Friday, 15th October 2010 Top stories this week HBF meets Bob Neill.....read more HMI; Shapps: 'We need house price stability'; 'We will cut red tape'.....read more HBF: Welcome commitments – Still no detail.....read more Quango reform – "substantially reformed" HCA to stay.....read more CML: Only a quarter of all new home loans in August were for remortgage......read more Report reveals 'lost generation' of home owners.....read more CLG: House Price Index - August 2010......read more Quick Links HBF news Government and political news Economic news Industry news Housing market news Events HBF news HBF meets Bob Neill HBF Executive Chairman Stewart Baseley met Parliamentary Under Secretary of State at CLG, Bob Neill MP, this week. The meeting focused on preparations for the Decentralisation and Localism Bill and the new accompanying National Planning Policy Framework. It is still expected that the Bill will be published and introduced to Parliament next month and Ministers' intention is that consideration of the Bill and the Planning Framework should proceed in parallel. It was agreed to maintain dialogue during the passage of the legislation. to top Housing Market Intelligence More than 250 delegates packed into this year's Housing Market Intelligence conference on Tuesday, keen to hear information from the assembled experts on the numerous challenges facing the industry. Housing Minister Grant Shapps used the platform to pledge to reduce regulation in the industry and to confirm his support for house builders and his confidence that the Coalition policies would see more homes built. Michael Coogan, Director General of the Council of Mortgage Lenders, called on the industry to back his organisation's opposition to new regulations from the Financial Services Agency in his speech, while – in a packed day - Persimmon Chairman John White looked at his firm's strategy as the industry emerges from the recession. Please click here to view all of the speeches in full to top Government and political news Grant Shapps' ambition for price stability and pledge to cut red tape on builders In his HMI speech, the Minister talked about his "ambition for a period of house price stability. "This would provide a stable business environment for the building industry. "A market that means the industry can contribute to a sustainable economic recovery." He also undertook to tackle regulation, saying: "Today I can announce I am intent on further reducing the burden of regulation. "I will make sure any regulation must be cost-effective and proportionate - driving down unnecessary expense. "You will have heard this before, but the difference is that we really mean it. "Just as we are serious about cutting the deficit, we are serious about reducing regulations." Please click here to read his speech in full to top HBF: Welcome commitments – still no detail In a press release responding to the Minister's speech, HBF welcomed Grant Shapps' commitment to cutting red tape, simplifying the planning system and increasing housing supply, but demanded more detail on the policies behind the promises. Given home-builders' fear that the current hiatus in the planning system will continue without concrete details of the new Government's proposals, HBF asked Ministers to act quickly to provide a route map for how they intend to reduce regulation, as well as detail and certainty on the key planks for the Coalition's new planning system. The release noted the date for the consultation on the New Homes Bonus is yet to be announced, five months after the Secretary of State Eric Pickles abolished the Regional Spatial Strategies, a decision that has seen proposed housing developments across the country scrapped. Speaking after the Minister at the Housing Market Intelligence conference in London, HBF Executive Chairman Stewart Baseley said: "Grant Shapps' commitment to the removal of red tape is welcome and we are keen to work with Government to create their planned climate for delivery. But we urgently need clarity on this and on how the new incentive and planning systems will work. "A firm timetable for implementation of the Coalition's new policies would give industry and communities the necessary clarity and help end the current house building hiatus." Read more to top Full Shadow Ministerial teams announced Following last Friday's announcement of positions in the Labour Party's Shadow Cabinet, the full list of Shadow Ministers has been published. The front bench Shadow CLG team will be led by Caroline Flint as Shadow Secretary of State. Her Shadow Ministers will be Alison Seabeck, Barbara Keeley, Jack Dromey and Chris Williamson. We understand that Alison Seabeck will lead on housing working with Jack Dromey. Both have a longstanding interest in housing issues. HBF is seeking early meetings with the Shadow CLG team. Please click here to see the full Shadow Ministerial list to top Quango reform – "substantially reformed" HCA to stay As part of the Government's commitment to radically increase the transparency and accountability of all public services, the Minister for the Cabinet Office, Francis Maude, yesterday summarised plans to substantially reform a large number of public bodies and also announced further proposals. He confirmed the Government intends to introduce a Public Bodies Bill that will enable many of these plans to be implemented. The Government proposes to reform 481 bodies. Of these 192 will cease to be public bodies and their functions will either be brought back into Government, devolved to local government, moved out of Government or abolished altogether. Speaking about the changes, Francis Maude said that this process represented the restoration of political accountability for decisions which affect people's lives and the way taxpayers' money is spent: "We know that for a long time there has been a huge hunger for change. People have been fed up with the old way of doing business, where the Ministers they voted for could often avoid taking responsibility for difficult and tough decisions by creating or hiding behind one of these quangos. "Today's announcement means that many important and essential functions will be brought back into departments meaning the line of accountability will run right up to the very top where it always should have been." As part of the reforms the Government is also announcing proposals to merge 118 bodies down to 57, and to substantially reform a further 171. Among examples cited by the Minister was substantial reform of the Environment Agency and the Homes and Communities Agency to streamline their work. The review of CABE has not yet been completed. Yesterday's announcement states that the Government is "still considering the options for reform. The Building Regulations Advisory Committee has been retained; whilst the Tenant Services Authority has been scrapped with its regulatory functions transferring to the HCA. Read more to top HCA's comment on quango statement In a short statement on Francis Maude's announcement, the HCA has said: "The Cabinet Office has today officially confirmed that the HCA will be retained as a smaller enabling and investment agency working for local communities, with a new regulatory role. "We are currently in dialogue with Communities and Local Government (CLG) regarding the specific detail of the HCA's new streamlined enabling role. This will no doubt evolve further with the outcome of next Wednesday's Comprehensive Spending Review. "CLG has also today confirmed that the Tenants' Services Authority will be wound down and that the HCA will take on the economic regulation of social housing." Read more to top CITB-ConstructionSkills' comment on quango statement CITB-ConstructionSkills responded to the quango announcement with this short statement: "We welcome Government's announcement today that they recognise the value of levies as a way of harnessing employer investment in skills and training, and the view that CITB ConstructionSkills' industry led Board should have more flexibility and freedom to determine how best employer funds are invested – to help industry meets its challenges. "We view this stance as a positive endorsement of the valuable work that we do to make sure that construction has the right skills in the right place at the right time, and of the important contribution our industry makes to UK plc. Our industry-led Board had started to look at the strategic options available to us before this announcement, and we look forward to working closely with Government to explore how these freedoms can be secured for the future to help us meet industry needs." Read more to top LGA: Scrapping red tape can help town halls deliver the biggest council house building programme in decades The Local Government Association has this week said councils could spearhead a resurgence in the construction industry by delivering up to 100,000 new council homes over the next decade – as long as they are given real independence to manage their own housing budgets. Following Housing Minister Grant Shapps' announcement that town halls will be allowed to keep the rental income and receipts from the sale of council homes, (see last week's News Summary), the LGA - which campaigned for this overhaul – has published a report which shows how councils will be able to use the money they earn from rent and sales to pay for thousands of new council homes. The LGA says that the number of new council houses built could be increased at least 20-fold under a more localised system, at the same time creating thousands of new jobs in the building industry. However the LGA is warning that town halls' efforts to get Britain building again risk being crippled if the Government imposes unreasonable levels of debt on them or introduces further restrictions on borrowing in this month's Comprehensive Spending Review. The LGA report, entitled "Council Housing – Efficient, Effective, Local", urges that: Councils are not made to pay an unreasonable price to buy the council houses in their area back from the Government; The Government scraps proposals to place a new cap on councils' ability to borrow money. The LGA believes that existing rules are sufficient to ensure town halls are financially prudent; The Government should continue to fund the £6bn backlog of housing maintenance repairs. Cllr Gary Porter, Chairman of the LGA's Housing and Environment Board, said: "The Government's commitment to this long overdue overhaul is a tremendous breakthrough. "For the past three years the LGA has been lobbying for councils to be freed to invest the money they collect in rent in improving properties providing new homes for those that need it. "Devolving this power to councils is vital to turning around a house-building slump which has seen just a few hundred new council homes built per year recently." Read more to top CLG Committee on revocation of RSSs to start The DCLG Select Committee has it's first evidence session on Monday for its investigation into revocation of the RSSs. Read more to top Economic news CML: Only a quarter of all new home loans in August were for remortgage Remortgaging accounted for only 25% of loans in August, the lowest proportion in over 10 years, according to the latest survey data from the Council of Mortgage Lenders. August saw 25,000 remortgage loans, worth £3bn, advanced by lenders. The number of loans was down 13% and the value down 14% from July. Both were 19% lower than a year ago. With interest rates expected to remain low for some time yet, there is little incentive for borrowers to move away from low reversion rates at the end of tie-in periods. And continuing tight credit conditions mean that some borrowers are unable to access new refinancing deals. So there is little prospect of a significant rise in remortgaging in the coming months. There were 51,600 house purchase loans (worth £7.7bn) advanced in August, a fall of 8% (by volume and value) compared to July. While this is in line with the usual summer lull in market activity, a rise of 3% (by volume) and 12% (by value) from August 2009 shows that 2010 house purchase lending is still proving slightly more robust than the low levels in the equivalent months of 2009. The 18,300 loans (worth £2.3bn) advanced to first-time buyers in August represented a decline of 5% (by volume) and 4% (by value) from July. First-time buyer loans were also down 3% by number, but up 5% by value, compared with August last year. Deposit criteria for first-time buyers have varied a little on a monthly basis throughout the year to date, and appear to have eased again somewhat in August. First-time buyers in August put down on average a 21% deposit, compared to 24% in July. CML Director General Michael Coogan said: "August is a traditionally slow month for mortgage lending and it was no different this year. We expect a quiet market to continue for the foreseeable future. While we do not know what the impact of the comprehensive spending review will be on our sector, it will clearly contain austerity measures that will likely further dampen consumers' appetite to borrow. "We would expect lending to slow more significantly, year on year, as we head towards the end of the year, and it is unlikely that the uncertain environment will encourage a tick up of mortgage activity in 2011. With some uncertainty surrounding future house price trends, we would expect a muted market in the next few years. The problem of excess capital, that led to record lending and borrowing in 2007, has self corrected and will not return." Read more to top PWC – cuts to lead to a million job losses Nearly one million public and private sector workers are expected to lose their jobs by 2014/15 because of public sector spending cuts according to a report published yesterday by Price Waterhouse Coopers. The employment losses are expected to be split almost equally between the public and private sectors. In the private sector PWC say the business services and construction industries are likely to be the hardest hit. Northern Ireland, the North East and Wales are likely to have the greatest job losses as a percentage of total employment. The PWC forecast for construction is that the sector will have the largest loss in output relative to its size of any sector at about 5%. PWC say this reflects the relatively high exposure of construction companies to cuts in public sector capital spending, which is expected to be hit severely in the austerity measures. This would translate into about 100,000 construction sector job losses by 2014/15. They consider that in the short term, Government will need to address two important areas: managing the transition through innovative approaches to workforce reform and encouraging private sector investment to fill the infrastructure funding gap. In the long term Government will need to provide a stronger foundation for growth which is financially, socially and environmentally sustainable in the long run. Read more to top Industry news Report reveals 'lost generation' of home owners A new report launched this week by specialist insurer Genworth Financial, reveals how a generation of aspiring homeowners could be lost, as the barrier to home ownership in the UK continues to widen. The report outlines how the number of 90% LTV mortgages originated, typically associated with first time buyers (FTBs), fell from 245,000 in 2006 to 28,000 in 2009, a decrease of 89%, resulting in approximately 100,000 first time buyers being excluded from the market year on year since 2006. Read more to top Nationwide: Confidence falls across all main measures in September The latest consumer confidence survey results, released by Nationwide this week, reported that: Consumer confidence fell by nine points to 53 during September, reversing the gain seen in August; The Spending Index saw the biggest fall in September, decreasing by 14 points to 85 – its lowest level since November 2008; The Expectations Index fell by 12 points to 73 during September to reverse the previous months' increase; Consumers' faith in the present situation also fell back in September, with the Present Situation Index reaching its lowest level this year; The Expectations Index has fallen by 47 points to 73 since February 2010, perhaps suggesting a growing anxiety among consumers about the strength of the recovery and their own personal finances; The Expectations Index is now creeping towards the historical low of 56 points reached during the recession and will need a significant shift in sentiment to reverse this downward trend Martin Gahbauer, Nationwide's Chief Economist, said: "September saw confidence return to its downward path following what now appears to have been a temporary uplift in sentiment during August. August figures had suggested that confidence may have turned the corner following a succession of falls in the run up to and after the recent General Election. However, these gains have now been reversed following a notable drop in confidence across all main indices in September. It would seem that the pessimistic sentiments of a few months ago have been renewed and this has perhaps been driven by a realisation of the true impact of the cuts announced in the emergency Budget. The Government's impending Spending Review is likely to have a strong bearing on consumer confidence in the coming weeks and we can expect the index to remain volatile until the full impact of this has been assessed." Read more to top CITB-ConstructionSkills: Local enterprise partnerships must reflect industry needs Proposals put forward by Local Authorities on new Local Enterprise Partnerships (LEPs) risk ignoring the importance of construction and the built environment and the sector's training and skills needs, jeopardising the future recovery of UK plc, says CITB-ConstructionSkills. A flourishing construction and built environment sector will be essential in putting the nation back on the road to recovery – with the construction industry alone accounting for some 8% of GDP and over 2 million jobs. The sector's training needs must be met by new local funding arrangements, to ensure the skills are in place to support the sector as a key national driver of economic growth. Mark Farrar, Chief Executive of CITB-ConstructionSkills, said: "We welcome Local Enterprise Partnerships and the drive to create a more business-led funding model, better reflecting local economic needs. "However, it is vital that we do not create a 'silo' mentality to funding through LEPs. The construction and built environment sector is highly mobile by its nature, crossing LEP boundaries and we are worried that LEPs will not give proper priority to the sector and its skills needs, focusing on more localised industries, and in-turn undermining future national growth. It is vital that the construction and built environment sector is sufficiently consulted in the development and work of LEPs going forward to ensure this doesn't happen." Read more to top FMB: SMEs Heading into double dip The SME (Small and Medium Enterprises) construction sector has now experienced three consecutive years of declining conditions and is heading into a double dip recession as the economy falters, according to the latest State of Trade Survey from the Federation of Master Builders (FMB). 42% of respondents to the FMB's Quarter Three 2010 State of Trade Survey, the only survey of small and medium sized building companies, indicated that public new build workloads had fallen and that a further 51 percent expect them to do so again in the next three months. Richard Diment, Director General of the FMB said: "The severe reduction in workloads for small construction companies working on public sector new build projects such as schools, hospitals and other infrastructure construction is a direct consequence of the Government's public sector cuts. We are now moving towards a double dip recession in construction with more than half of our members anticipating falling workloads in the public sector over the coming three months. Only 9% of our members expect things to improve." Read more to top Housing market news CLG: House Price Index - August 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 August 2010. The key points from the release are: UK house prices were 8.3% higher than in August 2009 and 0.7% higher than in July 2010 (seasonally adjusted); The mix-adjusted average house price in the UK stood at £213,116 in August (not seasonally adjusted); UK house prices rose by 0.8% in the quarter to August 2010 compared to an increase of 1.7% in the May quarter (seasonally adjusted); Average prices increased in England (9.3%), Scotland (0.4%) and Wales (9.0%) but fell in Northern Ireland (-18.8%); Average prices paid by first time buyers increased by 8.2% over the year to August whilst prices paid by former owner occupiers increased by 8.35%; Average prices paid for new properties were 8.6% higher than a year ago and prices paid for pre-owned dwellings were 8.3% higher. Read more to top RICS: Housing market survey, September 2010 The September RICS housing market survey continued to show more surveyors reporting falling rather than rising prices, with the headline price net balance declining from –32 to –36, the third consecutive monthly fall. That said, half of all respondents indicated that prices have been broadly stable over the last three months. The latest drop in prices continues to reflect the high level of new instructions coming to the market at a time when buyer enquiries have been slipping. New instructions picked up in September from +12 to +22, while the net balance for new buyer enquiries moderated from –17 to –2. Significantly the gap between the two series (a good lead indicator for future price behaviour) narrowed for the third consecutive month. The average sales per surveyor remained constant at 16.7 during the month. Meanwhile, the average number of properties on surveyors' books recorded a 1.9% rise on the month to 69.1 (negating last month's similar fall). As a result of the rise in stocks per surveyor, the sales to stock ratio edged down from 24.7% to 24.2%. Looking forward, the price expectations net balance continued to deteriorate, slipping from –38 to –41. Meanwhile the net balance for newly agreed sales stabilised. Sales expectations in September were still positive although a little less than in August. Looking at the regional picture, Scotland continues to buck the trend as the only region with more surveyors reporting rising rather than falling prices. Within England, the East Midlands recorded the lowest price net balance, falling from –54 to –61. In Northern Ireland, prices continue to fall at a sharp pace, with the net balance remaining at -45. Read more to top Events Housebuilder Awards 2010 – Huw Edwards to host. The Housebuilder Innovation awards, that takes place on October 28th, will this year be hosted by prominent national tv broadcast journalist Huw Edwards. 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 at the Millennium London Mayfair Hotel. To see the full shortlist for this year's Housebuilder Awards please visit http://www.house-builder.co.uk/awards/ For all booking enquiries please contact the events team on 020 7960 1646 or events@house-builder.co.uk to top 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 HBF Technical Conference, Birmingham, Tuesday 9th November Redefining the regulatory maze. This year's HBF Technical Conference will this year look at the regulatory burden facing the industry. Discussing the forthcoming changes in the building regulations, the Code for Sustainable Homes and the Flood and Water Management Act. Please click here to book online or download a booking form. Call 020 7960 1646 with any queries. to top Solar Power UK 2010, 18-19th October, Savoy Place, London – discount for HBF members The Solar Power Group of the Renewable Energy Association is spearheading Solar Power UK 2010, the number one solar PV event in the UK. The conference will bring together experts and business leaders in the solar industry in the UK. Attendees can hear from Ray Morgan, CEO of Woking Council on using PV to combat Fuel Poverty, Adrian Lea - Renewables Planning Officer for Cornwall Council, Nicholas Doyle from Places for People on plans to roll out PV in social housing and Ray Noble, PV specialist for the REA on new protocols for integrating PV into buildings. For Home Builders Federation members a specially negotiated 20% discount is offered for delegate bookings using the code: HBF20OFF. Please click here for more details to top For other HBF events visit the website For HBM events visit to top Rosie Hinchliffe View Previous Weekly News Summary
