Friday, 27th August 2010 Top stories this week Bank of England: Trends in Lending, August 2010.....read more CML: Proportion of income needed for home-mover mortgages in Scotland lower than anywhere else in the UK.....read more CLG and Department for Transport - councils urged to cut street clutter.....read more CLG: Code for Sustainable Homes, June Quarter 2010.....read more HBF now on Twitter!......read more New Homes Month – just a week to go!......read more Quick Links Economic news Government and political news Housing market news Industry news HBF news Events Economic news Bank of England: Trends in Lending, August 2010 According to the latest data from the Bank of England, the flow of net lending to UK businesses remained negative in June. The stock of lending to all the main sectors of the economy contracted in 2010 Q2. Some major UK lenders reported that spreads on lending to larger corporates continued to fall, but by a diminishing amount. Spreads on lending to small and medium-sized enterprises were little changed. Contacts of the Bank’s network of Agents noted that credit conditions for smaller businesses remained tighter than for larger corporates, with demand for bank finance generally remaining weak. The flow of net sterling mortgage lending by all UK-resident mortgage lenders was little changed in June at £0.7bn, and the annual rate of growth in the stock of lending was stable at 0.9%. According to data from the major UK lenders, net mortgage lending flows were broadly unchanged in July. Data provided by the major UK lenders also include a split of gross lending between house purchase and the refinancing of existing mortgages (remortgaging). Gross mortgage lending for house purchase was unchanged in July, remaining close to levels seen during 2010 Q2. Remortgaging activity continued to be weak. The availability of secured credit to households has not changed significantly since the start of the year, as reported by lenders in the Bank of England’s Credit Conditions Survey. In some contrast to this measure of secured credit availability, the total number of advertised mortgage products increased markedly in the first two quarters of the year, according to data from Moneyfacts Group. Most major UK lenders noted that their view of recent changes in secured credit availability was closer to that indicated by the “Credit Conditions Survey”. Read more to top CML: Proportion of income needed for home-mover mortgages in Scotland lower than anywhere else in the UK Home movers in Scotland in the second quarter of 2010 needed to use less of their income to cover their mortgage interest than anywhere else in the UK, according to new data by the Council of Mortgage Lenders. The proportion fell to 9.3%, the lowest share anywhere in the UK since 1996. CML data shows that 12,700 loans for house purchase (worth £1.4bn) were advanced in Scotland in the second quarter, up from 9,800 (worth £1.1bn) in the first quarter. This was a larger increase than the rise seen in the UK as a whole but the first quarter had been artificially weak across the whole country due to the end of the stamp duty holiday at the turn of the year. House purchase loans were also up from 11,500 (worth £1.2bn) in the same period a year ago. First-time buyers took out 4,700 loans (worth £419m) in Scotland from April to May, up 18% in volume and 27% in value from January to March and up 9% in volume and 13% in value from the same period last year. There were modest signs of a further easing in lending criteria in the second quarter with first-time buyer deposits shrinking for the second quarter running - they needed on average 21% deposit compared to 23% in the first quarter. In the UK as a whole there have been recent signs that the easing has slowed, so the CML do not necessarily expect this trend to continue next quarter. Home movers in Scotland took out 8,000 loans (worth £1bn) in the second quarter - up 36% in volume and 34% in value from the first quarter and 11% in volume and 15% in value on the second quarter in 2009. Home movers saw a modest decrease in the size of deposits with the average being 29%, and a slight increase in income multiples to 2.67. Reflecting a similar trend across the UK, remortgaging activity in Scotland remains extremely subdued. The 8,000 loans for remortgage (worth £800m) were up 14% in both volume and value from January to March, but down 11% from a year ago. Read more to top CBI quarterly Distributive Trades Survey Volumes of sales on the high street were higher than a year ago in August, the second consecutive year-on-year increase, according to the latest CBI quarterly Distributive Trades Survey. Retailers expect sales to continue growing in September and they are more optimistic about the general business situation in the coming three months. Over half of the retailers surveyed (53%) said that the volume of sales rose during the first two weeks in August while 18% said that it fell, giving a balance of +35%. This was similar to the pace of sales growth in July (+33%), and the fastest since April 2007, though it was slower than expected (+45%). Sub-sectors seeing the strongest growth were: clothing, grocers, durable household goods, footwear & leather, and hardware & DIY. The balance for the underlying trend, the three-monthly moving average of sales volumes, was +21%, which is the strongest figure since July 2007 (+22%). Read more to top ONS: UK output, income and Expenditure 2nd quarter 2010 According to the latest data released by the Office for National Statistics, UK gross domestic product (GDP) in volume terms rose by 1.2% in the second quarter 2010 compared with the previous quarter, revised from an increase of 1.1% published in July. The volume of output in the production industries rose by 1.0%, within which, manufacturing rose by 1.6%. Output of the service industries increased by 0.7%. Construction output is estimated to have increased by 8.5%. In real terms, household expenditure has increased by 0.7% compared with the previous quarter, while gross fixed capital formation fell by 2.4%. GDP at current market prices rose by 1.7%. Read more to top Government and political news CLG and Department for Transport - councils urged to cut street clutter Councils are being urged by Ministers to get rid of unnecessary signs, railings and advertising hoardings in a bid to make streets tidier and less confusing for motorists and pedestrians. Communities Secretary Eric Pickles and Transport Secretary Philip Hammond are concerned that the character of the country's urban spaces is being damaged and have written to council leaders calling on them to reduce the number of signs and other 'street clutter'. The Government believes that in some cases traffic signs and railings are installed by councils in the mistaken belief that they are legally required. However, although some signs are required by law, Government advice is that for signs to be most effective they should be kept to a minimum. To help councils do this the Department for Transport is reviewing traffic signs policy and new advice on how to reduce clutter will be published later this year. Ministers want communities to inform local authorities of particularly bad examples of clutter as part of the Big Society in action. Eric Pickles said: "Our streets are losing their English character. We are being overrun by scruffy signs, bossy bollards, patchwork paving and railed off roads wasting taxpayers' money that could be better spent on fixing potholes or keeping council tax down. We need to 'cut the clutter'. "Too many overly cautious townhall officials are citing safety regulations as the reason for cluttering up our streets with an obstacle course when the truth is very little is dictated by law. Common sense tells us uncluttered streets have a fresher, freer authentic feel, which are safer and easier to maintain. "Organisations like Civic Voice, Living Streets and fixmystreet can help councils provide a Big Society solution - local people carrying out street audits will bring power and character back to neighbourhoods." Read more to top Councils get power to decide how best to support service improvements Communities and Local Government Minister Bob Neill has announced a major new 'localism' proposal to cut red tape and hand over financial control of council service improvements and training to local government leaders. Under new proposals, the Local Government Association (LGA) or a similar body will take control over how to use funding that gets redirected, or 'top-sliced', by Whitehall from the Revenue Support Grant (RSG) councils receive each year. At present Central Government directs the funding to be received by each of nine local government improvement organisations. In 2009-10 this 'top-slice' amounted to £45m. The organisations including such funding include the Improvement and Development Agency (IDEA). In future, the total grant would be unringfenced and delegated to the designated local government body to allocate to funding programmes in the best way to improve council services, build strong local leadership, meet learning and development needs, and nurture robust local economies. Bob Neill said: "The LGA have called for this change, and have rightly taken steps to make their organisation more transparent so we can look at how to devolve this funding with confidence. By cutting the red tape around improvement funding councils can push even harder to make sure they have the tools and expertise to be fully focused on delivering frontline services that matter to people most and getting the best value for taxpayers' money." Read more to top Housing market news Halifax: Improved affordability proves less constraining for first-time buyers Research from the Halifax Bank has revealed that monthly mortgage payments as a percentage of income are currently nearly half that of the level of 2007. In contrast, over half of first-time buyers say that affordability is the main reason why they have not stepped onto the property ladder. The numbers of first-time buyers in the first half of 2010, at 94,600, are half that of the same period for 2007, but have increased by 28% against the same period last year. Other key findings include: Despite slower growth in house prices and interest rates holding at historically low levels, only 35% of buyers say that they are taking advantage of the current economic climate; Eight out of ten first-time buyer loans are approved; 94% of all first-time home purchases are now exempt from stamp duty; Only 3% of first-time buyers state that a lack of mortgage products has held them back from purchasing their first home; First-time buyers put down an average deposit of £30,380 in 2010 quarter 2, equivalent to 22% of the property price; The typical buyer takes between three and five years to amass their deposit in the current market; A 10% deposit on an average first-time buyer property today is £13,940; 64% of buyers purchase a home because they’d rather own than rent; Seven in ten are making lifestyle sacrifices in order to save their deposit; Nearly a third of first-time buyers are stepping onto the property ladder in order to take the next step in life such as getting married or having children; One in ten buyers is putting off getting married or having children in order to buy a home; 12% are taking a second job to help their finances; Over a quarter of homebuyers have not been on holiday in over a year to save money for a deposit; 10% move back in with their parents to help save for their deposit; 44% of buyers will compromise on the area they move to in order to get the type of property they want. Read more to top RICS: Rents increase further as lettings market buoyed by greater activity The lettings market remains buoyant, as increased tenant demand and a shortage of properties pushes rents higher, according to the latest RICS Residential Lettings Survey. 26% more chartered surveyors reported a rise in demand for property rather than a fall, which was the second consecutive quarter that lettings demand has risen at a pace above the long run average. Tenant demand increased across all regions, but was strongest in London and the East of England. Continued difficulty in securing mortgage finance, worries over a double dip in housing and large deposits required by lenders are leading to higher numbers seeking to rent rather than buy. As a result, rents increased for the second consecutive quarter, with 27% more surveyors reporting a rise in rents than a fall. Just a year ago the picture was very different, as over supply pushed rents down and 29% more surveyors reported falling not rising rents. Although interest rates are at a record low - making property a potentially attractive option for investors - difficulty in securing buy-to-let mortgages is contributing to the lack of supply. New supply of property to the market remains low and has now fallen for four consecutive quarters, although at a slightly slower pace. In the run up to July the net balance of surveyors reporting a fall in landlord instructions was -6, in comparison to a net balance of -12 in the previous quarter. However, existing landlords do not appear to be in any rush to dispose of their property; just 4.1% of landlords said they intended to sell their properties at the end of a tenancy agreement. Read more to top Industry news CLG: Code for Sustainable Homes, June Quarter 2010 The latest official statistics on the Code for Sustainable Homes and Average Energy Efficiency (SAP ratings) were released on 20 August 2010. Statistics in this release relating to the Code for Sustainable Homes show the number of dwellings that have been certified to the standards set out in the Code Technical Guide. Key points from the latest release are: There were 7,984 post construction stage certificates and 27,129 design stage certificates issued up to and including June 2010; 10% of homes with post construction certificates and 22% of those with design stage certificates have been built by the private sector. 90% of homes with post construction certificates and 78% of those with design stage certificates have been built by the public sector; Between April 2007 and June 2010, 24,186 dwellings at the design stage received a three star rating and 287 dwellings received a six star rating; Between April 2007 and June 2010, 7,148 dwellings at post-construction stage received a three star rating and eight dwellings received a six star rating; The majority of the certificates issued since April 2007 at design stage (89%) and at post construction stage (90%) have been awarded at Code level 3; In April - June 2010 (Q1): The average energy efficiency, SAP rating, of new homes in England was 79.5 and in Wales 78.6; Regionally, the average energy efficiency (SAP rating) of new homes varied from 78.2 in the South West to 82.4 in London; By dwelling type, in England, the average energy efficiency (SAP rating) ranged from 77.5 for bungalows to 80.1 for houses; In Wales, the average energy efficiency (SAP rating) by dwelling type ranged from 68.0 for maisonettes to 80.0 for flats. Read more to top Homes for Scotland: Private sector housing production halved Homes for Scotland commented this week on the Scottish Government’s latest housing statistics. These show the major impact the economic downturn of the last two years has had on Scotland’s home building industry with a 47% fall in the number of private new homes completed over 2009/10 compared with 2007/08 and a 52% drop in the number of private new homes started over the same period. Jonathan Fair, Chief Executive of industry body Homes for Scotland, said: “Prior to the onset of the credit crunch, our industry built 20,000 private new homes each year and supported the employment of 100,000 people across the country. Now both have essentially been halved and vital private sector investment in infrastructure and other key community facilities has severely diminished. “The industry has had to make huge readjustments but remains committed to providing the thousands of private new homes Scotland’s growing population needs and aspires to. First, however, the UK Government must resolve the continuing difficulties surrounding mortgage lending. If it doesn’t, the social and economic consequences will be dire.” Read more Download a copy of the housing statistics to top HBF news HBF now on Twitter! HBF has this week entered the social networking age and started tweeting! To find out the latest up to date news from HBF sign up and follow us click here. to top Guardian reports on planning system change Peter Hetherington this week wrote a piece for the Guardian on the impact of the new Government’s changes to the planning system, that included a reference to a HBF compiled report based on member feedback. The story starts; ‘In the battered housing world, with building levels plunging to historically low levels, the noun "deconstruction" has a special relevance among key players in the private and public sector. It applies to the collective mindset of the Department for Communities and Local Government (CLG) which, until recently, set housing targets through regional planning. Then, with a new Conservative secretary of state, Eric Pickles, it decided to scrap everything by telling councils to go back to the drawing board. ‘Out went targets and, in many places, the whole planning process under which town halls granted permission for new housing. Result? Hundreds of house-building projects delayed, or scrapped, with tens of thousands of planned homes shelved. The consequences for construction workers, 4.5 million people on town hall waiting lists for social housing, and young couples anxious to get on the housing ladder, don't bear thinking about. Read more to top Events New Homes Month – just a week to go! New Homes Month 2010 is now just a week away. The campaign, that is being run by the New Homes Marketing Board (NHMB) will see event taking place on sites up and down the country that aim to highlight the benefits of new homes and drive potential customers to site. The NHMB is overseeing a media campaign that should generate positive media coverage in the local, regional and national media. Already articles are starting to appear and it is hoped the campaign will match last year’s success in generating hundreds of articles across the country. The Daily Telegraph will be publishing a New Homes supplement to kick of the campaign on Saturday week. Companies that ordered copies of the New Homes News newspaper should be receiving them in the next few days. To find out how to get involved contact nhm2010@hbf.co.uk to top North West Social dinner – just two weeks to go. There are just two weeks to go until the return of the North West Social dinner. This event, which has not taken place for the past two years, will see hundreds of industry representatives gather in Manchester for an evening that includes a three course meal, live music and dancing. It takes place on Friday 10th September at the Midland Hotel in Manchester. Everyone is welcome at an event that attracts members from across the North and Midlands. Always a lively and fun event, regular attendees are booking keenly for what will be a fun filled industry evening. Please click here to find out more to top Housing Market Intelligence 2010 – 12th October, Savoy Place, London This year’s Housing Market Intelligence 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. This year the event is expected to 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 to top HBF Planning Conference – 16th September 2010, Hilton Hotel, Bristol HBF’s Planning Conference this year will be looking at how the industry can ‘make localism work’’. Delegates will be considering; Will the industry be able to deliver new houses under localism? What are the new tools needed? If we are redesigning the planning system will we also be brave enough to redesign the current planning obligations process? How can we put S106 agreements back into the box now that local authorities expect so much? There will be a range of speakers from central and local government, the industry and its advisors. Please click here to see the full agenda, download a booking form and to book online or contact events@house-builder.co.uk with any questions. to top Housebuilder Awards 2010 – Early booking until 10th September – Book your table now! To see the full shortlist for this year’s Housebuilder Awards please visit www.house-builder.co.uk/awards/ 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 on the night of Thursday 28th October at the Millennium London Mayfair Hotel. To book your table at the Housebuilder Awards and take advantage of the early booking discount, please visit www.house-builder.co.uk/awards/ to top 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. We are pleased to announce that our supported charity for this year’s Ball is Habitat for Humanity For more details please click here or email events@house-builder.co.uk for a booking form. to top HBF Technical Conference, Birmingham Tuesday 9th November Redefining the regulatory maze. This year's HBF Technical Conference will 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. to top For other HBF events visit the website For HBM events visit to top Rosie Hinchliffe View Previous Weekly News Summary
