Friday, 8th October 2010 Top stories this week HBF at Conservative Party Conference......read more HBF New Homes Bonus Calculator.....read more Grant Shapps outlines plans for new council housing deal.....read more CML finds FSA's responsible lending proposals could have a major impact on the mortgage market.....read more Halifax house price survey......read more NHF: Government policies killing off 1,300 planned new homes every day......read more Quick Links HBF news Government and political news Economic news Industry news Housing market news Events HBF news HBF at Conservative Party Conference John Slaughter and Tim Collins attended the Conservative Party Conference held in Birmingham earlier this week for HBF. HBF held a successful private dinner on Sunday evening in partnership with the Construction Products Association. The dinner was attended by Housing Minister Grant Shapps and John Howell MP (Parliamentary Private Secretary to the Minister for Decentralisation Greg Clark) together with a number of newly elected MPs with an interest in housing issues. The discussion focused on the new planning system, including how the New Homes Bonus would work and the role of the proposed presumption in favour of sustainable development. The MPs also discussed the ways in which they thought the industry could engage with the new system. HBF also held separate bilateral discussions with other newly elected MPs and political and housing contacts during the conference. to top HBF New Homes Bonus Calculator HBF has devised a simple New Homes Bonus Calculator to help members in their discussions with local authorities. Information on the Bonus is currently very sketchy, so our Calculator is based on a number of key assumptions. To use the Calculator, members simply scroll down the spreadsheet to the relevant local authority, type in the numbers of open-market and Affordable Housing units on their site, and the Calculator gives an estimate of what the Bonus could be worth to the local authority for the site. Please click here to download a copy of the New Homes Bonus Calculator* *Member only content, please remember to log in to view to top NE and Yorkshire MDs' meetings HBF staff discussed current political, planning and industry issues at the meetings of HBF Managing Directors in both the North East and Yorkshire this week. to top Government and political news Yvette Cooper tops Shadow Cabinet Election results The Labour Party announced the results of its Shadow Cabinet election yesterday. Both John Denham and John Healey were successful in gaining a place, along with former Housing Ministers Yvette Cooper and Caroline Flint. Yvette Cooper topped the poll of Labour MPs, gaining the role of Shadow Secretary of State for Foreign and Commonwealth Affairs and Minister for Women and Equalities with John Healey, Shadow Secretary of State for Health, coming in second place. Other notable appointments include the Rt Hon Caroline Flint MP as Shadow Secretary of State for Communities and Local Government. The full list of those elected to the Shadow Cabinet is: Douglas Alexander; Ed Balls; Hilary Benn; Andy Burnham; Liam Byrne; Yvette Cooper; Mary Creagh; John Denham; Angela Eagle; Maria Eagle; Caroline Flint; John Healey; Meg Hillier; Alan Johnson; Tessa Jowell; Sadiq Khan; Ivan Lewis; Ann McKechin; and, Jim Murphy. They join the following Labour MPs and Peers who are already members of the Shadow Cabinet: Ed Miliband MP, Leader of the Labour Party; Harriet Harman MP, Deputy Leader of the Labour Party; Rosie Winterton MP, Labour's Chief Whip; Tony Lloyd MP, Chair of the Parliamentary Labour Party; Baroness Royall, Shadow Leader of the House of Lords; and, Lord Bassam, Labour's Chief Whip in the House of Lords. Read more to top Grant Shapps outlines plans for new council housing deal Housing Minister Grant Shapps has this week committed to giving councils greater financial freedom in relation to council housing in England. Describing the current system of council house financing as "no longer fit for purpose", Mr Shapps set out plans to replace it with a new, more transparent system that devolves greater power to councils to better meet the housing needs of their local communities. This delivers a commitment in the Coalition Agreement. Under the current system, councils are required to pay council house rents and the majority of receipts from any sales of land or homes to Whitehall, who then decide how best to redistribute it back to councils. But under the proposed new rules, rather than the current Housing Revenue Account subsidy system councils would instead keep all the rents and sales receipts they collect. In return for this greater freedom, some councils would take on additional housing debt - but no council will take on a level of debt that is not sustainable for the long term. Details of the new system will be announced as part of the Spending Review on 20th October and will be introduced as part of the Localism Bill being introduced this autumn. Housing Minister Grant Shapps said: "For far too long councils have been left hamstrung in their efforts to meet the housing needs of their residents by a council house finance system that is outdated and no longer fit for purpose. The Housing Revenue Account subsidy is in urgent need of reform. "That's why I can confirm that we intend to scrap the current system, and instead replace it with something more transparent that will serve the needs of local communities without interference from Whitehall. "Subject to the Comprehensive Spending Review we will offer councils the opportunity to keep the rents they collect and the receipts from any house or land sales. This is a key step to transfer powers to councils and communities, so they are free to improve their local services in a way that best meets the needs of local people." Read more to top Economic news CML finds FSA's responsible lending proposals could have a major impact on the mortgage market The Council of Mortgage Lenders published an article and analysis earlier this week looking at the potential effect of the Financial Services Authority's proposals on responsible lending set out in its Mortgage Market Review Consultation Paper. The findings of this analysis were extensively covered by the national press on Tuesday. The headline findings were that: The total impact of the FSA's proposals would have been that 51% of borrowers who took out mortgages between the second quarter of 2005 and the first quarter of 2009 would not have been granted the mortgage they obtained if the proposed requirements had been in place. Two thirds of first-time buyer mortgages would have been caught by the proposals over the same period. The CML has called for an informed discussion to ensure the balance between consumer protection and the availability of mortgages is struck at the right level in finalising future FSA regulations. Read more to top CML urges government not to cut ISMI further With a 40% cut in the rate at which borrowers receive income support to cover their mortgage payments coming into effect, the CML has urged the government to resist making further cuts to this benefit in its forthcoming comprehensive spending review and, in particular, to maintain the 13-week qualifying period for payments. The CML accepts there is a case for reducing the rate from 6.08% to 3.63%, as the government has already done. However, the decision means that fewer borrowers will receive payments covering their mortgage interest in full, and all households receiving the benefit will come under greater financial pressure. The CML has nonetheless re-assured borrowers that lenders will continue treat them sympathetically if they experience payment problems. Any borrower anticipating payment difficulty - either as a result of the benefit change or for any other reason – is urged to contact their lender as soon as possible. Commenting on the reduction in the rate at which ISMI is paid from 6.08% to the Bank of England's average mortgage rate (3.63%), CML Director General Michael Coogan said: "A combination of low interest rates and the concerted efforts of borrowers, lenders and the government have brought about a reduction in arrears and possessions, despite the economic slowdown. Paying benefit at a lower rate will put extra pressure on household finances, and any borrower anticipating payment problems should talk as soon as possible to their lender, who will treat them sympathetically and try to work out a solution with them. "Lender forbearance has played a crucial role in keeping arrears and possessions in check, and this is reinforced by the certainty for lenders and borrowers of benefit payments, albeit at a reduced rate, within 13 weeks. But any move to lengthen the qualifying period - and in particular to return to a 39-week waiting time - will seriously undermine the efforts of lenders and borrowers to work together to try to ensure that going into arrears does not result in the home being repossessed. Continuing government support, including the funding of debt advice, is vital in helping keep people in their homes." Read more to top Bank of England maintains Bank Rate at 0.5% and the size of the Asset Purchase Programme at £200bn The Bank of England's Monetary Policy Committee voted this week 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 of the meeting will be published at 9.30am on Wednesday 20th October. Read more to top CPA: Outlines how CSR can stimulate economic growth The Construction Products Association has written to the Chancellor ahead of the Comprehensive Spending Review (CSR), urging him to focus future investment on those areas most likely to stimulate economic growth. Michael Ankers, Chief Executive of the Construction Products Association said: "We strongly support the need to address the country's huge budget deficit. However, spending cuts and tax rises alone will not secure the long-term sustainable economic growth which must be the government's ultimate goal. We accept that reductions in capital spending have to play their part in helping to reduce the deficit, but we believe that the proposed cuts in capital spending whilst current spending continues to grow, are not consistent with the government's stated aim of ensuring public spending is focused on where it will do most to stimulate a private sector led economic recovery." In its letter the Association argues that public sector net investment should not fall below 2.25% of GDP, the level below which the quality of the country's built assets will start to deteriorate. Within this the Association says that investment should be focused on: Transport Infrastructure, improvements to which will help improve business competitiveness and encourage increased investment in the UK; Education facilities, to ensure we have the skilled labour force to help lead us out of recession; Housing, to facilitate greater labour mobility, and to help deliver the government's carbon reduction commitments The Association also emphasises the importance of the government setting the right framework to encourage private sector investment particularly to help meet the country's energy needs. Read more to top CPA: Construction product sales rise, but uncertainty lies ahead Compared with last year, sales of construction products continued to rise during the third quarter of 2010 according to the latest Construction Activity Barometer from Ernst and Young and the Construction Products Association. However, although the indicator has fallen marginally from the previous quarter, a reading of 74 still suggests a healthy increase compared with last year. In the Barometer a figure of 50 represents no change in sales compared to a year earlier with below 50 represents a fall in sales. The buoyancy of the past six months is relative to the depressed state of the industry during 2009 when private sector demand contracted at an unprecedented rate. But CPA says the current cautious optimism is unsustainable in the longer term. Commenting on the results, Noble Francis, Economics Director for the Construction Products Association said: "Sales of both heavy side products, typically used in the early stages of the construction process, and light side products, such as paints, heating and lighting products, were strong relative to 2009 Q3. From a level of 66 in 2010 Q2, the light side sales index climbed to 73, its highest level in three years and 54% of light side respondents reported that sales volumes were higher than in the same quarter 12 months ago. The heavy side sales index stood at 79 for the second consecutive quarter and a significant 71% of respondents reported that their sales rose. "Expectations about the future, however, were more subdued, particularly on the heavy side. From a peak of 81 in 2010 Q2, the expected heavy side sales index fell to 50, suggesting that sales volumes are anticipated to plateau in Q4. Light side respondents, however, continue to be optimistic about their sales over the short term and the light side expected sales index stood at 63, its highest level since the first quarter of 2008, for the second consecutive month." Read more to top Industry news Homes and Communities Agency: appoints interim Chief Executive Pat Ritchie, who is currently the HCA's Director for the north east, has been appointed as the interim chief executive of the HCA and will take up her new role on 1st November. A permanent replacement will be appointed next year. The current chief executive, Sir Bob Kerslake, is leaving to become permanent secretary at the Communities and Local Government department. Ms Ritchie said: "The job ahead will be extremely challenging as we reshape the HCA to support the government's commitment to localism and drive out the best possible value for public money. The HCA has an important long term role and a strong offer to make to local authorities to help deliver their ambitions. "Through our successful delivery we have demonstrated a culture of adaptability and a capacity for change, and as we approach the outcome of the spending review this characteristic will be key in effectively shaping our future." Robert Napier, Chairman of the HCA, said: "I and the HCA board are delighted that Pat Ritchie will be our new chief executive. She has a strong track record of achievement, both in the north east and in leading change at a national level, as well as the respect of staff and the sector as a whole." Read more to top RTPI: What's important is that planning is properly resourced Responding to the Rt. Hon. Eric Pickles MP's suggestion, given in his keynote speech this week to Conservative Party Conference, that councils can save money by merging their planning departments, the Royal Town Planning Institute (RTPI) has stressed the importance of providing the resources needed to allow planners to rise to the challenges of localism. The Secretary of State referred to planning twice in his speech, firstly to question the need for councils to have separate planning departments and secondly to indicate that councils will have a stronger say on planning. James Butler, Communications Manager at the RTPI, said: "We welcome the Secretary of State's commitment to local councils having a stronger say in planning – planning is a frontline service, one which when properly resourced enables communities to make informed decisions about the future of their areas. We recognise that councils are looking to make savings. Local authorities may choose to structure their planning departments differently but what is critical is the retention of the capacity and skills of professional planners who have experience of working with people to help shape their communities, and providing them with the resources they need to make localism effective." Read more to top Greater flexibility for planning permissions: Guidance CLG has published an update to its guidance published on 23rd November 2009. This covers the measures brought forward to allow the extension of time limits for implementing extant planning permissions, and non-material amendments and minor material amendments to existing planning permissions. Read more to top Circular letter: The Building and Building (Approved Inspectors etc.) Regulations 2010 A circular letter has been sent to inform Building Control Bodies about the Building Regulations 2010 and the Building (Approved Inspectors etc.) Regulations 2010 which were laid in Parliament on 9th September 2010 to come into force on 1st October 2010. The new consolidated Building Regulations 2010 can be found on Legislation.gov.uk. The 2010 Regulations in both cases consolidate the Building Regulations 2000 and the Building (Approved Inspectors etc.) Regulations 2000 incorporating all of the amendments made since 2000. The previous 2000 Regulations and all amendments to them are now revoked from 1st October, i.e. they will no longer be in force. You should now refer to the 2010 Regulations and their regulation numbers in all the work that you carry out. Read more to top IET: Wind turbines and solar panels are not the best way for homes to reduce carbon emissions The incoming president of the Institution of Engineering and Technology (IET) has said that pandering to policy makers who see the future of UK energy defined by expensive "eco-bling" solutions will have disastrous effects for the government and for consumers. Dr. Nigel Burton, who formally assumed the presidency of the IET yesterday, made these comments in his inaugural speech. In his speech, Dr Nigel Burton said some technologies "are a serious misallocation of resources if the principal objective is cost-effective emissions reduction. Early enthusiasm for domestic wind turbines has waned as it has become clear that in general these have no economic value and in some cases consume more electricity than they produce." The subsidies for solar photovoltaics risk repeating the expensive mistakes made in Germany. Dr Burton argues that "Reducing carbon emissions by 80% by 2050 will require a complete redesign of UK energy production and consumption." He goes on to say that these changes will require investment of an estimated £400 billion by 2050. One of his key recommendations is to focus on the decarbonisation of electricity production. He also claims that widespread public "conversion to electronic vehicles should be given a high priority." He goes on to make the wider point that "most hopes of achieving the carbon reduction targets rest on increased electrification of the economy and decarbonisation of the power sector." Read more to top Housing market news Halifax house price index The latest house price index released from the Halifax bank reported that: Prices fell by 3.6% from August to September. Prices in the third quarter of 2010 were 0.9% lower than in the second quarter of 2010. Quarterly house price data provides a clearer indication of the overall market trends, smoothing out the volatility caused by reduced number of monthly transactions in all house prices indices' monthly figures. The underlying pace of house price growth has turned moderately negative in recent months. Prices fell by a modest 0.3% between the first and second quarters of the year. By comparison, the quarterly rate of decline was consistently in excess of -5% throughout the second half of 2008; Average house prices in September were 2.6% higher on an annual basis as measured by the average for the latest three months against the same period a year earlier. This continues the recent downward trend from a high of 6.9% in May and was below the 4.6% increase in August; A shortage of properties for sale in 2009 contributed to an imbalance between supply and demand and was a key factor driving up house prices last year. An increase in the number of properties available for sale in recent months, together with a decline in demand, has reduced the imbalance, putting some downward pressure on prices in recent months. New sales instructions with estate agents increased for the seventh successive month in August whilst demand – measured by new buyer enquiries – fell for the third month in a row, according to the latest RICS monthly survey; Typical mortgage payments for a new borrower have fallen from a peak of 48% of average disposable earnings in mid 2007 to 30% in mid 2010. This key measure of affordability is at a better level than the long-term average over the past 25 years (37%) and is an important factor supporting housing demand. Commenting, Martin Ellis, Housing Economist, said: "Looking at quarterly figures - a better measure of the underlying trend, house prices in the third quarter of 2010 were 0.9% lower than in the second quarter of 2010. This rate of decline is significantly slower than the quarterly changes of between -5% and -6% that were seen in the second half of 2008. It is therefore far too early to conclude that September's monthly 3.6% fall is the beginning of a sustained period of declining house prices." Read more to top NHF: Government policies killing off 1,300 planned new homes every day The Government's decision to abolish the former planning system, without yet putting an alternative system in place, will lead to 300,000 planned homes being ditched by local authorities across the country, according to the National Housing Federation. The NHF estimate that the equivalent of 1,300 planned homes have been scrapped every day since May. New research commissioned by the Federation, carried out by Tetlow King Planning, shows that the Government's decision to allow councils to ignore the regional targets has already resulted directly or indirectly in plans for around 160,000 homes being dropped. Tetlow King expects that figure to increase to at least 280,000-300,000 homes by this time next year. Read more to top NHF: High rural house prices would turn a real Emmerdale 'into a ghost village' The National Housing Federation has also said the British countryside has become so unaffordable – with average village house prices standing at £223,000 – that many famous fictional characters would be priced out of the places they are supposed to live in. According to the Federation almost two thirds (62%) of the main characters in ITV's Emmerdale would not be able to afford to buy in a typical Yorkshire village in real life with many of those on lower incomes being pushed into cheaper, urbanised areas. Three of the nine lead characters in the popular Doc Martin series on ITV would not be able to live in the fictional village of Portwenn. Doc Martin is filmed in the affluent Cornish village of Port Isaac where property prices start at £140,000 and go up to £2.5m. The same problem holds true for other rural dramas, with 22 of the 52 main characters in Radio 4's The Archers likely to be priced out of their home village of Ambridge given the shortage of affordable housing in the countryside. Read more to top Events Housing Market Intelligence – Last couple of days to book! 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 to top Housebuilder Awards 2010 – Huw Edwards to host. The Housebuilder Innovation awards, that takes place on October 28th, will this year be hosted by prominent national tv broadcast journalist Huw Edwards. 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 for this year's Housebuilder Awards please visit www.house-builder.co.uk/awards/ For all booking enquiries please contact the events team on 020 7960 1646 or events@house-builder.co.uk 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. 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 HBF Technical Conference, Birmingham, 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. to top Solar Power UK 2010, 18-19th October, Savoy Place, London – discount for HBF members The Solar Power Group of the Renewable Energy Association is spearheading Solar Power UK 2010, the number one solar PV event in the UK. The conference will bring together experts and business leaders in the solar industry in the UK. Attendees can hear from Ray Morgan, CEO of Woking Council on using PV to combat Fuel Poverty, Adrian Lea - Renewables Planning Officer for Cornwall Council, Nicholas Doyle from Places for People on plans to roll out PV in social housing and Ray Noble, PV specialist for the REA on new protocols for integrating PV into buildings. For Home Builders Federation members a specially negotiated 20% discount is offered for delegate bookings using the code: HBF20OFF. Please click here for more details to top For other HBF events visit the website For HBM events visit to top Rosie Hinchliffe View Previous Weekly News Summary
