A weekly news summary by Pierre Williams, the HBF's head of media, covering all aspects of the housebuilding industry. Available to members only.
Prices slide 2.7 percent in final quarter
House prices in England and Wales fell by 2.7 percent in the last quarter of 2004 according to the Land Registry. But the overall figure masks huge variations, with some areas still rising whilst the worst affected have lost more than 10 percent. The Registry figures, which are seen as the most reliable of all indices, suggest the downturn was more serious than previously thought. Seven out of 10 regions saw prices fall with London and the South East experiencing the biggest overall falls of 3.7 percent and 2.6 percent respectively. But counties and districts across the country saw big variations in their fortunes.
The worst performers were Hartlepool (down 9.5 percent), Herefordshire (down 8.1 percent), Bracknell Forest (down 6.7 percent), Bucks (down 5.6 percent), Surrey (down 4.5 percent) and Bath and North East Somerset (down 4.4 percent). By contrast, the best performers were Blaenau Gwent, where prices rocketed 23.8 percent, Merthyr Tydfil (up 15 percent), Pembrokeshire (up 6.3 percent), and London’s Camden and Islington, up 5.3 percent and 5.1 percent respectively. (Times, Guardian)
Sales slump by a quarter
House sales are down by almost a quarter over the past 12 months. Land Registry figures reveal just under 230,000 houses were sold in England and Wales in the final quarter of 2004 compared to more than 301,000 in the same period of 2003 – a 24 percent fall. Sales are now broadly level with a decade ago after the crash of the early 1990s. And with the latest figures largely compiled from data collected before the downturn, the first quarter of this year is expected to be gloomier still. The fall in sales volumes is causing greater concern than the more moderate fall in prices. One commentator said: “The fall in prices is one thing. But the decline in volumes tells a bigger story.” (All media)
HBF note: This makes the New Year rebound even more comforting.
Britain’s housing stock valued at £3.3 trillion
The value of Britain’s housing stock reached £3.3 trillion last year following an average 50 percent jump in average prices over the previous three years. The Halifax figures show that over the past decade, Northern Ireland was the biggest winner with a 262 percent increase, followed by London on 246 percent. The smallest increases over the past 10 years are Scotland on 112 percent and the North West on 161 percent. (Mail, Times)
Bank pegs rates at 4.75 percent
The Bank of England’s Monetary Policy Committee has held interest rates at 4.75 percent for the sixth successive month. This widely expected ‘do nothing’ approach follows mixed signals from the economy. Bank Governor Mervyn King is waiting for a clearer picture to emerge before taking any action. Slower consumer spending and moderating house prices over recent months have convinced the MPC to peg rates. But inflation has been edging upwards faster than expected and manufacturing output and economic growth is also stronger than expected. Next week’s inflation report from the MPC is likely to provide a strong clue as to whether more rate rises are on the cards. (All media)
EP sells prime site for £18m less than it paid
English Partnerships has agreed to sell a prime 44-hectare site in Bracknell to George Wimpey for £16 million less than it paid for it a year ago. The agency refused to admit to having paid an estimated £96 million for the former RAF staff college but admitted it has sold it on at a lower price, insisting that this was essential to enable Wimpey to deliver an estimated 730 homes of the highest quality design and environmental standards.
The price also reflects EP’s acceptance that planning obligations will require Wimpey to provide more affordable and key worker housing. It is also thought EP’s sale price may be topped up with a profit share if the scheme proves more profitable than expected. Construction is expected to start later this year. (Times)
Prescott’s northern demolition comes under attack
The programme of housing demolition in areas of the North identified with market failure has come under sustained opposition in the Telegraph. Prescott’s “Northern Way”, which could see the demolition of up to 400,000 mainly Victorian terraced houses, has been attacked as environmentally damaging. The Empty Homes Agency claims developers can and increasingly are, turning them back into high-quality homes, while English Heritage estimates each house represents the equivalent of 15,000 litres of petrol in embodied energy. In addition, they both say demand is returning to these areas as soaring prices seek people to look and improve run down areas. (Telegraph)
Happiness is a bungalow
Bungalows are Britain’s happiest homes. A new survey commissioned by the Halifax, confirms what was already known – that a modest three-bedroom bungalow, with two bathrooms and a modest garden, produces domestic contentment. They offer the sense of space people want and are easy to maintain. Other essential requirements for the happy home are that they should be safe, secure, spacious, light, located in an area with a low crime rate and have good neighbours. (Telegraph, Times, Mail, Express)
HBF note: And with planning policy declaring war on the bungalow (which, in any event constitute just two percent of the housing stock), presumably that makes us an unhappy lot.
Fears remain for improved PPG3
The government’s revised PPG3, now out to consultation, is a big improvement on its original, but could still present dangers. Whilst the original proposals to allow councils to dictate the size, type and tenure mix of all new developments has been dropped, the new proposals requiring applicants to “demonstrate and justify” their housing mix could still allow councils to reject perfectly sound development. Views are mixed.
One unnamed source told Building magazine the new wording was similar to allowing “the condemned man being consulted on the best rope with which to hang himself”. Pierre Williams for the HBF said the new wording was less onerous but still offered unreasonable councils the chance to reject applications on spurious grounds, and urged industry to keep a close watch on the issue. (Building)
Couples priced out of starting a family
Three million people are delaying having children because they cannot afford to buy a home. Would be buyers are also working harder and longer to get a foot on the housing ladder, whilst 10 percent say they stay in jobs they hate just so they can afford their homes. According to the YouGov poll commissioned by a mortgage firm, 1.5 million women are ignoring their biological clock, insisting they put off children until they buy they home they want. (Telegraph, Express)
White flight continues apace
White and ethnic minorities are becoming increasingly separated as the number of white families leaving London – and to a lesser extent other major cities - continues rapidly. That’s the claim made by the campaign group Migrationwatch, which says over the past decade 606,000 more Londoners moved out of the capital than arrived from other parts of the country, while a net 726,000 immigrants arrived in the capital.
The result is a greater separation of races and increasing strain housing and infrastructure throughout the South to cater for the “white flight” from London. Migrationwatch, whose report findings have been echoed by the London School of Economics, said the trend has serious implications for social cohesion. (Telegraph)
Blair bangs housing drum
The Prime Minister has repeated his promise to “help people get their feet on the first rungs of the housing ladder,” as part of the first of six key “poll pledges” for the forthcoming General Election. He highlighted the need for more affordable housing for key workers and first time buyers. Liam Fox for the Conservatives, said: “Rather than making promises based on nothing, they must defend what they have done in the past eight years. Whatever Tony Blair says, why should anyone believe a single word he says.”
HBF note: Re-affirming action on housing is welcome, but Blair’s focus on affordable housing doesn’t fit well with his call just a fortnight ago to expand property ownership.
Prescott’s plans are Bokloks
Ikea’s flat pack homes are “Bokloks”. And so too are John Prescott’s housing plans, say the Tories. During questions to the Deputy Prime Minister’s Department this week, shadow local government secretary Caroline Spelman, said: “At the heart of the Government’s plans to solve the housing crisis is the provision of cut-price houses for £60,000 each. Ikea has a name for its self-assembly houses – Bokloks – and the English phrase that springs to mind for Mr Prescott’s entire housing policy is pretty similar.
Mr Prescott’s plans to build over the countryside are unworkable. He intends to build his houses of public sector land. The Chancellor has already included the profit from the sale of this land in his calculations – the red book shows revenue of £30 billion over five years. If the Chancellor has sold it, how is Mr Prescott going to build on it?” (Conservative Party press release, sadly – but perhaps not surprisingly – comprehensively ignored).