Friday, 26th November 2010 Top stories this week Shapps: We're lifting burdens from the backs of builders.....read more Reform of Homes and Communities Agency unveiled.....read more Shapps slams FSA proposals.....read more Community Infrastructure Levy to remain.....read more ONS: Household Projections, 2008-2033, England.....read more BBA: October figures for the main high street banks......read moreFollow us on Twitter! www.twitter.com/homebuildersfed Quick Links Government and political news Housing market news Industry news Economic news HBF news Events Government and political news Shapps: We're lifting burdens from the backs of builders Housing Minister Grant Shapps yesterday announced in his speech at the NHBC Annual Lunch that he is scrapping the HCA’s proposals for new core standards. He also pledged an overhaul of the range of different building standards that collectively make it hard for developers to complete their projects. The HCA’s proposed core standards for publicly funded housing or homes built on publicly owned land – consulted on earlier this year - would have cost developers an estimated extra £8,000 for every home involved. HBF’s response to the consultation raised a range of concerns about the impact of the proposals and the loss of housing delivery that would result. Mr Shapps also pledged to end the 'alphabet soup' of local building standards and red tape that blight efforts to get developments started, and sweep away the bureaucratic assessment regimes that accompany them. He invited the industry to come forward and help develop a new system for local standards so new development meets the needs of local communities, without placing an unnecessary strain on developers. Mr Shapps said: "Today is the first step of many towards reducing the unnecessary cost and hassle that the people who build our homes are forced to endure. Last year, house building slumped to the lowest level in peacetime since 1924. We were in the midst of a recession, but the situation was made much worse by regional targets that forced developers into direct conflict with local communities, and compounded by the alphabet soup of regulations and red tape that house builders have to navigate. "We are on the side of families who want more good quality homes available - that's why we're scrapping expensive new standards for homes built with Government cash and on public land. There's no good reason why homes built on public land should be built any differently to those of high quality on private land. So I'm getting rid of this unnecessary requirement, and I'll be working hard to make sure that, in the long run, the standards that apply to private and public housing are exactly the same. "I'm also calling time on the cocktail of local building standards that developers have to meet, some of which are directly contradictory. House builders are the experts at building homes, so I'm inviting them to be in charge of developing a new framework for local building standards - one which enables communities to get the high quality homes they demand, but without causing unnecessary costs and delays for developers." HBF Executive Chairman Stewart Basely said: "Having campaigned for a reduction in the 'regulatory burden on new homes' for many years it's great that the Government has recognised the impact the cost of excessive regulation has on the supply of the homes the country desperately needs. We look forward to working with local and national government to create a simpler, less costly system which will go a long way to helping solve our housing crisis." Mr Shapps also confirmed that the recent review of Building Regulations will be published shortly, and will keep the regulations as the mechanism to set national minimum standards. Starting today, there will be an opportunity for developers to make suggestions for further deregulation of the industry. Read more to top Reform of Homes and Communities Agency unveiled Housing Minister Grant Shapps and Homes and Communities Agency (HCA) Chief Executive Pat Ritchie have announced plans to transform the HCA into a smaller enabling body working for local communities on their priorities. This week’s statement follows a review of the role of the HCA as part of the Spending Review process. They will lead to a reduction in its running costs by half over two years, saving the taxpayer over £100m by 2014-15. Key elements of the plans, which will be delivered within the CSR period, include: A 50% reduction in HCA running costs from over £80m per year to around £40m per year; Reducing the number of HCA Directors from 12 to six, with the potential to reduce this further over time; A reduction from 17 to four core HCA offices, with locations to be finalised as HCA work within the broader DCLG and public sector estate rationalisation programme. Grant Shapps said: "We are committed to building more affordable homes and regenerating local communities. The HCA will play a vital role in delivering this radical agenda, but with a new working ethos of communities in charge, drawing on the expertise that the HCA has to help them achieve their priorities. The plans we are announcing today will enable local communities to do just that - while also saving the taxpayer over £100m. "Like all areas of the public sector, the changes I am announcing today mark the start of a process, not the end. HCA will need to remain flexible to deal with new challenges that will continue to emerge in the coming months and years." Pat Ritchie, HCA Chief Executive said: "Government has given the HCA an important role in meeting the housing and regeneration priorities of local authorities and communities, and in regulating the housing sector to command lender confidence and protect the taxpayer. We have therefore created a top structure with a strong local focus that will provide effective leadership and engagement with local partners while saving money. Further changes will flow from this top structure, maximising the potential of our expertise and investment to help local authorities achieve ambitions for their own areas." Read more to top Local decisions: a fairer future for social housing This document sets out the Government's plans for radical reform to the social housing system. It includes changes on tenure; the management of waiting lists; and the homelessness duty. It also covers the introduction of a new 'affordable rent' tenancy and changes to the system of council housing finance. It includes measures to improve mobility, tackle overcrowding and under-occupation. The reforms will ensure that social landlords can make better use of social housing and target support where it is needed most. Housing Minister Grant Shapps said: "For far too long in this country there has been a lazy consensus about the use of social housing, which has left one of our most valuable resources trapped in a system that helps far fewer people than it should. This out-of-date approach has seen waiting lists rocket and is unfair to people who genuinely need social homes. They trap existing tenants in poverty, often in homes that aren't suitable for them. "So the current system is ripe for reform, and the changes we're bringing in will ensure that from now on our social housing helps as many people as possible. The new system will protect the most vulnerable in society, ensuring those in greatest housing need are given priority. It will also be more flexible, with councils and housing associations able to offer fixed tenancies that give people the helping hand they need, when they need it. But above all it will be fairer - councils will now be able to make decisions that genuinely meet the needs of local people, and the changes will not any affect any existing tenants." Communities Minister Andrew Stunell said: "To have five million people stuck on social housing waiting lists is unacceptable - clearly this system is broken and needs a radical overhaul. "We need to have a much smarter system that protects lifetime tenancies, but also provides the flexibility to ensure that help is targeted at people who really need it, and enables us to get more for every pound of taxpayers' money. In times of economic hardship, it is vital that social housing is effective in helping people get back on their feet." Read more Download a copy of the consultation document PMQs: New homes bonus Mark Pawsey (Rugby) (Con) put forward this question to the Prime Minister during Prime Minister’s Questions this week: “Now that the Government have brought forward details of their new homes bonus, will the Prime Minister join me in applauding councils such as Rugby borough council, which is proceeding with proposals for substantial development?” The Prime Minister answered: “I do think this is important. For years, we were spending lots of money on housing but not building any houses-why? Because there was no incentive for local authorities and few incentives for house builders. We are changing that so that even though the resources are limited, a lot more house building will go ahead.” HBF in the news HBF’s Planning Director Andrew Whitaker this week took part in a piece on Localism and housing supply for the BBC’s Politics Show. Please click here to watch again (piece starts 38 minutes) to top Housing market news Shapps slams FSA proposals Speaking at the NHBC lunch yesterday, Housing Minister Grant Shapps said that the FSAs proposals were a ‘step too far’ suggesting he himself wouldn’t have been able to get a mortgage had they been in place previously! The issue has again been widely reported in the media this week. Read more to top HBF meets the lenders Michael Coogan, Director General at CML, this week attended HBF’s Metropole members meeting. Douglas Cochrane from Lloyds and Andrew Baddley-Chappell from Nationwide were also present to discuss mortgage lending and the FSAs proposals. John Stewart, HBF’s Director of Economic Affairs, attended a Bank of England roundtable discussion about the housing and mortgage markets. He also had meetings with officials from No.10 Downing Street, Treasury and DCLG, at which mortgage finance, mortgage regulation and the longer-term outlook for first-time buyers were discussed. Turner offers little hope for first-time buyers Lord Turner, Chairman of the Financial Services Authority, has hit back at critics who have accused the regulator of creating a “mortgage famine” with strict new regulations on lending, especially for first-time buyers. He told MPs that “easy credit it not necessarily good for first-time buyers” and that excessive lending in the bubble had created a “clear tail of very harmful lending.” However, he also said that the FSA would look at the balance between denying sound borrowers of loans and preventing a repeat of the mistakes during the boom. He said the FSA’s Mortgage Market Review was not complete and they would “think very, very carefully” about the consequences of new regulation. The Council of Mortgage Lenders has previously criticised the FSA’s proposals, telling the regulator it should “think again”. According to the CML’s research, the new rules would prevent 150,000 people from being able to buy or move house in the coming months. Lord Turner argued that for many of those 150,000, it was not a question of whether they can get a mortgage at all, but whether they have one at 90 or 85% of the value of the property. Many industry insiders now see a lack of demand from would-be buyers as a more significant factor than a lack of finance. Read more to top Industry news Community Infrastructure Levy to remain Planning Minister Greg Clark announced the Government’s intention to keep the Community Infrastructure Levy (CIL) subject to some minor amendments. Previously the Conservatives had announced their intention to scrap CIL and introduce “a single unified local tariff”. In making his announcement the Minister said: "Communities should reap the benefits of new development in their area and these reforms will put in place a fairer system for funding new infrastructure while also providing certainty for industry. "Too little of the benefits of development go to local communities, and our ambition is to correct that with a reformed levy under genuine local control. Neighbourhoods will now get a direct cut of the cash paid by developers to councils - to spend how they wish to benefit the community, from parks and schools to roads, playgrounds and cycle paths. "Our decentralising changes will also benefit developers through a system that is flexible, predictable and transparent while also cutting the red tape and bureaucracy faced by councils. "Alongside the New Homes Bonus, this is another way to make sure communities benefit from development in their area. It will help change the debate about development from opposition to optimism." Please click here to view. The Government proposes to amend some parts of CIL as set out in the Planning Act 2008 and the CIL Regulations of 2010. Those reforms that require legislation will be included in the Localism Bill while amendments to the regulations will be made under the existing provisions of the 2008 Planning Act and will come into force on 6th April 2011. The proposed changes are thought to be mostly technical with the most significant change being that “a meaningful level” of CIL will have to be paid to the local communities in which the development is sited. In an attempt to align CIL to the localism agenda the report of the examiner of the CIL schedule will no longer be binding on the charging authority but the authority will have to demonstrate how it has addressed any concerns of the examiner before adopting its CIL charging schedule. There are no changes to the provisions of the CIL regulations that relate to the scaling back of S106 agreements. These remain as proposed by the 2010 regulations including the statutory tests of necessity. Similarly, affordable housing and development by charities remain exempt from paying CIL. Further details or clarification on the announcement should be directed to HBF Planning Director Andrew Whitaker at Andrew.whitaker@hbf.co.uk or Tel 020 7960 1626. to top ONS: Household Projections, 2008 to 2033, England The latest national statistics on household projections to 2033 for England were released in line with the Code of Practice for Official Statistics this week. This Statistical Release presents National Statistics on the projected number of households in England and its regions to 2033. The figures in this release are based on the 2008-based population projections and replace the 2006-based household projections released in March 2009. Key points from the latest release are: The number of households in England is projected to grow to 27.5 million in 2033, an increase of 5.8 million (27%) over 2008, or 232,000 households per year; Population growth is the main driver of household growth, accounting for nearly three-quarters of the increase in households between 2008 and 2033; One person households are projected to increase by 159,000 per year, equating to two-thirds of the increase in households; By 2033, 19% of the household population of England is projected to live alone, compared with 14% in 2008; By 2033, 33% of households will be headed by those aged 65 or over, up from 26% in 2008; The South East region has the largest absolute increase in households of 39,500 per year from 2008 to 2033, amounting to a 28% increase on the number in 2008; The North East region shows the smallest growth in households, at 8,500 per year from 2008 to 2033, amounting to a 19% increase on the number in 2008; The 2008-based projections show a lower growth in households compared with the 2006-based projections, equating to 20,500 fewer households per year between 2008 and 2031 in England. Read more to top HCA: Support confirmed for Housing PFI schemes Thirteen housing schemes currently in procurement and worth over £1.2bn will continue to be supported through the Private Finance Initiative during the next spending review period, the Department for Communities and Local Government (DCLG) and the Homes and Communities Agency (HCA) confirmed this week. Twenty-five housing schemes under contract will also continue to be supported, however funding support will be withdrawn for a further 13 pipeline schemes that would have cost an additional £1.9bn. DCLG's decision – set out in a joint letter to Local Authorities from Richard McCarthy, director general for housing and planning at DCLG and HCA chief executive, Pat Ritchie – follows a review of housing PFI that could have seen support for all non-contractually committed schemes withdrawn, given DCLG's tight spending review settlement. Commenting on the Department's decision, Pat Ritchie said: “I am pleased that despite having to make some tough decisions following the Spending Review, DCLG is able to commit support for these housing PFI schemes which have the potential to make a real difference to local communities. “At the HCA we will now concentrate on helping Local Authorities maximise the impact of available funding, through our expertise on procurement and other technical services. We will also work with those councils which have received disappointing news today, to look at any ways in which their objectives might be supported through a non-PFI route.” Read more 'E' rating on climate policies shows UK must do better to decarbonise by 2050 The UK may have world-leading climate legislation, but it is still lagging behind other EU Member States on many of its climate change policies, according to a new tracking tool launched by WWF and Ecofys which ranks countries on a scale from A (excellent) to G (poor). The Climate Policy Tracker for the European Union provides an up-to-date snapshot of greenhouse gas emission controls across the EU and contains stark reading ahead of global climate change talks in Cancun. The UK is compared against other Member States on all policy areas that influence greenhouse gas emissions. The UK scores a 'best in class' B-rating for the long-term, legally binding framework set out in the Climate Change Act. However, we trail behind countries including France, Sweden and Ireland on transport and Denmark on buildings, ending up with an average E rating. The report notes that the UK’s zero carbon standards for new residential buildings are unique in Europe, but are not yet supplemented by support for existing buildings. The UK is planning to introduce a Green Deal for homes in the forthcoming Energy Bill – but it will need to make sure that this is well-designed and resourced if it is to increase its E rating in this sector. Read more to top Economic news BBA: October figures for the main high street banks The annual growth in the banks’ net mortgage lending was 3.5% in October, substantially ahead of the 0.8% for the whole mortgage market in September, according to the latest data from the British Bankers’ Association. BBA Statistics Director, David Dooks said: "Activity in the mortgage and consumer credit markets continued to be subdued in October, reflecting uncertain prospects for households and lower consumer confidence. "Credit availability for viable businesses has improved, so a continued contraction in net lending growth reflects repayment behaviour, particularly by larger companies." Read more to top ONS: UK output, income and expenditure 3rd quarter 2010 The Office for National Statistics this week released the UK output, income and expenditure statistics for quarter 3. The release reported that UK gross domestic product (GDP) in volume terms rose by 0.8% compared with the previous quarter, unchanged from the estimate published in October. The volume of output in the production industries rose by 0.6%, within which manufacturing rose by 1.0%. Other key findings include: Output of the service industries increased by 0.6%; Construction output is estimated to have increased by 4.0%; In real terms, household expenditure has increased by 0.3% compared with the previous quarter, while gross fixed capital formation rose by 0.6%; GDP at current market prices rose by 1.0%. Commenting on the preliminary GDP figures for the 3rd quarter of 2010, David Kern, Chief Economist at the British Chambers of Commerce, said: "The revised GDP figures confirm an expected increase for Q3 of 0.8%. However predictions that the annual growth figure would be revised down proved unfounded. Year-on-year growth remains at 2.8%, a very respectable figure. "The UK recovery remains on course and is broadly based. All major sectors recorded growth, despite an erratic strong surge in construction which partly reverses previous sharp declines. The detailed GDP figures show positive features, with strong growth in manufacturing output, and in exports. "The figures confirm our assessment that the UK economy is in a more robust state than many had thought. But we have not yet seen the impact of the tough deficit-cutting measures that the Government will start implementing early in the New Year. Businesses and consumers will face growing pressures in the next few months, and it is important to avert risks of a setback." Read more CBI: Retailers eye Xmas boost as high street sales strengthen The volume of sales on the high street was higher in November than a year ago, for the fifth consecutive month, as shoppers started gearing up for Christmas. The CBI’s latest quarterly Distributive Trades survey revealed that 55% of retailers saw the volume of sales rise in the two weeks to November 10th, while 13% said they fell. The resulting rounded balance of +43% was in line with expectations, and an improvement on October’s balance of +36%. However, a net 6% of retailers said sales in November were below average for the time of year. Sales grew most strongly in November for grocers and clothing retailers. The three-monthly moving average of sales volumes, which smoothes out monthly peaks and troughs, edged higher to a balance of +43%. Looking ahead to the crucial pre-Christmas period, retailers expect strong sales volume growth to continue in December (+45%), and a net 11% of retailers expect the overall business situation to improve over the next three months. After extremely sharp cuts to investment spending during 2008-2009, for a second quarter running, retailers are planning to invest more over the next 12 months, compared to last year (+28%). Ian McCafferty, CBI Chief Economic Adviser, said: “High street sales growth held up well in November, and retailers are hopeful that the run-up to Christmas will be just as strong. “However, looking into the New Year, retail sales growth may lose some of its sparkle, as consumers rein in spending after Christmas. “Confidence remains fragile, VAT is rising in January, and a combination of weak wage growth and high inflation is eating into household incomes.” Read more to top Measuring Changes in Housing Wealth Inequality - Economics paper 6: Volume 2 This paper is the sixth in the DCLG Economics Papers Series. Housing has become a large part of our lives and more people rely on housing investment to form their wealth assets. Volume II consists of an article by Gwilym Price and Eric Levin from the University of Glasgow, which examines changes to housing wealth inequality. Read more Housing and Regional Economic Disparities - Economics paper 5 This paper is the fifth in the DCLG Economics Papers Series. Regional economic disparities are a long-standing feature of the UK economy, and regional house price differences or planning policy are often cited as contributing factors. Housing is likely to contribute to regional disparities, but there is a danger of blaming housing for more deep-seated social issues. Although policy undoubtedly is important, this paper points to the more subtle influences of housing markets in economic outcomes. In particular, the role of housing in influencing human and physical capital stocks is examined. While more research is required, this report argues that history matters and that there are no quick fixes. Read more to top HBF news Nearer to Zero Conference The “Nearer to Zero” conference on planning for zero carbon homes – jointly organised by HBF, Woking Borough Council and the Zero Carbon Hub - was held this week in Woking. The event was sold out and attended by many local planning officers and HBF members. Delegates heard about the latest Government position, the work of the Hub – currently focusing on the level at which the requirement for on-site measures should be set – and developer and planning issues, including the need to balance the cost of the zero carbon policy against other regulatory and policy demands if development viability is to be safeguarded. Delegates also took part in workshops to discuss the potential obstacles to delivery and how these might be overcome. The feedback from the conference will inform the work of the Zero Carbon Hub and policy thinking within Government on the new planning system and its policy framework. In view of the event’s success, the partners are considering running further such events in other parts of the country. to top Events 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. to top 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 July 11-13. 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. Read more to top For other HBF events visit the website For HBM events visit to top Rosie Hinchliffe View Previous Weekly News Summary
