Friday, 13th August 2010 Top stories this week ‘More local homes means more rewards’ Government tells Local Authorities.....read more CALA initiates legal challenge to scrapping of RSS targets.....read more CML: Fixed rate mortgages gained in popularity in June.....read more CML reports second quarter buy-to-let results.....read more New Homes Month – just one week left to order your FREE newspapers! - Daily Telegraph to support NHM campaign......read more Quick Links Government and political news Housing market news Industry news Economic news Events Government and political news ‘More local homes means more rewards’ Government tells Local Authorities The Government this week wrote to all Local Authorities and MPs about its proposed ‘New Homes Bonus’. The letter from Grant Shapps, promise that the ‘New Homes Bonus’ will form a ‘strong and transparent’ framework of incentives that will ‘’directly reward councils for new homes built’. It states that ‘These incentives will directly reward councils for new homes built, and we will be consulting on the detail later this year. Because we are committed to housing growth, introducing these incentives will be a priority and we aim to do so early in the Spending Review period.’ No further specific timescale was given for the implementation of the Bonus but in the letter Shapps commits that ‘I can therefore today confirm that councils who take action now to give planning consent and support the construction of new homes will receive direct and substantial benefit from their actions’ The announcement gained significant media coverage. HBF's response in the media welcomed the commitment but stressed the need for the Government to urgently clarify the details and timescales. Stewart Baseley, Executive Chairman at the HBF said: “We hope that Local Authorities will take (today’s) announcement as a firm commitment from Government as they look to develop their future housing and budgetary plans. Moving forward it is imperative that Government provides Local Authorities with full and complete proposals as soon as possible if it is to deliver its oft stated commitment to increasing housing delivery, and avoid worsening the country’s already acute housing shortage.” HBF’s Director of Economic Affairs, John Stewart, appeared on the Today programme on Monday morning to discuss the announcement; please click here to listen. (skip to 00:47:30) The Communities and Local Government’s web site announced the story as follows; Local communities that build more local homes will be rewarded by getting more funding to use in their local area on things they consider to be a priority. Communities will be able to use their reward for going for growth on whatever they wish locally, such as council tax discounts for residents or facilities like playgrounds. The New Homes Bonus, to be introduced early in the Spending Review period, will mean more homes built where they are needed and is intended to reverse the decline in the number of homes being built, currently languishing at its lowest peacetime level for 80 years. The Minister confirmed that councils who take action now to give planning consent and support the construction of new homes where they are needed and wanted will receive direct and substantial benefit for their actions. Mr Shapps urged councils to open up an honest and direct debate with the communities they serve about the benefits of building new homes in their area - how they can reap the benefits of development and not just the costs. Grant Shapps said: "We will not tell communities how or where they should grow. But the new Homes Bonus will ensure that those communities that go for growth reap the benefits of development, not just the costs. "With house building at its lowest peacetime levels for over 80 years action is needed now to build the homes the country needs. That's why these new powerful incentives to build will be introduced early in the Spending Review period. And it's why I have confirmed that those councils who go for growth now will reap the rewards. So I urge councils to seize the moment and open up a debate with their communities now about the new homes they need and how they would use the new Bonus." The Government wants to hear the views of councils, communities and industry as it finalises the scheme. A consultation paper on the final scheme will be published following the spending review. Read more to top CALA initiates legal challenge to scrapping of RSS targets. The Times reported this week that house builder CALA Homes has lodged papers with the High Court seeking permission for a judicial review of Mr Pickles’ decision to scrap Regional Spatial Strategies and the housing targets contained within them. CALA Homes argued that Mr Pickles acted unlawfully by abolishing the strategies, as the decision required primary legislation, and that transitional arrangements should have been put in place prior to the announcement. According to Graham Cunningham, Managing Director of CALA Homes (South), “The Government has acted unlawfully in not putting any transitional arrangements for planning in place. There is a policy vacuum. We urgently need to build new homes, especially in the South East of England, but housebuilders have been left with no direction.” The paper reports that CALA’s legal challenge to the Secretary of State centres on a controversial plan to construct 2,000 houses in Winchester, which was rejected in June and was to have gone to appeal. However, the housebuilder argued that an appeal cannot take place while there is an absence of planning policy. to top CLG: Cutting red tape to give a green light for greener development The Government is taking action to try to shorten and simplify environmental regulations so it is easier for developers to green-proof their building projects, Communities Secretary Eric Pickles said this week. New proposals published for consultation will revoke four sets of rules about Environmental Impact Assessments, and replace them with one streamlined and user-friendly set of regulations. The complex guidance for carrying out assessments will also be scrapped and replaced so it is clear and concise, ensuring developers can easily measure and minimise any negative effects their projects will have on the environment. Communities Secretary Eric Pickles said: "I want it to be as easy as possible for councils and businesses to reduce any negative impact new development may have on the environment. That's why we're scrapping this Byzantine collection of regulations and replacing them with one simple and concise set of guidelines for environmental assessments. "It is not enough for regulations to have good intentions - they also need to be user-friendly. So we've acted quickly to ensure the environment can be protected, without overwhelming everyone with red tape." Read more to top Housing market news House price indices RICS: Prices fall for the first time since July 2009 More chartered surveyors reported a fall than a rise in house prices for the first time since July 2009 as demand from purchasers slipped back and the number of properties coming to the market continued to increase, says the latest RICS UK Housing Market survey. 8% more surveyors reported a fall rather than rise in house prices - the lowest reading in more than a year, when 16% more reported price falls. In contrast, last month saw 8% more surveyors reporting rising, not falling prices. Regionally, the only areas which continued to see material price rises in the past month were London and the North West. Demand for property, measured by the net balance of new buyer enquiries, fell for the second month in a row, from -6 to -10. Difficulty in securing mortgages and increased uncertainty about the prospects for the economy may have contributed to caution from potential homebuyers. The number of new vendor instructions, which in effect measures the amount of properties coming to the market, increased. 33% more surveyors reported a rise rather than fall in properties to their books, up from 28% in June. This is the highest reading since May 2007, the month before the initial planned introduction of HIPS. Since the abolition of HIPS in May this year, it appears some homeowners are now a little more willing to test the property market. In keeping with the trend of increased supply to the market, the average number of properties on surveyors’ books also rose by 4.1% from June, taking the average to 69.1. Meanwhile, the average number of sales per surveyor stayed flat, at 16.6 (down 0.1%). As a result, the sales to stock ratio – a useful indicator of market slack – fell to 24%, the lowest level since June 2009. Newly agreed sales remain largely unchanged, with 1% more surveyors reporting a rise than fall in the number of transactions, down from 3% in June. Looking forward, expectations for house price increases have also turned negative, with 28% more surveyors expecting prices to fall over the coming months, up from 6% in June. Despite this, sales expectations remain positive, with 8% more surveyors expecting sales to rise rather than fall, although this is down from the previous month. Read more to top CLG House Price Index - June 2010 The latest UK house price index statistics produced by Communities and Local Government were released this week. The latest statistics release includes data based on mortgage completions during the month of June 2010. The key points from the release are: UK house prices were 9.9% higher than in June 2009 and were unchanged from May 2010 (seasonally adjusted); The mix-adjusted average house price in the UK stood at £210,775 in June (not seasonally adjusted); UK house prices rose by 0.8% in the quarter to June 2010 compared to an increase of 2.8% in the March quarter (seasonally adjusted); Average prices increased in England (10.5%), Scotland (3.7%) and Wales (13.5%) but fell in Northern Ireland (-7.7%); Average prices paid by first time buyers increased by 10.3% over the year to June whilst prices paid by former owner occupiers increased by 9.8%; Average prices paid for new properties were 9.0% higher than a year ago and prices paid for pre-owned dwellings were 10.0% higher. Read more to top LSL/ Acadametrics HPI: Housing transactions see summer pick-up The key statistics reported in the latest LSL/ Acadametrics house price index include: Housing market transactions increased for the second consecutive month, rising by 11% in July from 64,915 in June to an estimated 72,100 in July. Transaction activity has doubled since January; House prices registered the first rise in five months, rising by 0.1% in July. Average prices over the last three months have remained largely stable; The annual increase in the average house price has slowed to 8.1% owing to the stronger year on year comparisons; David Brown, Commercial Director of LSL Property Services commented: “House sales showed particularly strong growth in July, ahead of the usual seasonal uptick. The influx of quality properties on to the market in recent months has alleviated upwards pressure on prices, while buyers took advantage of a slight easing in lending conditions to secure their new home. We don’t expect a return to the mini-boom of late last year, but the likelihood of a significant downturn is small too. Small monthly house price fluctuations are likely to continue in the short-term, and there will be considerable regional differences, particularly as the coming budget cuts hit some parts of the country worse than others. Longer term recovery is dependent on an improvement in the mortgage products on offer for first-timers. With thousands of frustrated buyers waiting in the wings, unlocking first-time buyer demand is key to re-energising the whole market.” Read more to top NAEA: July bounce-back sees market recovery trend restored The housing market experienced one of its strongest months of the year so far in July, according to the National Association of Estate Agents (NAEA). The NAEA’s monthly market report found that demand for housing had increased, more sellers were putting property onto the market and the average agent made more sales than in June. The average agent in July had 292 registered house hunters, up from 279 in June. Supply was also up, with agents reporting an average of 68 properties on their books, compared to 59 in June. The percentage of sales being made to first time buyers (FTBs) also increased from 21% to 26%, suggesting that the decision to raise the threshold of Stamp Duty Land Tax to £250,000 is translating into sales. Michael Jones, President of the NAEA, said the market report showed that the fragile recovery that has defined the market in 2010 was continuing. He said: “Demand and supply both increased in July, which is great news for the housing market. “However we should not get carried away – what we are seeing is a slow, steady and patently fragile recovery. One thing which is interesting is that consumer confidence in the market appears to be high, despite apparent uncertainty elsewhere about the future of the economy.” Read more to top Nationwide: Consumer Confidence Index (CCI) According to the latest results of Nationwide’s Consumer Confidence Index, confidence has fallen for the third consecutive month dropping by seven points in July to 56. The Expectations Index saw the biggest fall in July – dropping by 13 points – continuing the trend seen since February 2010. Consumers’ faith in the spending situation also deteriorated during July with the Spending Index decreasing by three points. The Expectations Index has recorded a total drop of 44 points in the past five months, bringing it well below the long-run average of 91.2 for this measure. Martin Gahbauer, Nationwide’s Chief Economist, said: “Consumers continued to show caution towards the strength of the economic recovery during July. The index has now seen three consecutive months of decline and this has largely been fuelled by uncertainty as to what the next six months hold. In particular, there appears to be a growing concern among consumers as to their level of disposable income in the months ahead. July will have been a time for many consumers to reassess their individual circumstances following the Chancellor’s emergency Budget, and inflationary pressures, such as rising food and fuel costs, may now be leading to more negative sentiment among consumers as they start to feel the pinch on their spending power.” Read more to top Industry news CML: Fixed rate mortgages gained in popularity in June 48% of new borrowers took out a fixed rate mortgage in June, the highest proportion so far in 2010, according to new data from the Council of Mortgage Lenders. Fixed rates had proved unpopular this year compared to the last several years due to an historic low bank rate with little prospect of the rate rising. But with fixed rate prices falling they are starting to find favour again. House purchase lending increased significantly in June. There were 52,000 loans advanced (worth £7.6bn), up 19% in volume (23% in value) from May 2010 and up 14% in volume (27% in value) from June 2009. This is now the twelfth consecutive month in which lending has been higher than its year-earlier levels. Lending for remortgage also increased, though only modestly, in June. There were 27,000 loans for remortgage, worth £3.4bn, up from 26,000 (worth £3.2bn) in May 2010 but down from 34,000 (worth £4.2bn) in June 2009. For the second quarter as a whole, there were 136,000 house purchase loans, worth £19.7bn. This is 20% higher (by volume and value) than the last quarter and up 17% (by volume) and 30% (by value) than quarter two 2009. For remortgaging, the second quarter saw 77,000 loans (worth £9.6bn), up 2% by volume, with no change in value, from the first quarter, but in stark contrast to house purchase lending, the figure was down 20% (by volume) and 19% (by value) from the second quarter of 2009. There were 52,200 loans (worth £6.2bn) to first-time buyers from April to June, up from 43,400 (worth £5bn) from January to March and 85,300 home mover loans (worth £13.5bn), up from 70,700 (worth £11.2bn). Read more to top The Queen's Awards for Enterprise The Queen's Awards for Enterprise are highly prestigious awards for outstanding achievement by businesses in Innovation, International Trade and Sustainable Development. The Queen's Award for Enterprise Promotion is awarded to individuals. The awards are made annually by HM The Queen, and are only given for the highest levels of excellence demonstrated in each category. They are judged to a demanding level and winners receive a number of benefits and worldwide recognition. Previous winners have come from a diverse selection of business sectors and have included large and small businesses. Recipients of the individual award have been from varied social and professional backgrounds. Last year Edinburgh Napier University received the royal award for its collaborative research in to noise insulation involving the house building industry. The research helped revolutionise new-home building practices and standards and led to the establishment of the Robust Details scheme, benefiting hundreds of thousands of new homes owners and the house building industry alike. Read more to top Economic news Bank of England: Inflation report August 2010 The Bank’s inflation report reported this week that the recovery is continuing in the United Kingdom, with output growth across the first half of 2010 close to its historical average. But the level of economic activity remained well below its pre-crisis peak. The revival in the world economy also proceeded, albeit unevenly. The UK recovery is likely to continue, underpinned by the considerable monetary stimulus, further growth in global demand and the past depreciation of sterling. But the risks to growth remain weighted to the downside. Spare capacity is likely to persist over the forecast period, although its extent will depend on the strength of demand and the evolution of supply, both of which are uncertain. CPI inflation remained well above the 2% target, elevated by temporary effects stemming from higher oil prices, the restoration of the standard rate of VAT to 17.5% and the past depreciation of sterling. And the forthcoming increase in the standard rate of VAT to 20% will add to inflation throughout 2011. As these effects wane, downward pressure on wages and prices from the persistent margin of spare capacity is likely to pull inflation below the target. But the pace and extent of that moderation in inflation are impossible to predict precisely. Under the assumptions that Bank Rate moves in line with market rates and the stock of purchased assets financed by the issuance of central bank reserves remains at £200bn, inflation is a little more likely to be below the target than above it during the second half of the forecast period, although those risks are broadly balanced by the end. Read more to top CML reports second quarter buy-to-let results According to the latest buy-to-let survey results from the Council of Mortgage Lenders, buy-to-let lending still remains very subdued and ongoing challenges remain, in the second quarter of 2010 the number of buy-to-let mortgages taken out was 24,900. This was13% up on the 22,000 in the first quarter, and 15% higher than the 21,600 in the second quarter of 2009. The value of buy-to-let lending in the second quarter was £2.4bn, of which £1bn was remortgaging. Although business is only just over a quarter of its level of three years ago, both the number and the value of buy-to-let loans were at their highest level since the fourth quarter of 2008 (other than in the fourth quarter of 2009 - where demand was artificially inflated by the end of the stamp duty concession). As at the end of June, there were 1.26 million buy-to-let mortgages outstanding, worth a total of £149bn. By value, buy-to-let mortgages accounted for 12% of all mortgages, the highest proportion since records began. In the buy-to-let market, arrears cases have improved markedly. Repossession rates remain higher than in the owner-occupier market, however, not least because of the extended forbearance that lenders extend to home-buyers to try to help prevent them losing the homes in which they live. In the buy-to-let market, a "receiver of rent" may also be appointed, instead of the lender taking possession of the property. Commenting on the performance of the buy-to-let market, CML Director General Michael Coogan said: "The buy-to-let market has continued to grow, albeit slowly, throughout the period since the credit crunch. And with fewer people able to afford the entry costs to home-ownership, as well as the pressure on social housing, tenant demand for private rented property will remain strong. Finance for private landlords, whether institutional or individual, is crucial if the UK is to have enough homes to meet the needs of the population. Funding conditions for lenders remain tight, but there is every reason to expect the buy-to-let sector to continue to make a powerful contribution to helping meet the country's varied housing needs." Read more to top CML reports decline in arrears and repossessions The number of properties taken into possession by first-charge mortgage lenders continued to fall in the second quarter of 2010, according to the latest data from the Council of Mortgage Lenders. There were 9,400 repossessions (down from 9,800 in the first quarter and 11,800 in the second quarter of 2009). The number of mortgages behind with payments also fell. As at the end of June there were 178,200 loans with arrears equivalent to 2.5% or more of their mortgage balance. This was 5% lower than at the end of March, and 17% lower than a year earlier. The continuing welcome decline in payment problems has led the CML to revise its forecasts for arrears and repossessions in 2010 as a whole. The CML now expects 175,000 mortgages to end the year 2.5% or more in arrears, compared with the previous forecast of 205,000. A total of 39,000 repossessions is now forecast for 2010 as a whole, compared with the previous forecast of 53,000. CML Director General Michael Coogan said: "Mortgage difficulties have so far been contained at lower levels than we expected at the start of the year, and by comparison to the 1990s recession. "However, the safety net for borrowers is weakened by the prospect of higher interest rates, a possible rise in unemployment, a counter-productive stigma hanging over mortgage payment protection insurance, uncertainty over future debt advice funding, reduced government support for mortgage payments, and mortgage rescue schemes being reviewed as part of the deficit reduction plan. "While we don't want to cry wolf, it seems obvious that the ongoing prognosis for arrears and possessions is far from a healthy all-clear. We hope the coalition government will not risk undermining the chances of extending the welcome trends this year by removing support mechanisms that work." Read more to top Events New Homes Month – just one week left to order your FREE newspapers! Daily Telegraph to support campaign. The New Homes Marketing Board will this year be undertaking a New Homes Month promotional campaign in September. It will look to promote the benefits of new build homes during the key autumn selling season. The NHMB will be again producing a New Homes News newspaper for members to hand out on site throughout the month. There is now just over a week left for members to register for their free copies. NHMB has also agreed that as per last year New Homes Month will feature heavily in the Daily Telegraph’s September property supplement. This will give the campaign a high profile launch and should result in driving people to house builders show homes. A series of press releases will be used to raise the profile of the campaign. These will cover a range of topics aimed at promoting the new homes market and will be distributed to every national and local newspaper ion the country. For more information – and to get a newspaper booking form - contact nhm2010@hbf.co.uk to top North West Social dinner – just four weeks to go. There are just four weeks to go until the return of the North West Social dinner. This event, which has not taken place for the past two years, will see hundreds of industry representatives gather in Manchester for an evening that includes a three course meal, live music and dancing. It takes place on Friday 10th September at the Midland Hotel in Manchester. Everyone is welcome at an event that attracts members from across the North and Midlands. Always a lively and fun event, regular attendees are booking keenly for what will be a fun filled industry evening. Please click here to find out more to top Housing Market Intelligence 2010 – 12th October, Savoy Place, London This year’s Housing Market Intelligence conference and annual report launch will be held on Tuesday 12th October at Savoy Place in London. Now in its eighth year, Housing Market Intelligence has become the leading strategic conference for the house building industry. This year the event is expected to sum up the new political climate nearly six months after the election, as well as providing analysis and insight into the market, the economy, the sustainability agenda, mortgages and all the key issues for house builders and associated companies. Please click here for the full agenda, to download a booking form and to book online or contact events@house-builder.co.uk to top HBF Planning Conference – 16th September 2010, Hilton Hotel, Bristol HBF’s Planning Conference this year will be looking at how the industry can ‘make localism work’’. Delegates will be considering; Will the industry be able to deliver new houses under localism? What are the new tools needed? If we are redesigning the planning system will we also be brave enough to redesign the current planning obligations process? How can we put S106 agreements back into the box now that local authorities expect so much? There will be a range of speakers from central and local government, the industry and its advisors. Please click here to see the full agenda, download a booking form and to book online or contact events@house-builder.co.uk with any questions. to top Housebuilder Awards 2010 – Early booking until 10th September – Book your table now! To see the full shortlist for this year’s Housebuilder Awards please visit http://www.house-builder.co.uk/awards Now in its sixth year - the prestigious awards bring together the best of innovation and excellence in the house building industry. The awards are the highlight of the house building calendar, celebrating the very best of the industry and recognising the achievements of those leading the way in innovation. This year the winners will be announced at a glamorous black tie event on the night of Thursday 28th October at the Millennium London Mayfair Hotel. To book your table at the Housebuilder Awards and take advantage of the early booking discount, please visit http://www.house-builder.co.uk/awards/ to top HBF Ball – Friday 10th December, London. Habitat for Humanity chosen as charity. 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. We are pleased to announce that our supported charity this year is Habitat for Humanity For more details please click here or email events@house-builder.co.uk for a booking form. to top HBF Technical Conference, Birmingham Tuesday 9th November Date for your diary, with more details to follow. Please contact events@house-builder.co.uk with any further questions or to express an interest. to top For other HBF events visit the website For HBM events visit to top Rosie Hinchliffe View Previous Weekly News Summary
