HBF Weekly News Summary Friday, 3rd December 2010

Friday, 3rd December 2010

Top stories

Intention to abolish Regional Strategies temporarily declared NOT to be a material consideration in planning decisions

CALA Homes has won the first part of its second challenge to the actions of the Communities Secretary, Eric Pickles, in seeking to remove the English Regional Strategies and the housing targets that they contain.

Following the court judgment last month that declared the revocation of Regional Strategies (RS) as unlawful, Mr Pickles stated that this would “change very little” since his intention to change the legislation requiring such strategies should be treated as a material consideration when making planning decisions. CALA’s challenge to that statement, and the letter sent to all local planning authorities by the CLG Chief Planner reiterating the same position, has cleared its first hurdle with the court placing a temporary block on the Government’s intentions being considered as material in making any planning decision.

The date for the full hearing has not yet been set - but will not be before 20th December.

It is understood that CLG have challenged the temporary injunction. More details to follow on this.

The result means that the RS are the starting point for any planning decision and the Government’s intention to revoke them cannot be considered as a material consideration.

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NHMB survey: “We need more homes – but don’t build them near me"

A YouGov survey commissioned by the New Homes Marketing Board (NHMB) has revealed that more than eight in ten people (81%) believe Britain needs more housing for sale and rent, especially affordable homes for first-time buyers. But it also shows that far fewer people – just 50% – would welcome more homes of all types in their own immediate neighbourhoods.

A 2007 survey carried out for the NHMB showed a similarly high number of respondents (78%) agreeing that the availability of new homes affordable to first-time buyers was important to the well-being of their local communities. But at that time, the number of people saying they would actively support homes suitable for first-time buyers in their immediate neighbourhood was significantly higher, at 58%.

“This fall is disturbing” said New Homes Marketing Board Chairman David Pretty. “We have a situation where more people recognise that we have a chronic national housing shortage, who apparently understand what needs to be done to help solve it – but who seem increasingly against playing their own local part in accepting more housing.

“People clearly realise we have a housing problem, but as the crisis deepens, the ‘nimby’ – not-in-my-back-yard – attitude seems to be hardening. If that’s part of a new trend, it’s a very bleak finding.”

The new YouGov survey showed considerable public understanding of Britain’s housing problems. Only 20% of respondents thought the nation had enough homes to cope with its growing population, while 81% agreed that we need more homes of all types for sale and rent, especially housing that is affordable to first-time buyers.

Over two-thirds (69%) agreed that the planning system should be streamlined and speeded-up to enable more and better affordable housing to be built and, crucially, 68% said local communities should accept their share of responsibility for the provision of adequate and affordable new housing.

However, when asked if they would be prepared to accept more housing of all types in their ‘immediate neighbourhood’ only 40% said they agreed, with a further 10% saying they ‘strongly agreed.’ The other half either disagreed (39%) or didn’t know (11%).

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Government and political news

Greg Clark addresses TCPA

Minister for Decentralisation Greg Clark this week addressed the TCPA’s annual conference in London. He set out some of the next steps in Government's proposals for putting communities in control of their own destiny through the planning system; and also talked about the Localism Bill, the publication of which was expected last month, but remains imminent.

Click here to read what he said

Government launches growth review

The Chancellor of the Exchequer, George Osborne and Business Secretary, Vince Cable have announced a fundamental review of what all parts of Government are doing to create the best conditions for private sector growth.

Building on the action already taken by Government their new paper, “The path to strong, sustainable and balanced growth”, invites business to take part in this work which will challenge every Government department on the measures being taken to tackle barriers to growth.

The growth review will start with an intensive programme of work, based on the evidence provided by business, to report by Budget 2011. Departments will be required to present Action Plans to a Ministerial Ad-Hoc Group chaired by the Chancellor and Business Secretary, on what contribution they will make to:

Reform structural barriers across the whole economy in planning, competition, trade and investment, regulation, access to finance and corporate governance;

Remove barriers in sectors where there are clear opportunities for growth and where Government can make a difference – construction, retail, health and life sciences, professional and business services, manufacturing and digital and creative industries.

Given the focus on construction, HBF has already been invited to make an initial submission to this work by the Department for Business.

Chancellor of the Exchequer, George Osborne, said:

“… the growth review contributes to the Government’s drive to remove the barriers to growth and improve British competitiveness.

“We have been clear that growth will be driven by the private sector. By working closely with business and industry in this intensive programme of work, Government can make sure that Britain is open for business.”

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Grant Shapps: Waiting list figures show urgent need for housing reform

Housing Minister Grant Shapps has said the numbers of families on waiting lists are further evidence of the need for fundamental reform of the system for allocating social homes.

Mr Shapps argued that as part of reform councils must be given more flexibility to better ease the housing pressures their communities face.

A week earlier the Government published details of its radical reforms to social housing, including:

Giving social landlords the option of offering flexible tenancies - with decisions made locally;

Allowing councils to set their own rules about who qualifies to go on housing waiting lists;

Making it easier for any of the eight million social tenants in England to move when their circumstances change;

More flexibility for councils to make decisions on how best to help people at risk of homelessness at the local level; and

Allowing housing associations to offer a new affordable rent tenancy from April 2011.

Grant Shapps commented:

"Today's figures underline the clear and pressing need to change the way social housing operates in this country. It is unacceptable that five million people are left languishing on waiting lists.

"So the first thing we're going to do is build more homes using a new flexible rent approach. Next, councils and housing associations must have the flexibility they so desperately need to better tackle local housing pressures. That's why I have announced plans for the most far-reaching and radical reforms for a generation, from the option of fixed tenancies offering help for new tenants for as long as they need it, to extra help for existing tenants to move to a new social home."

Housing Stock, England - Dwelling Stock estimates, England, 2010

The latest England Dwelling Stock estimates statistics produced by the Department for Communities and Local Government were released this week and report on the dwelling stock in England as at 31st March 2010.

Key points from the latest release are:

There were an estimated 22,693,000 dwellings in England as at 31st March 2009, an increase of 0.57% on the previous year;

In 2010, the region with the largest dwelling stock was the South East, with 3,661,000 homes. This was followed by London (3,300,000) and the North West (3,103,000). The region with the smallest dwelling stock was the North East, with 1,160,000 homes.

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Local Authority housing statistics, England: 2009-10

The latest statistics provided by local authorities in England on their Housing Strategy Statistical Appendix (HSSA) and Business Plan Statistical Appendix (BPSA) for 2009/10 were released this week.

Topics in this release include: local authority housing stock; households on local authority housing waiting lists; participation of local authorities in Choice Based Letting (CBL) schemes; local authority lettings; decent homes delivery; programme of work on Housing Revenue Account (HRA) stock and local authority anti-social behaviour injunctions.

Key points from the release are:

Local authorities in England owned 1.8 million dwellings on 1st April 2010, following a general decline from 3.0 million on 1st April 2000;

There were 1.75 million households on local authority waiting lists on 1st April 2010, similar to 1.76 million on 1st April 2009. Waiting list numbers have been relatively stable for the last two years, following a general increase from 1.04 million on 1st April 2000;

80% of local authorities in England participated in Choice-Based Lettings (CBL) on 1st April 2010, an increase from 61% on 1 April 2009;

Local authority landlords in England made 155,800 lettings during 2009/10, increasing from 151,700 during 2008/09. This follows a general decline from 354,000 in 1999/00;

The number of non-decent local authority dwellings across England was 291,600 on 1st April 2010, a fall from 396,900 on 1st April 2009;

HCA: National housing statistics

The latest statistics on the supply of affordable homes delivered under the National Affordable Housing Programme, the Local Authority New Build Programme and the Kickstart Housing Delivery Programme together with all homes delivered under the Property and Regeneration Programme were released by the Homes and Communities Agency (HCA) this week.

Key points from the release are:

There were 17,519 housing starts on site and 21,093 housing completions in England in the six months to 30th September 2010 delivered under the National Affordable Housing Programme, the Kickstart Housing Delivery Programme, the Local Authority New Build Programme and the Property and Regeneration Programme;

13,402 of the housing starts on site were for affordable homes of which 9,340 were for social rent, 633 for intermediate rent and 3,429 for low cost home ownership. Over half of these starts on site (53%) were in London and the South East;

Housing completions in the six months to 30th September 2010 included 19,533 affordable homes of which 10,301 were for social rent, 1,022 for intermediate rent and 8,210 for low cost home ownership. Half of these completions were in London, the South East and the East.

CLG: New powers put Londoners in the driving seat

Londoners are set to benefit from an unprecedented devolution of power from Whitehall, Communities and Local Secretary Eric Pickles announced this week.

Radical new plans will see the Mayor of London and Borough councils and neighbourhoods handed greater decision making powers over the city's housing, regeneration, economic development, and Olympic legacy as part of the Localism Bill to be published shortly.

These reforms pave the way for further devolution down to the London Boroughs to make sure decisions reflect local priorities including more decisions on planning being put into to the hands of locally-elected London leaders.

Ministers believe that, as things stand, too many major planning applications are decided by the Mayor and there are various unelected bodies taking decisions over London leading to confusion and duplication between City Hall, Government Office for London, the Homes and Communities Agency, London Development Agency and the Olympic Park Legacy Company.

Eric Pickles said:

"London is a global powerhouse, with global reach - and yet it can't make local decisions on local issues.

"Today I'm announcing that we will streamline the way London is run so Londoners a stronger voice with decisions taken by Mayor, Borough leaders and neighbourhoods based on local priorities in the capital.

"London is a democracy not a quangocracy and the Mayor has a clear electoral mandate from London voters so he should be at the head of the table.

"Instead of quango-itis stifling the pace of London's progress its elected leaders will decide what housing and regeneration investment to make or what London's Olympic legacy should be, all in a more open and transparent way than ever before."

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Housing market news

Nationwide: House prices edge down further in November

The latest house price index produced by Nationwide reported that:

House prices fell by 0.3% in November, from £164,381 in October to £163,398;

However, the year-on-year price is nearly unchanged.

Commenting on the figures Martin Gahbauer, Nationwide's Chief Economist, said:

“The recent trend of modestly falling house prices continued during November, with the price of a typical UK property declining by 0.3% on a seasonally adjusted basis between October and November. The three month on three month rate of change – a smoother measure of the recent price trend – rose from -1.5% to -1.3%. This remains well above the deeply negative rates of -5% to -6% that prevailed during the most severe phase of the downturn in 2008. The annual rate of change – which compares house prices to their level 12 months ago – fell from 1.4% to 0.4% and suggests that house prices are essentially unchanged from a year earlier.

“There is little evidence to suggest that house price declines are likely to accelerate in the months ahead. Much of the weakness in property values since the Spring has been driven by a return of sellers to the market, following unusually low levels of property for sale in 2009 and early 2010. However, there is little to indicate that these sellers need to achieve a sale urgently for financial or economic reasons, which means that the downward pressure on house prices is only modest. In addition, there are early signs that the flow of new property onto the market may be slowing down again as potential sellers observe the recent weakness in prices and decide against marketing their properties at the current juncture. Similar seller behaviour was observed in late 2008 and early 2009, eventually leading to a decline in the amount of property on the market.”

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Industry news

HCA publishes Kickstart BfL scores

The HCA this week published the Building for Life scores from Kickstart funded projects. Publication followed a Freedom of Information request by architectural trade publication Building Design magazine. HBF released a statement to the trade media in response to the articles that resulted to rebut criticism from the architectural fraternity of Kickstart.

Speaking today, Stewart Baseley, Executive Chairman of HBF said;

“Kickstart must be judged an enormous success. It created or supported 15,000 new jobs in home building and will eventually provide some 20,000 new homes. Criticising the process detracts from the success of a programme that delivered thousands of desperately needed homes that otherwise would not have been built.

“Credit should be given to the HCA for securing public money for Kickstart at a time of economic turmoil when all sectors of the economy were clamouring for assistance- and using it so effectively to deliver homes. During an acute housing crisis the agency helped maintained supply, so protecting jobs and attracting investment to support the struggling economy

“BfL was just one of many criteria used to assess Kickstart sites. It was a desktop exercise, without the site visits often undertaken as part of a BfL assessment. In Kickstart 1, because the information required by assessors was not requested in the appropriate form, assessors simply gave a zero score for many categories, which clearly skewed the results. Kickstart 1 scores were lower than those for Kickstart 2 largely because of lack of information, not because the schemes were poorly designed.

“The most recent Customer Satisfaction Surveys, including the HBF’s, show extremely high levels of satisfaction among new home buyers, demonstrating the industry’s commitment to quality.

Read more (you will have to register, but it is free)

Please click here to view the Kickstart Round 2 data

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David Bryant takes chair of NHMB as David Pretty retires

David Bryant will replace David Pretty as Chairman of the New Homes Marketing Board at the end of the year.

David Pretty – one of house building’s best-known figures - is retiring after four years at the helm of the NHMB. His time in charge coincided with a particularly difficult time for the industry but it never dampened his enthusiasm to campaign tirelessly on behalf of homebuilders and buyers. In particular, he worked ceaselessly to highlight the difficulties faced by a ‘lost generation’ of first time buyers.

David Bryant, retired from Persimmon last year after 25 years, over 18 of which were spent as a main board director. He has been on the NHMB board for four years and is involved with a number of other building related companies.

Stewart Baseley, Executive Chairman of HBF said:

“On behalf of the entire industry I would like to thank David Pretty for all his hard work during what has been a really tough time for the housing sector. His leadership, charisma and hard work have helped significantly to promote the new homes industry and in particular highlight the plight of first time buyers. I would like to welcome David Bryant to the role. He has a great understanding of the industry and also of what benefit the NHMB can bring. He will make a real difference and continue the great work of his predecessor.”

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New report: Housing shortages; what councils can do

A new report from the CLG/LGA Housing Commission was released this week. It highlighted the key role of councils in meeting the housing supply challenges in their areas and noted the ‘entrepreneurial and innovative approach being taken by councils in bringing together partners, working with the community to secure support for much needed development and providing expertise and resources to support the successful completion of schemes’.

New orders in the construction industry 3rd quarter 2010

The latest statistics from the Office for National Statistics reported this week that the volume of private housing orders in the third quarter of 2010 rose by 49% compared with the previous quarter and rose by 86% compared with the same period a year earlier. These are based on constant price seasonally adjusted estimates. The equivalent non-seasonally adjusted growths were 31% and 94%. The volume of housing new orders is back to the levels last seen in the first quarter of 2008.

Public housing orders in the third quarter of 2010 fell by 22% compared with the previous quarter and also fell by 42% compared with the same period a year earlier.

Other headline figures include:

The total volume (in £m) of all new construction orders in the third quarter of 2010 fell by 4% compared with the second quarter of 2010;

The total volume of new construction orders fell by 14% compared with the same period in 2009;

Only the private housing and private commercial sectors showed a growth in new orders in the third quarter compared with the second quarter.

All new orders figures quoted are seasonally adjusted and in constant (2005) prices.

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Innovation and Growth Team report - construction industry must undergo huge change to meet the low carbon challenge

The construction industry faces the largest change management programme since Victorian times if it is to meet the low carbon agenda, according to an industry report published this week.

The Innovation and Growth Team (IGT), which is drawn from the construction industry, was tasked by the Government with considering how the construction sector could meet the low carbon agenda. The IGT published its report this week.

The report said the construction industry had engaged positively with the sustainability issue with many examples of cutting-edge practice.

But the Climate Change Act calls for the net UK carbon account in 2050 to be at least 80% lower than the 1990 baseline, which the IGT says will require a ‘quantum change’ in the industry’s response to this challenge.

The report highlights four themes that government and industry need to engage on to rise to the carbon challenge:

The potential size of the market – meeting the UK’s commitment to reducing carbon and other greenhouse gas emissions will affect every aspect of the built environment. The scale of the necessary change is considerable but there is much that could be done now, particularly with the existing building stock;

Opportunities for SMEs – transforming the built environment to low carbon could provide the industry with a 40 year programme of work and act as a springboard to growth for more than 200,000 small businesses in the sector;

The wider green economy benefits – the green economy represents an area of substantial potential growth for the UK. Creating a low carbon construction industry would develop skills and expertise that would be of great value to other sectors;

Stimulating demand – there would be little point in developing the necessary capacity and skills if the demand for low carbon was not there. Government and industry need to work closely together to identify the best ways to stimulate the market for low carbon and energy efficiency measures.

UK construction PMI fails to retain sustainable growth

Disappointing results from the construction Markit/CIPS Purchasing Managers’ Index® (PMI®) for October shows the sector was unable to sustain its recent growth activity.

The composite figure of 51.6, was down from September's 53.8. Employment levels continued to fall as the Government's spending cuts hit confidence in the sector.

David Noble, CEO of The Chartered Institute of Purchasing & Supply commenting on the report said:

“The recent growth in the construction sector seems to be petering out. Further declines look inevitable as nervy customers and a spendthrift public sector put firms in a precarious position. Construction will have to look much harder for new contracts going forward, so it’s no surprise that many are cutting jobs and reducing purchasing activity to provide a safety net against further falls.

“This data is particularly nerve-racking given the boost the construction sector gave to the overall GDP growth last quarter. Commercial activity may have fared less badly than in the underperforming housing market, but overall expectations of future business remain historically low. The high hopes of earlier in the year seem to have given way to dire predictions on what the future may hold.”

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Housing and Planning Statistics 2010

The latest annual volume of Housing and Planning Statistics for 2010 was released this week under arrangements in line with the code of practice for official statistics.

Key figures from the report show:

There were 21.5 million households in England in 2008-09: 14.6 million owner-occupiers; 3.8 million social renters; and 3.1 million private renters;

Net additions to the stock (new build plus conversions and change of use, less demolitions) rose from 132,000 net additions per annum in 2000-01, to a peak of 207,370 in 2007-08 before falling to 128,680 in 2009-10;

Between 2008 and 2009, new build completions decreased by 17%, from 143,000 to 118,000;

In England during 2009 the lower quartile house price was 6.28 times the lower quartile full-time individual earnings;

The number of households in England is projected to rise by 5.8 million from 2008 to 2033, an increase of 232,000 per year on average reaching 27.5 million in 2033;

During 2009-10, local authorities made 89,120 decisions on eligible applications for housing assistance under homelessness legislation. Nearly half of these - 40,020 - were accepted as owed a main homelessness duty, 70% lower than the peak in 2003-04;

The overall rate of overcrowding in England in 2008-09 was 3.0%, with an estimated 656,000 households living in overcrowded conditions;

There were an estimated 8,510 total social housing sales to sitting tenants in England in 2009-10, an increase of 16% on 2008-09. However there was a 20% decrease in Right to Buy sales from 2008-09;

A total of 57,730 gross additional affordable homes were supplied in England in 2009-10. This is an increase of 4% on 2008-09;

In 2009, on a provisional estimate, 80% of dwellings (including conversions) were built on previously-developed land, unchanged from 2008.

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RICS: Rents rise as demand outstrips supply

Falling supply of new property to the rental market coupled with increased demand led to a rise in rents in the three months to the end of October, says the latest RICS Residential Lettings Survey.

39% more surveyors reported seeing an increase in rents over the three month period, than a fall (up from 27%). The net balance reading is now at its highest level since Q2 2007 as increasing numbers turn to the rented sector. Many are seeking to rent rather than buy due to difficulty in securing mortgage finance and the high deposits required by lenders.

As a result, surveyors report the rental market remains buoyant, with properties being let very quickly and landlords experiencing very few voids. Demand for rented property continues to be very strong, with houses being slightly more popular than flats. 33% more surveyors reported a rise in demand than a fall, the fastest increase in demand since 2008.

New landlord instructions - a good indication of supply to the market -slipped further, marking five consecutive quarters of falling instructions. Respondents report that difficulty in securing buy-to-let mortgages is holding back many would-be landlords, and a fresh supply of property entering the market.

Meanwhile, renewed falls in the sales market saw fewer existing landlords choosing to sell their property at the end of a tenancy agreement. The proportion intending to do so declined from 4.1% in the three months to July to 2.5% - well below the survey average of 4.4%. Jeremy Leaf, RICS Spokesperson, commented:

“The lettings sector has become increasingly strong over the past nine months, in contrast to the housing market which continues to slow. Many have turned to the rental market because they fear further price reductions in the housing market, or because they cannot obtain the necessary finance to buy.

“As a result, rents continue to rise with supply failing to keep up with demand. However, there are increasing indications that more landlords are recognising these benefits and looking to add to their portfolios – especially as there has been a rise in the number of providers willing to offer investment mortgages in recent months.”

Council Housing: A real future - Summary of responses to the consultation

On 25th March 2010 the Department for Communities and Local Government published a consultation document titled Council Housing: A real future (Prospectus). This set out detailed proposals for reforming council housing finance and sought the views of councils and others on implementing this new system.

A summary of the responses to these proposals has now been published.

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Economic news

Bank of England: Lending to individuals October 2010

According to the latest statistical release from the Bank of England, total lending to individuals increased by £1.3bn (0.1%) in October. The twelve-month growth rate rose 0.1 percentage points to 0.8% and the three month annualised growth rate rose 0.4 percentage points to 0.8%.

Within the total, lending secured on dwellings rose £1.0bn in October, compared to a £0.2bn increase in September, above the previous six-month average of £0.6bn. The twelve-month growth rate remained at 0.8% and the three-month annualised growth rate increased 0.5 percentage points to 0.9%. The number of loan approvals for house purchase (47,185), was broadly similar to the September figure (47,369) and lower than the previous six-month average (48,503). Approvals for remortgaging (29,275) were also little changed on September (29,019) but higher than the previous six-month average (27,248), while approvals for other purposes (23,469) were similar to September (23,409) and lower than the previous six-month average of 24,433.

Consumer credit rose £0.3bn in October, after a £0.1bn increase in September. The twelve-month growth rate of consumer credit increased 0.4 percentage points to 0.6%, the highest since September 2009. Within consumer credit, credit card lending rose £0.3bn and other loans and advances were flat.

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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.

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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 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.

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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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