Friday, 21st January 2011
Top stories this week
Localism Bill receives its second reading in Parliament.....read more
Rightmove: House price index.....read more
CLG: House price index.....read more
CBI Chief to speak at HBF Policy Conference.....read more
Bank of England: Trends in Lending, January 2011.....read more
CML: Gross mortgage lending subdued in December.....read more
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HBF news
HBF Localism Bill MP briefing
The HBF has produced a briefing document for MPs regarding the Localism Bill. The briefing was sent to all MPs ahead of the second reading debate on the Bill on 17th January.
Please click here to download a copy.
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HBF and members to give evidence to Localism Bill Committee
Both the HBF and some senior HBF members have been invited to give oral evidence to the Localism Bill Committee next week. The Committee is taking evidence from external bodies before commencing its detailed scrutiny of the Bill’s provisions.
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Government and political news
Localism Bill receives its second reading in Parliament – Government’s case
The second reading of the Localism Bill was held in the House of Commons on Monday. The debate enabled both the Government and Opposition to set out their positions and for backbench MPs to raise points they wish to be considered during the Bill’s passage through Parliament. The Bill will next go into its Committee stage – taking evidence, scrutinising the Bill and considering possible amendments.
Speaking in the debate, Communities Secretary Eric Pickles said:
“The Bill will reverse the centralist creep of decades and replace it with local control. It is a triumph for democracy over bureaucracy. It will fundamentally shake up the balance of power in this country, revitalising local democracy and putting power back where it belongs, in the hands of the people…
“The Bill is based on a simple premise: we must trust people who elect us and we must ensure that we trust them to make the right decision for their area…
“The Bill will give councils the powers and authority that they need. It will be a shot in the arm for local democracy. It will give councils a general power of competence. That is probably the single most important item in the Bill. It will turn convention on its head. It differs from a general power of well-being in one vital respect: instead of local authorities having to find a statute that allows them to act, the fun-loving legal advisers will have to find a statute that prevents them from taking action.”
On housing, Mr Pickles said:
“The Bill will give councils and communities the power that they need to tackle the housing challenges that they face. The coalition Government have inherited a deep housing crisis.”
Please click here to download a copy of the Localism Bill
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The Opposition response
For the Opposition, Shadow Communities Secretary Caroline Flint argued that the Bill gave powers to the Secretary of State rather than communities. She said:
“This Bill is meant to take power from Whitehall and devolve it to local communities, but we find on closer inspection that it provides an arsenal of more than 100 new powers for the Secretary of State.”
She also criticised the Bill’s proposals for neighbourhood plans, saying:
“The Secretary of State's own Department estimates that neighbourhood plans could cost as much as £250,000, we remain to be convinced that those plans are anything more than a gimmick or a vehicle for those with the loudest voices and deepest pockets to impose their will on the rest of the community.”
On housing she said:
“The Secretary of State knows that I support sensible reform of social housing, but it must be reform that encourages employment, supports families and helps to create strong communities where people feel safe. Simply abolishing secure tenancies and kicking new tenants out of their homes when they get a promotion or a pay rise would just create fear and uncertainty. It would disrupt family life, and it could provide a disincentive to work. We on this side of the House could never support reforms that put a break on aspiration.”
Other second reading remarks on housing and planning
Many MPs also spoke about the Bill’s provisions on housing and planning during the debate – with the proposed changes relating to social housing and tenure attracting much interest.
Conservative MP George Hollingbery said:
“Tenure reform was essential, and I believe that a change to a potential 80% of market rent in social housing is also very sensible for the simple reason that it is about recycling assets. It is about building more social housing; getting more income from people means more social housing being built in the future. That must be welcomed.”
Labour MP Clive Betts – Chair of the CLG Select Committee – said:
“On the reform of council housing, I am not against different forms of tenure. I believe that they have a place, but if the proposals on flexible tenure are put together with the 50% cut in funding for social housing-that is the Government's policy-the only social houses that will be built, after those that the previous Government committed to, will be those built on flexible tenure at rents related to market rent levels. The Government are thereby effectively ending the provision of any new social housing as we know it in this country, and I cannot agree with that. By all means let us have additional forms of tenure, but not at the expense of removing altogether the existing forms of social housing tenure for new build.”
On housing and planning more generally, former Labour Minister Nick Raynsford spoke and said:
“The housing and planning provisions will destabilise the planning and housing process at a time when, above all, we need confidence and certainty to get the new homes that we need. The housing market was badly hit by the recession and recovered strongly in early 2010, but the Government's maladroit and unlawful interference in the planning system has undermined that confidence. The market is now tottering along on the bottom, there is no confidence, and millions of people know that the prospects of getting a decent home at a price within their means are terribly short. The Bill's ill-considered and untested changes to the planning regime will make an already bad situation worse.”
Conservative MPs, including Stuart Andrew, Iain Stewart and Angie Bray, however, supported the changes to the planning system and the abolition of the Regional Strategies.
Please click here to view the Hansard transcript of the debate
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Government publishes plain English guide to the Bill
CLG has published a plain English guide to the Localism Bill.
The guide seeks to translate the complex legal language used in the 207 clause Bill in a transparent and reader friendly way, so anyone can understand how the Bill will devolve greater power and freedoms to councils and neighbourhoods, establish powerful new rights for communities, revolutionise the planning system, and give communities control over housing decisions.
Read more
Please click here to download the Plain English guide to the Localism Bill
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LGA responds to Localism Bill second reading
Responding to the second reading of the Localism Bill, LGA Chairman Baroness Margaret Eaton said:
“Councils are looking to the Localism Bill to put residents and councillors in control of their local area by freeing them from the bureaucratic tangle of Whitehall regulation.
“The main thrust of the Bill offers many of the things we’ve [LGA] been asking for. In particular, giving councils a General Power of Competence provides greater freedom to make decisions based on local needs. We are very pleased to see this long awaited and much-needed measure.
“However, the Bill identifies 142 powers for central government to lay down regulations, issue guidance and otherwise direct how localism will work. We think that threatens to undermine some otherwise positive attempts by Ministers to give people at neighbourhood level greater control over public services and planning.
“We don’t believe central government has a role in setting council tax or directing how income from Community Infrastructure Levies should be spent. We will be seeking amendments to give councils greater autonomy on those issues.
“We also want the Bill amended to reduce Whitehall influence over neighbourhood planning, rules governing who can buy local assets like pubs and post offices, and which bodies have the right to bid to deliver local public services.”
Read more
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Grant Shapps: Help for older tenants wanting to move
Housing Minister Grant Shapps has offered older tenants a dedicated officer to find them smaller properties more suited to their needs. Mr Shapps has announced a multi-million pound cash boost to landlords' efforts to better ensure their homes continue meet the needs of their residents.
Grant Shapps said:
"Older people can become the victims of their own changed circumstances, as the homes they have lived in for years become places to endure, not enjoy. As children grow up and fly the nest, these tenants can often find themselves trapped in larger family homes that no longer meet their needs.
"That's why I'm giving these residents the chance to start a new life in a new home that better meet their changing needs. Fifty councils from across the country will get a share of £13million to boost their efforts to make it easier for those wanting to downsize to do so.
"With a quarter of a million families in overcrowded accommodation and 1.8million households languishing on waiting lists, this will also help unlock larger family homes that are in such high demand."
Read more
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Housing market news
Rightmove: House price index
The latest house price index published by Rightmove, reported that:
Scarce new sellers raise their asking prices 0.3% (£711), the first rise for three months;
Property coming to market at its lowest level since January 2009, potential sellers of semidetached property, either unable or unwilling to move, being the most significant absentees;
Forecast of spring stock shortages to underpin prices in popular locations, as new seller numbers dwindle and record internet search activity indicates stirring buyer interest;
VAT increase ‘picks the pockets’ of those struggling to stay in their homes, as well as hitting first-time buyers and trader-uppers saving hard to clear deposit hurdles.
Miles Shipside, Director of Rightmove, comments:
“The opening skirmish in the 2011 price battle looks to be going marginally in favour of scarcer sellers, especially in locations preferred by tooled-up cash buyers or those packing a hefty deposit. With the number of new sellers at a two year record low, prices are being under-pinned by muted new supply just managing to fight off the downsides of lender reticence. However, in less popular locations, the smokescreen of New Year price optimism is temporarily masking the collateral damage that the new era of tighter credit will continue to inflict.
“This month’s price rise will come as a welcome respite to prospective sellers as they had witnessed falls in five of the previous six. However, it is a two-tier market. Those areas and property types coveted by mortgage-ready buyers are likely to experience a supply famine that will help underpin their prices this spring. Wherever those deposit-rich choose not to wander, the on-going mortgage famine will ensure sellers in those areas will remain buyer-hungry and will continue to see downward price pressure”.
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CLG: House price index
The latest UK house price index statistics produced by the Department for Communities and Local Government were released this week.
The latest statistics release includes data based on mortgage completions during the month of November 2010.
The key points from the release are:
In November UK house prices increased by 4.0% over the year but were slightly lower over the month (-0.1%, seasonally adjusted);
The average mix-adjusted UK house price was £208,585 (not seasonally adjusted);
Average house prices were 0.6% lower over the quarter to November, compared to a quarterly increase of 0.9% over the quarter to August (seasonally adjusted);
Average prices increased during the year in England (4.7%) and in Wales (3.0%) but were lower in Northern Ireland (-11.3%) and in Scotland (-2.4%);
Prices paid by first time buyers were 2.4% higher on average than a year earlier whilst prices paid by former owner occupiers increased by 4.6%;
Prices for new properties were 8.9% higher on average than a year earlier whilst prices for pre-owned dwellings increased by 3.7%.
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RICS: House price survey
The results of the latest (December) house price survey conducted by the Royal Institute of Chartered Surveyors (RICS) were published this week. It was reported that:
New instructions fell at their fastest pace since May 2009;
Enquiries continued to slip;
Sales expectations remained positive.
The December Survey showed more surveyors reporting prices falling rather than rising. However, the headline net price balance while still negative, improved for the second consecutive month, edging up from –44 to –39 i.e. 39% more surveyors saw prices fall rather than rise.
New buyer enquiries (demand) continued to fall in December, although at a lower pace. Meanwhile, new vendor instructions (supply) declined at a quicker rate than the previous month, with the net balance falling from –4 to –14, the lowest reading in over 18 months. Newly agreed sales continued to decline, with the net balance edging down from -14 to –15. Anecdotal evidence from surveyors suggests that lacklustre activity levels are related to the heavy snowfall during the month.
Transaction levels, although low, are showing some signs of stabilising with average sales per surveyor edging up slightly in December (up by 2.6% to 15.2).
Nevertheless, they remain well below their long run average (27 since 1994). Additionally, the average number of properties on surveyors’ books increased by 1.8% on the month to 70.8. Due to both sales and stocks rising by roughly similar amounts during the month, the sales to stock ratio remained largely unchanged (it edged up fractionally from 21.3% to 21.5%).
Simon Rubinsohn, RICS Chief Economist, commented:
“One aspect of the latest RICS Housing Market Survey that was little noted in the commentary on the numbers was the changing relationship between new buyer enquiries and new instructions.
“The former is effectively a measure of the change in demand while the latter tracks the change in supply. Although both series are net balances, the gap between the two has historically been a good lead indicator of the trend in house price inflation.
“In recent months, the gap has been narrowing and in the December data, it actually turned positive with the effective change in demand being greater than the change in supply for the first time since the end of 2009.
“This helps to explain the reason why we expect house prices to remain broadly stable this year, falling a little further over the next few months and then edging upwards in the latter part of 2011.”
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Economic news
Bank of England: Trends in Lending, January 2011
This quarterly publication presents the Bank of England’s assessment of the latest trends in lending to the UK economy.
According to the latest data, the stock of lending to UK businesses fell in the three months to November. The stock of lending to small and medium-sized businesses continued to contract, but syndicated lending facilities to UK businesses increased. The flow of net mortgage lending by all UK-resident mortgage lenders has remained subdued. Gross mortgage approvals for house purchase fell in December, according to data from the major UK lenders. The flow of net consumer credit was positive in September and October but slightly negative in November. The annual rate of growth edged up over the past three months, but remained low.
Spreads over reference rates on new lending continued to narrow for large businesses in 2010 Q4 according to the Bank of England’s Credit Conditions Survey, though were reported to have increased for small businesses. Spreads on mortgage lending remained elevated though some major UK lenders reported that competition among lenders at lower loan to value ratios had put some downward pressure on mortgage pricing. Effective interest rates on interest-bearing credit cards, personal loans and overdrafts remained broadly unchanged in the three months to November.
Notwithstanding a reported tightening of wholesale funding conditions over 2010 Q4, credit availability to households and to businesses overall was little changed, according to lenders in the Bank of England’s 2010 Q4 Credit Conditions Survey. Contacts of the Bank’s network of Agents noted that credit conditions for smaller businesses remained tighter than for larger corporates, though there were a few reports of a recent improvement in their access to credit. Demand for credit from businesses and households remained subdued in 2010 Q4, according to the major UK lenders.
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CML: Gross mortgage lending subdued in December
Gross mortgage lending in December was an estimated £11.0bn, according to the Council of Mortgage Lenders. This represents a 6% drop from £11.7bn in November. December was the fourth month in a row where the monthly outturn has been the weakest since 2000 (£10bn).
The figure is 18% lower than £13.3bn in December 2009, although comparisons are distorted as some households brought forward house purchase activity in the closing months of 2009 to take advantage of the stamp duty concession expiring at the end of the year.
Lending totalled £34.4bn in the fourth quarter, down from £37.9 billion in the previous quarter and 11% lower than the last three months of 2009 as a whole (£38.7 billion).
For 2010 as a whole, lending totalled £136.3bn, slightly above our annual forecast of £135bn. However, this is down 5% from £143.3bn in 2009 and the lowest annual total since 2000 (£119.8bn).
In the CML’s monthly market commentary published this week, the CML acknowledges that recent inflationary pressures have increased the possibility of a rate rise sooner than previously expected. However, the CML observes that most of the leading indicators show that the UK growth rate can be expected to slow markedly in the first half of this year, and the CML therefore expects that even if there is a rise, the base rate is unlikely to exceed 1% this year.
CML Economist Peter Charles says:
“Money market rates have recently moved higher in anticipation of a rise in base rate and some lenders have recently reflected these increases in their product pricing. Against this backdrop, consumer demand may be weaker than we would otherwise have expected. Higher interest rates will also hit the budgets of existing borrowers, although the expected modest rises in base rate will result in a relatively small proportionate rise in monthly payments for most mortgage holders. Consequently we believe there will be little change in the level of arrears this year, and we do not anticipate revising our current arrears forecast.”
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Industry news
NAEA: January jump creates a happy new year for housing market
The UK housing market saw a surge in the level of enquires, both for buyers and sellers in the first two weeks of January, according to estate agents.
The buoyant start to the year was recorded in a poll of almost 700 estate agents conducted by the National Association of Estate Agents (NAEA).
Almost two thirds (59%) of those surveyed said that the number of house hunters registering with them during the first two weeks of January was higher than they would normally expect for this time of year. A quarter (26%) said that levels were consistent with the average for January. Just 14% said things were worse than expected.
Similarly, the level of enquiries from potential sellers went up with 45% of NAEA members reporting an increase over the same period. Over a third, 36% of agents questioned said that figures remained steady.
NAEA President Mike Jones said:
“The results of this latest survey would seem to indicate a renewed confidence in the housing market as we begin 2011. It is encouraging to see that the majority of our agents are noting an upturn on both the buyer and seller sides and those that didn’t are still reporting steady figures consistent with January of last year.
“The market appears to have experienced a jump start to 2011. We are hopeful that this strong start to the year will continue into February.”
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Events
CBI Chief to speak at HBF Policy Conference,
Birdcage Walk, London Thursday 31st March 2011
New Director General of the CBI John Cridland will speak at this year’s HBF Policy Conference. Also confirmed this week is Richard Hill, Deputy Chief Exec of the HCA.
The HBF’s Annual Spring Policy Conference will address the key issues impacting on the industry in 2011 – including Localism, Mortgages and Finance and Affordable Housing. Speakers will join senior HBF staff in discussing with delegates the challenges facing the industry.
A full list of list of speakers and details of how to book will be available very shortly.
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Save the Date! - HMI conference and annual report launch,
Wednesday, 12th October 2011, Savoy Place, London
The ninth annual Housing Market Intelligence conference will be held on 12th October 2011 and will include the launch of the annual Housing Market Intelligence Report. Over the best part of the past decade, the Housing Market Intelligence conference has established itself as the leading event for business planning and strategic thinking in the private sector house building industry.
Full details available soon.
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Save the date – The Housebuilder Awards 2011
Thursday 3rd November, Millennium London Mayfair Hotel
The Housebuilder awards, the highlight of the house building calendar, celebrate the very best of industry and the achievements of those leading the way in innovation.
Details of how to enter and to book a place at the awards will be posted shortly.
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The Zero Carbon Hub Conference 2011 – Tomorrow's New Homes- Definition and delivery of low and zero carbon
1st February 2011 - Kings Place, London
Housing Minister confirmed to speak!
The Zero Carbon Hub Conference is designed to bring delegates right up to date with the issues surrounding zero carbon, looking specifically at the definition and delivery of the zero carbon homes policy. An exhibition alongside the conference will showcase key products and services to aid delivery.
For more information or a booking form please visit www.house-builder.co.uk/zch or call 020 7960 1646.
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Habitat for Humanity – Hope Challenge 2011!
HBF’s nominated charity Habitat for Humanity has announced that its annual fundraiser ‘The Hope Challenge’ will take place next year from 11-13th July. The event involves a weekend in the stunning Peak District national park where participants take part in a series of challenges and have to build their own shelter in which to spend the Saturday night.
Want to know more? Then email hopechallenge@habitatforhumanity.org.uk or call 01295 264240.
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HBM Business Manager to travel to Nepal – can you help?
Housebuilder Media Business Manager Helen Board will next year travel to Nepal with HBF’s nominated charity Habitat for Humanity, to work with homeless people in what is one of the poorest countries in the world.
During her time there she will work with the HFH people on the ground to build a home for a family.
To make the trip possible she has to raise £2600 and is looking for sponsorship.
Please click here to sponsor Helen or to find out more http://www.habitatforhumanity.org.uk/HeleninNepal
For other HBF events visit the website
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Rosie Hinchliffe
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