Friday, 17th September 2010 Top stories this week HBF Planning Conference.....read more CLG Ministers appear before the Select Committee.....read more Grant Shapps: Lack of trust condemned HIPs to failure.....read more CML survey shows long-term desire for home-ownership stronger than ever.....read more RICS: House prices edge lower but sales expectations rise......read more ONS: House Price Index - July 2010......read more Quick Links HBF news Government and political news Industry news Housing market news Economic news Events HBF news HBF Planning Conference Over 100 delegates attended the annual HBF Planning Conference “Making Localism Work” held in Bristol this week. Speakers from both the private and public sector addressed the audience with their views and thoughts on the challenges and possibilities of the government’s new planning agenda. Keynote speaker Richard McCarthy, Director General for Planning and Housing at CLG, stressed the commitment of the new government to a localism approach and set out the programme for implementation of the necessary legislation. However, he did not share the industry’s concerns over the potential problems for housing delivery arising from the current confusion and hiatus in policy suggesting instead that the Comprehensive Spending Review (in October) would make it clear to local authorities that funding from development based incentives would be necessary for them to maintain their current budgets. He promised an announcement on the future of community infrastructure levy and tariffs “imminently”. to top Stewart Baseley speaks at launch of Brookwood Farm Code 5 homes launch HBF Executive Chairman Stewart Baseley was among the speakers at the official launch of HBF member the William Lacey Group’s Code Level 5 development with Woking Borough Council at Brookwood Farm in Surrey yesterday. Commenting on the innovative design solutions used and the partnership between the Lacey Group and the council, Stewart said: “Brookwood Farm pushes the boundaries and will provide an excellent basis to understand the role that various design and technology solutions can play as we as an industry strive to meet the zero carbon challenge that we have been set. “If there is one thing I have learnt in my many years in house building, it is that our industry has a unique ability to adapt to change and find a way to succeed. If we can combine that ability with the adaptability of forward thinking Local Authorities such as Woking, we will have a real chance of delivering the homes we know this country needs.” to top Government and political news CLG Ministers appear before the Select Committee The DCLG Select Committee met on Monday to discuss the work of the department, taking evidence from Communities Secretary Eric Pickles and Grant Shapps and Greg Clark. Housing and Planning was a large part of the session. Most questions were answered by Grant Shapps and Greg Clark with Eric Pickles limiting himself to insisting that the new system was necessary to move away from one predicated on conflict and unsuccessful centrally imposed targets. The Committee expressed concerns about the lack of detail or framework for local authorities following the revocation of the RSSs. It was noted that there were no particular housing numbers or plans and a lack of land supply in many areas. The Labour members of the Committee made some criticism of the lack of assessment of outcomes or outputs in housing number terms of the new system. Grant Shapps confirmed that affordable housing units would gain local authorities payments of a 125% of council tax as an incentive [though a consultation on this is due to be announced around the time of the Comprehensive Spending Review]. He also confirmed that the Government would judge success to be by building more homes annually than the previous Government had managed before the recession. If necessary, ‘Plan B’ would be to increase the incentives. There was a brief – unfocussed - discussion of lending in relation to shared ownership and homebuy schemes. Grant Shapps was not specific, but said that shared ownership was a very important part of helping people onto the housing ladder and that there were commercial schemes starting up. He pointed the Committee to the Treasury for wider details on lending and said that the health of the wider economy had to be the Government’s first priority. In general the largely new members of the Committee showed some scepticism about the Government’s approach, but so far as housing and planning are concerned this week’s session is likely to have proved a dry run for the Committee’s imminent first full inquiry on the revocation of the Regional Strategies. Ministers largely kept their powder dry with their answers focusing on forthcoming consultations, the spending review and the Treasury. They contrasted the shortcomings of the previous Government’s policies with their belief that a localist system would succeed. to top HBF submission to the Select Committee on Revocation of the Regional Strategies The deadline for submissions to the DCLG Select Committee’s forthcoming inquiry on the revocation of the Regional Strategies was earlier this week. The HBF has made a submission stating that while it is still too early to tell what the long term impact of the Government’s policies will be on housing supply, the current hiatus is of concern and the policy vacuum needs to be filled as soon as possible. HBF also argues that key features of the new planning system should include duties for local authorities to assess housing requirements and identify a suitable land supply to deliver these. Please click here to read the HBF submission* *member only content, please remember to log in to view to top ….. media picks up on Planning changes The Daily Telegraph ran a story on the Committee Inquiry stating that the industry needed clarity on planning reforrn. Read more London’s Evening Standard took a similar position, warning of the potential damage to housing supply caused by a lack of clarity; Read more to top Grant Shapps: Lack of trust condemned HIPs to failure Commenting on independent research on Home Information Packs Housing Minister Grant Shapps has said HIPs were ignored by the very people they were meant to help, backing the decision to scrap them. The new Government scrapped HIPs within days to provide certainty to the property market, and help it during the recovery by reducing the cost of selling a home. The end of HIPs has already seen a jump in the number of properties being put on the market, and will save consumers an estimated £870m over ten years. Home buyers were 'very concerned' about the reliability of information they received from sellers, and over 75% claimed they would only trust information from an independent surveyor that they had appointed. More experienced buyers preferred to use an informal inspection by a builder, plumber or electrician who they already knew rather than use a condition survey. Mr Shapps said the research, which was commissioned by Communities and Local Government last year, showed that adding extra layers of regulation to improve the property market does not work. "It was always obvious that HIPs were deeply unpopular with people selling homes because they created needless cost and hassle. What is now clear is that people buying homes didn't rate them either. "People who buy and sell homes want to know more about their condition, but forcing them to swap bits of information they don't want or trust is a foolish way to try and improve the property market. "That's why in future this information will be provided on a strictly voluntary basis. We will allow the housing sector to develop products that include the information consumers actually want, and that they can rely on when buying a home." Read more to top Industry news CML survey shows long-term desire for home-ownership stronger than ever A consumer opinion survey undertaken by YouGov for the Council of Mortgage Lenders has found that despite the credit crunch, and the knocks to consumer confidence of the past few years, more people than ever before want to be home-owners in the long term. 85% of people cited home-ownership as the tenure they hoped to be living in a decade from now, suggesting that the home-ownership aspiration remains firmly rooted in the British psyche. The CML has asked the same questions about home-ownership aspirations periodically since 1975. Last time the survey was undertaken, in 2007, the proportion who expected to be home-owners in ten years' time was 84%. Over the short term, the desire for home-ownership has dipped a little. 76% of those surveyed saw home-ownership as their ideal tenure in two years' time - down from 78% last time the survey was undertaken in 2007. This primarily reflects a much lower short-term appetite (42%) for home-ownership among adults aged 18 to 24 - although this is also the age group with the highest ten-year home-ownership aspirations (88%). The CML states that it is highly likely that this reflects younger people's lifestyle choices, favouring more flexibility and mobility in the short term, as well as a realistic assessment of the difficulty of entering the housing market under current affordability conditions. CML Director General Michael Coogan, commented: "It is crystal clear that most people see home-ownership as their tenure of choice over the long term. But the unintended consequence of regulatory change is that it is going to be permanently tougher for people - especially young people - to fulfill that aspiration in the future, even if they are responsible with their finances. "Home-ownership levels are already falling, and they will continue to fall. Is that the outcome that policymakers want? It is certainly not what consumers want, but it's what they're likely to end up with. We urge politicians and regulators to pause and think again about the cumulative effects of their well-intentioned but poorly targeted package of regulatory changes." Read more to top RICS: House prices edge lower but sales expectations rise A further increase in the supply of property to the market pushed house prices down for the second consecutive month, but lower prices are leading to a rise in sales expectations, says the latest RICS UK Housing Market survey. 32% more chartered surveyors reported prices falling rather than rising in August - the biggest negative reading since May 2009. RICS’ assessment is that this downward trend in prices continues to be driven by a combination of increased supply and a moderation in demand from buyers. Regionally, surveyors are now reporting prices slipping in all regions covered in the survey apart from Scotland. Meanwhile, the balance of newly agreed sales also fell, from +1 to -20, the lowest reading since August 2008. However, future expectations for sales have begun to pick up; 18% more surveyors expect sales to rise over the next three months, up from 8% in July. RICS say this rise in sentiment may be attributed to the view that a dip in house prices will begin to tempt more buyers back to the market over the coming months. New instructions, which indicate supply to the market, showed 12% more surveyors reporting a rise in instructions rather than a fall, down from last month’s reading of 33%. This suggests the initial surge of property to the market after HIPS were abolished has now started to fall back. Buyer demand, measured by new buyer enquiries fell from -10 to -17, the lowest reading since January 2010. Significantly, the gap between these two series, which is the best lead indicator of future prices, has narrowed for two successive months. The average number of sales per surveyor remained broadly unchanged at 16.7 while properties on surveyors’ books fell slightly, taking the figure to 67.8. As a result, the sales to stock ratio - a key indicator of future house price inflation edged up to 24.7%. Looking ahead, surveyors’ expectations for house prices over the next three months continue to deteriorate, with 38% more expecting prices to fall rather than rise. This is down from a net balance of 28% in July. Read more to top Housing market news ONS: House Price Index - July 2010 The latest UK house price index statistics produced by Communities and Local Government were released on Tuesday 14th September 2010. The latest statistics release includes data based on mortgage completions during the month of July 2010. The key points from the release are: UK house prices were 8.4% higher than in July 2009 but 0.3% lower than in June 2010 (seasonally adjusted); The mix-adjusted average house price in the UK stood at £212,878 in July (not seasonally adjusted); UK house prices rose by 0.8% in the quarter to July 2010 compared to an increase of 1.1% in the April quarter (seasonally adjusted); Average prices increased in England (9.0%), Scotland (3.7%) and Wales (10.1%) but fell in Northern Ireland (-17.1%); Average prices paid by first time buyers increased by 7.5% over the year to July whilst prices paid by former owner occupiers increased by 8.7%; Average prices paid for new properties were 9.5% higher than a year ago and prices paid for pre-owned dwellings were 8.3% higher. Read more to top CML: July sees continuing subdued mortgage market Demand for mortgages in July continued to be weak in what is traditionally a strong month, according to the latest regulated mortgage survey by the Council of Mortgage Lenders. There were 56,000 loans for house purchase (worth £8.4bn) advanced in July, up from 52,000 (worth £7.7bn) in June, and from 53,000 (worth £7.3bn) a year ago. While this reflects the seasonal rise in activity at what is usually a strong part of the year, CML say these volumes still represent a very weak market. The 28,000 remortgage loans (worth £3.5bn) were unchanged from June and down from 40,000 (worth £4.9bn) in July 2009. Loans to first-time buyers declined to 19,400 (worth £2.4bn) in July, from 19,700 (also worth £2.4bn) in June and from 20,100 (worth £2.3bn) in July 2009. Having eased during the early part of the year, loan criteria have now tightened a little. First-time buyers put down average deposits of 24% in the month, unchanged from June but up from a recent trough of 21% in April and May. But low interest rates mean that interest payments continue to take up a relatively modest share of income. At 13.2% this was down slightly from the previous month and the lowest it has been since early 2004. First-time buyers' share of the market was at 34% in July, down from 38% in June. This is the lowest proportion since before the credit crunch began in August 2007. Lending to home movers picked up in July. There were 36,900 loans (worth £6 billion), up 13% in volume and 15% in value from June and 11% in volume and 20% in value from a year earlier. Like first-time buyers, home movers have seen their average deposits rise again -from 33% in June to 35% in July. But their interest payments as a percentage of income have held steady at 9.6% - still the lowest share going back to the early 1970s. Read more to top Building Societies’ Association: Property Tracker Survey The proportion of consumers surveyed in the September 2010 BSA Property Tracker Survey who do not think that this is a good time to buy a property has risen to 26% in September from 21% in June. The proportion of consumers who think that now is a good time to buy a property remained broadly unchanged at 44% compared to 45% in June. The lack of job security and the ability to raise a deposit remain the greatest barriers to property purchase with 56% of respondents choosing each of these barriers. Furthermore, the average 12 month house price forecast was flat in September compared to a 2.4% rise in June. Concerns over future falls in property prices was chosen as a barrier by 27% of respondents in September, an increase of 8 percentage points compared to 19% in June. Buy a property remained broadly unchanged at 44% compared to 45% in June. Paul Broadhead, Head of Mortgage Policy at the BSA commented: “It is clear that concerns about future falls in property prices are having a significant impact on consumer confidence. Whilst the survey indicates that consumers perceive access to a mortgage as less of an issue than in March (50% in September compared to 57% in March), job security remains a barrier to house purchase and is likely to remain so until there is greater confidence in the strength of the economy. Whilst credit conditions are perceived to have eased slightly, the BSA is urging the FSA to move cautiously on the final shape and implementation of the proposed Mortgage Market Review (MMR). As the proposals currently stand they could seriously limit access to mortgage finance for many credit worthy borrowers and further dampen hopes of a housing market resurgence.” Read more to top Economic news New Mortgage Backed Securities issued The Financial Times reported on Thursday that the Royal Bank of Scotland was lining up a £4.7bn sale of mortgage backed securities – the largest such deal since the financial crisis. Describing this development as “a sign of the rehabilitation of the mortgage market”, the FT also quoted an analyst at Global Securities as saying, ”Major uncertainties for banks, such as the bank stress tests and the Basel III announcement, have been removed and the funding market has become a lot easier for them”. Further trends in the securitisation market will be critical to the overall availability of future mortgage funding. to top ONS Retail Sales: August 2010 According to the latest data from the Office for National Statistics the seasonally adjusted value of retail sales in August 2010 rose by 1.9% compared with August 2009. The seasonally adjusted volume of retail sales in August 2010 rose by 0.4% compared with August 2009. The value of retail sales in August 2010 was 1.9% higher than in the same month a year earlier. Read more to top Events New Homes Month gets underway New Homes Month continued this week with media coverage in local and national news papers proclaiming the benefits of new build homes. Local newspapers across the country carried articles about new homes being ‘greener and cheaper’ and the ‘top reasons to buy new homes’ as the New Homes Marketing Board’s press releases were picked up. In Scotland both the Herald and Scottish Sun had full colour ‘New Homes Month’ supplements – driving potential customers to developments. To find out how to get involved contact nhm2010@hbf.co.uk to top Housing Market Intelligence – Shapps to provide keynote address Grant Shapps has this week confirmed that he will provide the keynote address at this year's Housing Market Intelligence conference. The 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. Other speakers confirmed so far include Persimmon chairman John White, Andrew Whitaker (HBF – planning), John Stewart (HBF – economics) and Michael Coogan, director general of the Council of Mortgage Lenders (CML). The event will 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 Housebuilder Awards 2010 – Huw Edwards to host. The Housebuilder Innovation awards will this year be hosted by Huw Edwards, presenter of the BBC’s flagship news at 10 programme take place on October 28th. 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 and to book your table for this year’s Housebuilder Awards please visit www.house-builder.co.uk/awards/ 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. We are pleased to announce that our 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 – 2009 prices held until 1st October! 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 For other HBF events visit the website For HBM events visit to top Rosie Hinchliffe View Previous Weekly News Summary
