HBF Weekly News Summary Friday 18 January 2008

The latest industry news written by Jo Weston HBF.

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New research from Halifax estimates that the value of the UK's private housing stock rose by 9% (nearly £320bn) in 2007 to a record £4.0 trillion (£4,000 billion). The value of the housing stock has more than tripled over the past decade, rising by 208% from £1.3 trillion in 1997. By comparison, the headline retail price index (RPI) has risen by 31% over the past ten years.

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In response to the soaring cost of wholesale energy, higher distribution costs and increased environmental obligations, EDF Energy this week announced an increase in its gas and electricity prices effective from today.

Electricity will rise by 7.9% and gas by 12.9%. The bill for a typical dual fuel customer is calculated to rise by an average of just over £1.92 per week. EDF follows Npower, Britain's fourth-largest power supplier, who increased its prices by 17 percent for gas and 13 per cent for electricity at the beginning of January.

Commentators predict that other energy suppliers are likely to follow suit.

The RICS house price balance for December dropped to its lowest level since November 1992. 49.1 per cent more Chartered Surveyors reported a fall than a rise in house prices, down from 40.6 in November 2007. In November 1992 60.1 percent more Chartered Surveyors reported a fall than a rise.

RICS also reported a 4% a rise in new instructions to sell property, compared with -7% in November whilst 25% more Chartered Surveyors reported a fall than a rise in buyer enquiries down from 31% in October.

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Highlights

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During evidence given to Planning Bill Committee, Ministers undertook to publish a document explaining their thinking on the proposed Community Infrastructure Levy (CIL) in more detail. The document is likely to be published around the end of this month to help inform the Planning Bill Committee's consideration of the Bill's clauses on the CIL.

HBF is separately working with the British Property Federation to submit proposals for amendments to the Bill to meet the main concerns we raised on its CIL provisions in our evidence last week to the Bill Committee.

In a meeting with the London Chamber of Commerce and Industry, John Gieve - Deputy Governor of the Bank of England - discussed the recent financial market disruption, its impact on the UK economy, and the increase in immediate inflation pressures from energy and food.
On the housing market he said:

"There is no doubt that the housing market has been weakening significantly in recent months and the trend is more advanced still in commercial property markets where prices are falling rapidly. It is widely assumed that weakening property prices will also depress consumption. The Bank has tended to be sceptical of this mechanism.

While property prices and spending tend to move together, that doesn't prove that one causes the other. Both may result from changes in income and expectations of future income. Indeed, in the same way as you can't have your cake and eat it, it is not clear that a general increase in house prices does create extra spending power for the population as a whole. Owners who expect to remain in their current house for a long time cannot also spend their housing wealth and the benefits to those trading down are broadly offset by the costs to those trading up. While older owners may be richer and believe they can support a more expensive lifestyle, the rise in prices will show through in higher rents and larger deposits for those wanting to get on the ladder.

But even if there is not a strong causal connection between house prices and consumption through a wealth channel, there may nevertheless be a significant collateral channel. When house prices fall, the amount of housing equity and hence collateral at homeowners' disposal decreases. This will tend to delay spending as lenders are willing to lend less or lend on less favourable terms to those who have little or no housing equity. That channel should have become less important in recent years. This is because most homeowners have substantial equity in their homes which would not be materially affected by relatively modest changes in house prices. This may help to account for a decline in the correlation between real house price growth and consumption since the beginning of the decade".

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HBF Director of External Affairs John Slaughter took part in a meeting of HBF's European trade association, UEPC, with the European Commission on Tuesday. The meeting focused on energy efficiency and the Commission's prospective plans to promote improvements in building performance standards across the EU. It was a useful opportunity to highlight key issues for developers based on HBF's experience on the zero carbon homes objective. The Commission was grateful for these views as it begins to consider the revision of the European Energy Performance of Buildings Directive (which creates the requirement for Energy Performance Certificates).

30 January at One Birdcage Walk, London

The Government has called on the UK house building industry to increase house building levels to 240,000 homes per year and to build homes to zero carbon standards by 2016. This full day conference is perfectly timed at the start of next year to give delegates a detailed and comprehensive overview of the issues facing the industry.

For further details or to book please visit our website. Alternatively contact the events team on 0207 960 1646 events@hbmedia.co.uk

Ecobuild returns to Earls Court, London between 26-28th February 2008.

The exhibition will be double the size with over 500 exhibitors, more than 75 free seminars and a series of new attractions linked to the key themes - zero carbon, water management and renewable energy.

With zero carbon legislation looming, Ecobuild's Road to zero carbon - realised as a series of external wall elevations - shows how different combinations of superstructure, insulation and cladding can contribute to a low carbon outcome. It is anticipated that the Zero carbon house by Zedfactory, which will reach the Code for Sustainable Homes Level 6, will attract the most attention at the show. This teamed with the dedicated zero carbon seminar programme should assist with educating delegates on ways to meet the forthcoming challenges.

Register for your free invitation to the show now at http://www.ecobuild.co.uk/

23rd April 2008 at the Hyatt Regency-The Churchill, London

Please note due to high demand in previous years, places are strictly on a first-come first-served basis and booking early is highly recommended.

For further details or to book please click here

Alternatively contact the events team:

Tel: 0207 960 1646
email: events@hbmedia.co.uk

22 February 2008 at Sketchley Grange, Hinkley

This year the AGM is being held at The Sketchley Grange Hotel, Hinckley. This is an excellent chance for everybody working in the housing industry, at all levels, to review the previous year and forward plan for 2008, as well as networking with peers.

For further details or to book contact the events team on 0207 960 1646 events@hbmedia.co.uk

Jo Weston

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