HBF Weekly News Summary Friday 19 October 2007

All the latest news in the industry.

Quick LinksIndustry News Economic News Housing Market News Government News HBF News Industry News Home owners will have to wait up to 208 years to recoup energy saving costs, according to RICS

New home owners acting on information provided in an Energy Performance Certificate (EPC) will have to wait up to 208 years to recoup the costs of their energy saving measures, according to new research published by the Royal Institution of Chartered Surveyors (RICS).

The research, conducted by RICS' Building Cost Information service (BCIS), forms part of RICS' Housing Green Paper response to Government and outlines cost-recovery-times based on energy bill savings for all elements of EPCs which are part of the Home Information Packs (HIPs).

Payback times for EPC energy improvements on an average three bedroom terraced house range from 5 years for cavity wall insulation, to 208 years for solar heating. The next most viable energy improvement is loft insulation which will take home owners 13 years before they begin to notice any real savings, says RICS.

The report states that people, on average, spend 16 years living in the one property making most of the EPC energy saving measures financially unattractive propositions for over half of home owners.

Other common energy saving measures include double glazing (124 years), boiler replacement (38 years), and under-floor insulation (61 years).

View further information and payback times

to topBritish Gas warns of danger of missing UK's CO2 reduction targets as it launches Britain's biggest energy saving challenge

British Gas has launched Green Streets, Britain's biggest energy saving challenge and warned that too much focus on 'homes of the future' could undermine the UK's chances of meeting its stated targets of reducing CO2 emissions by 60% from 1990 levels by 2050.

British Gas have said that as a result of poor insulation, £1 in every £3 spent heating homes in the UK is wasted and that the current trend of focusing on the standards of new build housing fails to address this issue. Green Streets, a year-long social experiment which is being monitored and analysed by the Institute for Public Policy Research (IPPR), will demonstrate what can be achieved by households up and down the country in existing homes.

Eight households in each 'Green Street' across eight major UK cities have been selected to show what can be done to reduce domestic CO2 emissions. Each street is being given a budget of £30,000 to spend on domestic energy saving equipment - from energy efficient light-bulbs, to cavity wall insulation, right up to solar panels and heat pumps. The 'Green Streets' - in Manchester, Leeds, London, Birmingham, Edinburgh, Cardiff, Plymouth and Southampton - will compete against one another in this unique national energy saving experiment.

More detail on the Green Streets initiative

to top Economic NewsRecent economic developments from the CBI

Recent economic report from the CBI shows:

CPI inflation remains below the Bank of England's 2.0% target for the third consecutive month. Elsewhere in the economy, earnings growth is relatively benign despite continued tightening in the labour market, and retail sales growth has accelerated.

CPI inflation has remained unchanged at 1.8% in September, with falls in the price of gas and electricity helping to offset a sharp rise in the price of food. Meanwhile, inflation on the RPI measure eased to 3.9% from 4.1%.

Claimant count unemployment was 835,800 in September, down 12,800 on August's figure, and falling for the twelfth consecutive month. The ILO measure of unemployment also fell, down 5,000 to 1.65 million over the three months to August.

Headline average earnings growth excluding bonuses was 3.7% in the three months ending August, up 0.1% on July's rate. The equivalent figure including bonuses was also 3.7%, up 0.2% on the previous month.

Retail sales volumes increased by 0.6% between August and September. Meanwhile, the underlying growth rate accelerated in the three months to September to 1.7% - its strongest since July 2006, and up from 1.3% previously.to top Housing Market NewsIMF alert on risk to housing market

The UK is among the countries most at risk of a steep housing market downturn, with property even more over-valued than it was in the US before the recent correction, the International Monetary Fund said on Wednesday. The IMF cut its forecasts for world economic growth next year and warned that if tight credit conditions persisted, their effect on US and European housing markets could be a significant drag on the global economy.

"There remains the concern that the US experience might presage steep housing downturns in other countries that have also experienced a rapid rise in house prices," the IMF said in its World Economic Outlook, in which it cut its forecast for UK growth in 2008 from 2.7 to 2.3 per cent.

The IMF admitted however, that there was "considerable uncertainty" over its estimates, since its model did not include factors such as constraints in the supply of housing - seen as a key reason for the speed of UK house price increases.

Average house price in the UK £219,528 in August up from £218,479

The CLG have released their house price index for August which shows that the mix-adjusted average house price in the UK in August 2007 stood at £219,528, up from £218,479 in July 2007 (not seasonally adjusted).
UK annual house price inflation in August 2007 was 11.4 per cent, down from 12.4 per cent in July 2007. Annual house price inflation in London was 17.4 per cent in August, down from 19.1 per cent in July.
The UK annual house price inflation rate for the 3 months to August was 12.0 per cent and 18.0 per cent in London.

To view the full house price index

to top12% fall in gross lending in September according to CML

Gross mortgage lending fell by nearly 12% in September compared with August, to an estimated £30 billion according to new data from the Council of Mortgage Lenders (CML).

The CML have reported that, although lending was up 2.5% on the £29.2 billion figure for September 2006, the annual increase is the lowest percentage increase in two years. The figures are not seasonally adjusted.

While lending typically falls between August and September, a 12% decline is larger than the norm of around 5%. This easing in the market is another sign of the expected consumer response to the five interest rate rises experienced since August 2006, CML say.
Commenting on the data, CML Director General Michael Coogan said:

"We have been expecting a slowdown in monthly lending levels in line with interest rate rises. In the coming months, we expect to see monthly lending levels dip below their 2006 levels for the first time this year as rate effects are exacerbated by the recent liquidity problems in the mortgage market."

‘HIPs deadline scramble' masks price standstill according to Rightmove

The latest house price index from Rightmove reports the following:

HIPs continue to distort the market, leading to fluctuations in new supply and average asking prices; this month's 2.7% rise reverses previous month's 2.6% fall

Price slowdown continues as 3-month on 3-month rate of change falls from 1.5% to 0.5%, the lowest quarterly rise since the winter of 2005

Tougher market conditions see longest October time on the market for 5 years,
whilst average stock levels highest for this time of year since market stalled in 2004

HIP deadline sees new 3 bedroom sellers jump 65% on weekly average. Volatility in new supply and prices is forecast until HIPs are fully implemented

View full price index

to topAHIPP- Comment on Rightmove's October House Price Index

Commenting on Rightmove's house price index, the Association of Home Information Pack Providers (AHIPP) said;

"The Rightmove data and commentary published suggests that the introduction of Home Information Packs (HIPs) has had a distorting effect on the housing market. However, the data also suggests that listings of four bedroom properties are already returning to more normal levels, a trend which will no doubt be repeated with three bedroom homes over the next few weeks. In other words, this ‘HIP effect' on listings is a short lived phenomenon, while the long term impact of HIPs will benefit the market for home buyers and sellers."

Rejected mortgage applications up 60 per cent in six months according to moneyexpert

New research by moneyexpert.com shows that the number of mortgage application rejections has risen by some 60 per cent since March. In the six months to March, around 463,000 people had a mortgage application rejected. This figure has since risen to 738,000 in the six months to October which moneyexpert attribute to the Bank of England interest rate rises hitting home owners and as borrowers come up against tougher lending criteria.

The research also showed that of the 738,000 people who had mortgage applications rejected in the six months to the beginning of October, applicants aged between 25 and 34 were worst affected. Around four per cent of people in this age bracket have had an application turned down - around 382,000 young mortgage applicants.

1m pay rent or mortgage with credit card according to Shelter

More than a million householders have used credit cards to pay their mortgage or rent in the past 12 months, according to a new survey published by ROOF, Shelter's housing and homelessness magazine.

The survey, conducted by YouGov for ROOF magazine, polled two thousand households following the Northern Rock crisis. Six percent of respondents who pay mortgages or rent said they had relied on a credit card to make payments, equating to a national figure of more than a million householders.

to top Government NewsReport on London Plan published

The Panel Report on the Examination in Public (EiP) of the Further Alterations to the London Plan was published on 9th October.

The Report endorses the Mayor's approach to delivering more affordable housing by supporting the lowering of the threshold to trigger affordable housing from 15 to 10 units. The Panel accepted the Mayor's argument that since eight London Boroughs were already successfully operating this threshold without damaging housing delivery, it was appropriate to apply this threshold across London.

The Panel has also delivered a very ‘green' report, applauding the Mayor's commitment to tackling climate change and endorsing most of the Mayor's challenging environmental targets, including the Mayor's target of doubling the provision on on-site renewable energy from 10% - the ‘Merton' target in the current London Plan - to 20%. The Panel believes that developers can absorb these challenging targets for the delivery of on-site renewables, cut carbon dioxide emissions, meet higher levels of the Code for Sustainable Homes, mitigate flood risk, connect-up to off-site renewable supplies, as well as other environmental measures, without adversely affecting profitability and housing delivery. The report believes that developers should be ‘stretched' to ensure that they invest in the innovations necessary to achieve the various stages of the Plan's environmental targets in the next 10-15 years.

The report can be sourced at: http://www.gos.gov.uk/gol/Planning/Developmentplans/?a=42496

The full HBF briefing on the Panel Report can be viewed by members on the website please click here

If you do know your membership login to the website please email Catherine.Wilson@hbf.co.uk

to topOffice for Tenants and Social Landlords announced by Government

Housing and Planning Minister Yvette Cooper announced the creation of a new standalone social housing regulator, to be called The Office for Tenants and Social Landlords, in Parliament this week.

The regulator, whose creation was recommended as part of Professor Martin Cave's review of social housing regulation, published in June, will be implemented in the forthcoming Housing and Regeneration Bill.

This new body will replace the role currently played by the Housing Corporation. The new office will ensure that landlords provide a good service to their tenants, complementing the role of the Homes and Communities Agency in delivering 30,000 new affordable homes a year.

Yvette Cooper said:

"If housing associations are doing a good job they should have less red tape. But if tenants aren't getting a good deal, we need much stronger action.

Social housing tenants shouldn't have to put up with bad service from landlords. Long waits for repairs or worries about poor security can make people's lives a misery."

to top HBF NewsHBF Response to the Housing Green Paper

HBF submitted its response to the Government's Housing Green Paper on Monday. The response welcomed many of the Government's proposals such as the increased target for additional dwellings of 240,000 per year by 2016 and proposals to assist the delivery of more land for housing through the planning system, including its commitment to ensuring that all local planning authorities have a 5-year housing land supply.

Of more concern was the suggestion that Government should look at ways of ensuring that land with planning permission was developed more quickly.

The Green Paper will result in a plethora of further legislative changes and policy consultations, most of which are expected to be published around the turn of the year.

View HBF's response to the Green Paper

HBF response to consultation on private sewers transfer implementation options

HBF has responded to this consultation and has offered to work with the Government to resolve those issues that relate to new housing. It is intended that the transfer should take place in 2010 and Defra is seeking views on how best to achieve this.

We have commented on the difficulties in reaching a national agreement on an adoptable standard and proposed statutory obligations for sewerage undertakers . We have expressed concerns about the engineering problems of providing sewer connections on dense sites and the potential conflict with other sustainability drivers.

View HBF Consultation Response

to topHBF response to consultation on DEFRA's proposed EU soil framework directive

HBF has responded to this consultation, which follows a workshop earlier this year at which Defra sought views from a wide range of organisations. HBF is not convinced of the need for a Directive to protect soil and are concerned that proposals to limit soil sealing could have an adverse impact on the housing provision objectives. It is also proposed to require member states to compile a list of contaminated sites with a programme for remediation which has the potential to blight sites. There is some confusion about some of the definitions and various amendments have been proposed by other member states during the course of this consultation. The Portuguese presidency is keen to see progress on this so it is possible that a draft will be published later this year.

View HBF Consultation Response

HBF promotes European industry debate on sustainability

HBF Board member Mike Freshney chaired a discussion on sustainability at the latest meeting of the European Trade Association for home builders and developers (UEPC) this week.

The discussion which HBF also officiated, agreed to develop a positive strategy focusing on energy and carbon efficiency issues to influence the thinking of the European Commission and Parliament on this field and so help developers in their own countries too.

Amongst other actions it was agreed to develop an industry charter.

Bookings now being taken for the HBF Technical Conference

The HBF Technical Conference entitled ‘the road to zero carbon is paved with building regulations' will be taking place at York Racecourse on Wednesday 14th November 2007.

View the full agenda for the day and book online