HBF Weekly News Summary Friday, 24th September 2010

Friday, 24th September 2010

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Government and political news

LibDem Conference backs localism motion

“For too long, local government has been run in a command and control fashion from Whitehall. What Liberal Democrats in government are doing now is setting councils free from top-down diktats and allowing local people to have a real say in local decisions.”

Liberal Democrat Autumn Conference has reiterated its commitment to devolving power to local people and called for the Government to be ambitious in its plans for decentralisation.

Conference this week passed a motion calling for:

The strengthening of local authorities to give local people more power in their communities;

The freeing up of local administration by ending detailed central control;

Giving local government financial autonomy and more revenue-raising powers.

Commenting, Liberal Democrat Minister for Communities and Local Government Andrew Stunell said:

“Localism is in the Liberal Democrats’ DNA, and today we have once again demonstrated our commitment to putting power back in the hands of people on the ground, not bureaucrats in Whitehall.

“Different communities have different needs – what works in Windsor won’t necessarily work in Warrington, and this principle will be central to the forthcoming Localism and Decentralisation Bill.

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Mayor and HCA to help 1,000 families get a foot on property ladder

Nearly 1,000 families, currently in rented and particularly overcrowded accommodation, might be able to take their first step towards owning their own home in London under plans unveiled by the Mayor of London, Boris Johnson, and the London Homes and Communities Agency (HCA).

The First Steps for families initiative supports the Mayor's aim to increase the proportion of family sized homes built for low cost home ownership. It will see up to 1000 new homes made available over the next 3 years to families aspiring to own their new property, with around 250 ready by next summer. There is strong support from both London boroughs and housing associations who have included their own sites in the programme in addition to sites put forward by the HCA.

The Mayor said:

"Many Londoners dream of being homeowners but are thwarted by the colossal property prices in London. My overriding ambition is to make the capital a city of opportunity and choice and more affordable for ordinary Londoners."

"We are already making strides towards building better homes and offering more choice to families, particularly those currently stuck in overcrowded accommodation. Today we begin extending the opportunity to those Londoners, who have only ever rented their council or housing association property, to start building up a stake in their new home and fulfilling that dream."

David Lunts, London director at the HCA said:

"We're committed to increasing the availability and choice of larger homes for families in London. This innovative approach to delivering intermediate homes will help Londoners achieve their homeownership aspirations. By using the HCA's Delivery Partner Panel to appoint development partners for these initial sites, we'll be able to speed up the procurement process and start on site at the earliest opportunity."

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Industry news

CITB-ConstructionSkills to be privatised

The Daily Telegraph this morning carried a leaked report detailing that CITB-ConstructionSkills is to be privatised. It was included in a long list of so called ‘quangos’ that are to be abolished, merged, or privatised.

Architectural body CABE is also included in the list as ‘still under review’, as is the Building Regulations Advisory Committee (BRAC).

Mark Farrar, Chief Executive, CITB-ConstructionSkills stated:

“Media reports arising from a leaked list published first in The Telegraph on Friday and widely reported in the news elsewhere, names 177 bodies to be scrapped, 4 bodies to be privatised and 129 to be merged. If the list is to be believed, CITB-ConstructionSkills is one of the bodies to be privatised."

“We had no prior warning of this and it is unclear at the moment if the leaked list is the final one – or what is meant by ‘privatisation’ in our case. We have good relations with government and have a number of meetings in the diary with Mark Prisk MP, Construction Minister and John Hayes, Minister for Educations, Skills and Lifelong Learning, where we will endeavour to clarify our position."

“Our main focus is to make sure that we add value to our industry in the most effective way. Over the last eighteen months we have streamlined our operation and, this week, we have been looking at a range of options for our future with our industry-led Board. We will take the opportunity to discuss this further with the Board on 12 October.”

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CML - Who cares about housing? Everyone!

Virtually everyone (96%) believes that the UK has housing problems, according to new research undertaken for the Council of Mortgage Lenders by YouGov.

The biggest problem is seen as the fact that young people cannot afford to buy, or take on too much debt to do so, cited by 80% of respondents.

Too many people on housing waiting lists (48%), housing market boom and bust (44%), the cost of moving house (37%), and the lack of supply of new homes (35%) were also seen as problems - but each of these was cited by fewer than 50% of respondents, paling by comparison with the perceived plight of young would-be first-time buyers.

Yet consumers appear sceptical about whether the government can make a difference. While 15% thought it likely or very likely that the government could improve first-time buyer affordability over the next five years, 80% thought it unlikely or very unlikely.

Indeed, there was a high degree of scepticism about the likelihood of the government alleviating any of the problems identified. In every case, the proportion of people who felt help was unlikely exceeded the proportion who felt it was likely. However, the balance of opinion was less negative about the likelihood of government addressing energy efficiency (-2%), the size of new homes (-10%), and the prospect of some social tenants transitioning to the private sector (-14%).

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British Gas and Mears announce partnership to deliver energy management for social housing

British Gas, the UK's largest supplier of low carbon, energy efficient products and services and Mears, a leading provider of repairs and maintenance services to the social housing sector, announce a strategic partnership to bid on repair and maintenance contracts in the social housing sector.

From this week, Mears and British Gas will jointly bid on repair and maintenance contracts in the social housing sector, with British Gas delivering energy services as well as providing access to Carbon Emissions Reduction Target (CERT), Community Energy Saving Programme (CESP), Feed-In Tariff and Renewable Heat Incentive funding, to subsidise energy efficiency measures and renewable and low carbon technology.

Phil Bentley, Managing Director of British Gas said:

"The growing importance of a 'whole house' approach to energy management underpins the rationale for this partnership and we are delighted to be working with Mears. It is particularly welcome given that housing budgets are likely to come under pressure over coming months, and will also contribute to meeting Britain's stretching carbon reduction targets. By co-ordinating British Gas' and Mears' expertise and experience, we are confident we will improve the quality of social housing throughout the UK at the lowest possible cost."

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FMB: Four out of five small house builders say restrictions on mortgage lending is causing building output to fall

Even tougher restrictions on mortgage credit would be a disaster for the housing market which is already suffering its worst slump in decades, warns the Federation of Master Builders (FMB).

Responding to the suggestion from the Financial Services Authority Chairman, Lord Turner, for tougher restrictions on mortgage credit as a long term policy Richard Diment, Director General of the FMB said:

"Responsible lending must be at the heart of the renewal of the UK's financial system, but restricting further the availability of mortgage finance will keep responsible borrowers out of the market. More good borrowers are needed urgently to get the housing market moving. Further restrictions will add fuel to the fire. Such a measure would only worsen to the severe housing shortage in this country which includes nearly five million people on social housing waiting lists. Almost 240,000 new homes are needed every year from 2008 to 2031. As a result of the financial crisis the UK built just 123,000 new homes in 2009/10 and numbers are not set to rise to anything close to the necessary levels in the near future. "

Diment concluded:

"The banking crisis has led to changes in the price and availability of mortgage finance to first time buyers. In a recent survey of FMB members, 67 percent of house building respondents felt that lack of mortgage finance was preventing potential clients from buying homes from them, and 79 percent indicated that lack of mortgage finance was causing the business to slow the rate of building. The FSA must ensure the system entitles lenders to some local discretion so mortgages are more, not less, accessible at reasonable rates for responsible borrowers."

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Housing market news

Rightmove: House price index

The latest Rightmove house price index reported that:

New sellers drop average asking prices by 1.1% (£2,474), the third consecutive monthly fall. The average house price now stands at £229,767;

Prices have now fallen by 3.4% in the last three months, half way towards wiping out the gains made in the first six months of the year;

September saw 26,000 new properties come to market per week, the lowest since April;

Average unsold stock per agent stabilizes at 79 after six consecutive monthly rises;

While supply might be easing off, proceedable buyers are still an endangered species. Sellers still need to get their autumn tactics right if they hope to move before Christmas.

Miles Shipside, Director of Rightmove, comments:

“The ‘double-dippers’ will be able to point to a clear downward trend, with new sellers dropping their asking prices for three months on the bounce. They can cite tough competition amongst sellers and agents struggling to find proceedable buyers for their record levels of unsold stock. Conversely, we are also recording the lowest weekly run-rate of fresh sellers since April. This will give some ammunition to those forecasting a flatter price trajectory as it could be an early sign of fresh supply beginning to wane. However, whether you think we are bumping along the bottom of a U-shaped recovery or are about to double-dip into a W, your property will need to tick all the right boxes to sell this autumn”.

“September’s fall of 1.1%, following on from the reverses of 0.6% and 1.7% recorded in July and August, means that new sellers are asking £8,016 less than those that came to market in June. Nearly half the 7% gains in asking prices seen in the first half of 2010 have been wiped out by recent falls and, with the less active months of November and December ahead, national average asking prices are on course to end the year where they started. Where they go from there depends on the ongoing balance between supply and demand.

“There has been a slight easing of fresh supply this month. An average of 26,087 properties a week came on to the market in September, the lowest weekly run-rate since April. This is also down 11% on the 29,220 recorded in our [Rightmove’s] August index.”

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CML: Gross mortgage lending declines in August

Gross mortgage lending declined to an estimated £11.4bn in August, down 14% from £13.3bn in July and 6% from £12.1bn in August 2009, according to new data from the Council of Mortgage Lenders.

This is the lowest August total since 2000 (£11.1bn). Lending volumes are likely to remain below last year’s level in the coming months as activity was buoyed by the upcoming end of the stamp duty holiday in the last few months of 2009.

In this week’s market commentary, CML Chief Economist Bob Pannell commented:

“We face the prospect of a difficult second half of the year. However, the Bank of England is likely to keep interest rates at record lows for longer to support the economy. This will continue to alleviate payment pressures for many borrowers.”

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Economic news

Bank of England: Trends in Lending September 2010

According to the latest data released by the Bank of England the flow of net lending to UK businesses remained negative in July. Some indicators of corporate distress, such as the liquidations rate, eased in 2010 Q2. Contacts of the Bank’s network of Agents noted that while credit conditions were easing for larger businesses, they remained tight for smaller firms. Most major UK lenders reported that demand for credit remained subdued. The spread over Libor of the effective interest rate on new lending to companies was broadly unchanged in July.

The flow of net sterling mortgage lending by all UK-resident mortgage lenders slowed in July to £0.1bn, though the annual rate of growth in the stock of lending was broadly stable at 1.0%. According to data from the major UK lenders, net mortgage lending flows were little changed in August.

Data provided by the major UK lenders also include a split of gross lending between house purchase and the refinancing of existing mortgages (remortgaging). As in recent months, gross mortgage lending for house purchase was little changed in August. Remortgaging activity continued to be weak.

In the official data, total mortgage approvals for house purchase were unchanged in July. Data from the major UK lenders indicated that their mortgage approvals for house purchase decreased slightly in August and were the lowest since April 2009. The Royal Institution of Chartered Surveyors’ new buyer enquiries balance remained negative in August, indicating a weakening in demand for house purchase. The major UK lenders reported that demand for secured credit continued to be subdued.

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CBI: Economic recovery will continue, but growth will be restrained in 2011

The CBI expects the UK economy to continue to grow, and at a slightly faster pace in 2010 than had been expected. But the pace of recovery looks to be more sluggish in 2011 than previously forecast, following measures announced in the emergency Budget to deal with the deficit.

The outlook for consumer spending next year is now weaker as households will have less disposable income due to ongoing high inflation, resulting from January’s VAT rise, and modest wage increases.

In its latest economic forecast, the CBI predicts that the UK economy will grow by 1.6% in 2010, up from 1.3% in its previous forecast in June. The slight upward revision reflects better than expected growth in the second quarter this year as companies began rebuilding their stocks.

The CBI has revised down its GDP forecast for 2011, to 2.0% from 2.5% in June. This takes into account the additional fiscal consolidation measures announced in the emergency Budget, which took place after the CBI’s June forecast.

Richard Lambert, CBI Director-General, said:

“The degree of uncertainty around the outlook remains high, but our view is that the UK’s tentative recovery will be sustained, albeit with weaker levels of growth.

“The fragile nature of the recovery is why, in the forthcoming spending review, the Government must focus its scarce resources on those areas which most galvanise growth, namely infrastructure and capital investment.”

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Bank of England: Minutes of the Monetary Policy Committee meeting 8th and 9th September 2010

The Bank published the minutes of the last MPC meeting at which it was decided to maintain the official Bank Rate paid on commercial bank reserves at 0.5%. The Committee also voted to maintain the stock of asset purchases financed by the issuance of central bank reserves at £200bn. The minutes state that:

“On balance, most members thought that the current level of Bank Rate and stock of asset purchases financed by the issuance of central bank reserves remained appropriate to balance the risks to the inflation outlook in the medium term. But both key risks were substantial, and these members stood ready to respond in either direction as the balance of risks evolved. For some of those members, the probability that further action would become necessary to stimulate the economy and keep inflation on track to hit the target in the medium term had increased.”

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Events

New Homes Month gets underway

Hundreds of media outlets have now covered the New Homes Marketing Board’s New Homes Month promotional campaign, with articles appearing in the print, broadcast and digital media promoting the benefits of new homes.

The campaign runs until a week on Sunday and has seen events taking place on sites across the country.

Many national and regional newspapers have run specific NHM supplements, and feedback from Members has been extremely positive.

Examples of media coverage (a full report containing all media coverage will be available after the campaign concludes);

Builders spotlight the benefit of new homes

Why a new build home is greener and better value

To find out more about NHM contact nhm2010@hbf.co.uk

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Housing Market Intelligence – Shapps to provide keynote address

Grant Shapps 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

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Housebuilder Awards 2010 – Huw Edwards to host.

The Housebuilder Innovation awards, that takes place on October 28th, will this year be hosted by Huw Edwards, presenter of the BBC’s flagship news at 10 programme.

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 book your table for this year’s Housebuilder Awards please visit www.house-builder.co.uk/awards/

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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.

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HBF Technical Conference, Birmingham – 1 week left to take advantage of early booking discount.

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.

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For other HBF events visit the website

For HBM events visit

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Rosie Hinchliffe

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