible, simple tests to ensure proper assessment of housing market requirements in local areas and clear political commitment to housing as a priority in national policy supported by a coherent set of policies and incentives to encourage development and investment. Read more to top HBF provide further briefing for Caroline Flint Following HBF Executive Chairman Stewart Baseley’s recent discussion with Shadow Communities Secretary Caroline Flint, John Slaughter and Tim Collins met Ms Flint this week to brief her on the most important issues currently facing the industry. Areas covered included the Cala judgement on the revocation of the Regional Strategies, planning reform and the New Homes Bonus, the mortgage market and the FSA’s regulatory proposals and the impact of regulation on the industry. It was agreed to maintain regular contact with and briefings for the Shadow Communities front bench team as parliamentary consideration of the Localism Bill, the National Planning Framework and other issues proceeds during coming months. to top Industry news Grant Shapps: New common sense code to build greener homes Housing Minister Grant Shapps has published an improved green rating for new homes that will help deliver the next generation of green properties, which are built to the highest standards of sustainable design, and could reduce future utility bills by up to £2,250 a year in the most energy efficient homes. The Code for Sustainable Homes was introduced in April 2007 as a standard to improve the overall sustainability of new homes. The Code scores against a star rating system, using one to six stars depending on how the property performs against categories such as energy use, waste, materials and water. Mr Shapps said the Code has been updated to take into account the tougher new rules for energy efficiency in buildings, and help developers make new homes greener without getting bogged down in unnecessary 'gold plated' design features. The Code, which has been updated after an extensive consultation with house builders and industry experts, will also make it easier for consumers and homeowners who want to grade the standard of their properties. Grant Shapps said: "Over a quarter of the country's carbon emissions come from our homes, and if we're serious about tackling climate change we need to reduce this. So I welcome these changes to the Code that bring it in line with the tough new rules for energy efficiency in the Building Regulations. "We need greener homes, but I also want to make it easier to build the homes this country needs. Good building standards can only be effective if they are easy to understand, and only applied where they are appropriate. That's why the Code has been updated to iron out problems that have arisen over time, and streamlined so building standards can be used in a sensible way that suits the local situation. "It's important house builders meet the standards local communities demand, but I'm determined to simplify the complicated processes they have to go through to achieve this. That's why I've pledged to tackle the 'alphabet soup' of standards and red tape that blight efforts to start new developments, and I will be working with industry to get this done." Read more to top Report highlights contribution of freelance workers A new report published this week by Professor Andrew Burke of the Cranfield school of management highlights the contribution of freelance workers to the UK economy. It makes a persuasive case for public policy recognising the important contribution that freelancing makes to economic activity and growth. Read more to top Economic news CML: September sees little movement in mortgage market Slight falls in lending to some groups of new borrowers were tempered by comparable rises to others leading to a flat mortgage market in September, according to new data from the Council of Mortgage Lenders. There were 50,000 loans for house purchase (worth £7.4bn) advanced in September, unchanged by volume but down £0.2bn in value from August. The number was down 1,000 from September 2009 but the value was up £0.3bn. Loans for remortgage increased from 25,000 (worth £3.2bn) in August to 29,000 (worth £3.6bn) in September. Remortgaging accounted for 29% of total lending in September, the first proportionate increase since May. Despite this rise, there is still little incentive for borrowers to move away from low reversion rates with interest rates remaining low. This, coupled with an inability for some borrowers to access new refinancing deals means there is little prospect of a significant rise in remortgaging in the coming months. Loans to first-time buyers increased in number by 4% in September to 18,600 (worth £2.2bn) but were 6% lower by volume and 4% lower by value than in September 2009. In contrast, the number of home-mover loans fell by 2% to 31,600 in September following a 10% fall in August. And the value also fell by 2%, from £5.3bn to £5.2bn. Credit criteria remain tight and the slight easing of loan-to-value ratios that occurred earlier in the year appears to have reversed. First-time buyers borrowed on average 76% of the value of their property, down from 77% in August, while home movers borrowed 67%, unchanged from August. The number of loans to both first-time buyers and home movers increased in the third quarter by 8% and 16% respectively (values increased by 8% and 21%), but the number of first-time buyers was 5% lower than in the same period of 2009 (with the value of loans advanced staying the same) while the number of home-mover loans increased by 5% (and the value by 12%). Read more to top CML: Buy-to-let lending showing modest signs of recovery Buy-to-let lending rose by 12% in the third quarter, according to data published this week by the Council of Mortgage Lenders, supported by ongoing demand for rental property against the backdrop of a dysfunctional owner-occupier market. There were 26,900 buy-to-let loans advanced in the third quarter, worth £2.8bn. This quarterly rise of 8% by volume and 12% by value is the second consecutive quarterly increase in lending. Compared to the third quarter of 2009, the volume of lending was up 14% and the value up 33%, from 23,700 and £2.1bn respectively. Buy-to-let lending is low by historical standards - running at levels last seen in 2002 - and the market will likely continue to show growth into 2011. At the end of September, there were 1.29 million buy-to-let mortgages outstanding, an increase of 2% from the previous quarter. The proportion of loans in arrears of more than 1.5% of the balance remains broadly unchanged at 1.45%, while repossessions (at 0.12%) and the appointment of receivers of rent (at 0.10%) were also virtually unchanged from the previous quarter. Commenting on the figures, CML Director General Michael Coogan said: "We would expect buy-to-let demand to pick up further if current rising rental trends continue and house prices remain broadly stable. However, there is short term uncertainty as a result of the unresolved debate on housing benefit and landlords' response to new limits. "The bigger question is whether there will be sufficient supply side capacity to meet that demand, as the number of buy-to-let lenders dwindled in the credit crunch after 2007 and is yet to be fully restored. "However, it is clear that in a market where access to home-ownership has become more difficult, the private rental sector is experiencing, and will continue to benefit from, high levels of demand for good quality housing." Read more to top Housing market news RICS: Demand for property continues to fall The October RICS Housing Market Survey shows more surveyors reporting prices falling rather than rising. The headline price net balance declined from –36 to –49, the lowest reading since April 2009. Meanwhile, there was also another drop in new buyer enquiries, with the net balance declining from –2 to –12. New instructions fell slightly in October (after 8 months of growth), with the net balance moving from +22 to –4. Significantly, the drop in new stock coming onto the market could, if sustained, lessen the downward pressure on prices in the coming months. Transaction activity remains at depressed levels, with average sales per surveyor falling in October, from 16.7 to 15.2 (compared to the long run average of 26.8). Similarly, the average number of properties on surveyors’ books declined by 2.7% on the month to 67.2. Due to the fall in sales this month, the sales to stock ratio slipped from 24.2% to 22.6%. Newly agreed sales declined sharply, with the net balance decreasing from 0 to –12 (negating last month’s improvement). Looking forward, sales expectations remain positive, with surveyors expecting transaction levels to rise albeit at a slower pace than in September. Meanwhile, price expectations remained weak in October, with the net balance falling from –41 to –42. Read more to top Events HBF Ball – Friday 10th December, London. The HBF Ball will this year take place on Friday 10th December. Traditionally the social highlight of the industry’s year it will take place at the Marriott Grosvenor Square, London. Starting with a fantastic reception, the evening includes a three course meal, live music and dancing till 2am. It’s the perfect way to start your Christmas celebrations and the ideal time to catch up with industry colleagues. The supported charity for this year’s Ball is Habitat for Humanity The HBF Ball is kindly co sponsored by H+H and Ibstock Brick. For more details please click here or email events@house-builder.co.uk for a booking form. to top 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. Read more to top For other HBF events visit the website For HBM events visit to top Rosie Hinchliffe View Previous Weekly News Summary
