A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
HBF News and Activity
Miliband to speak at major HBF Conference
HBF is holding a major Barker Conference in London on 23rd February (9.30-4.00), with the keynote speech to be given by the Rt Hon David Miliband MP, Minister for Communities and Local Government. Kate Barker, Professor Sir Peter Hall and James Paton, HM Treasury, will also be guest speakers.
In considering the response to Barker, the morning session will focus especially on the draft PPS3 and proposed Planning-gain Supplement. HBF will be launching the results of its first Customer Satisfaction Survey, its Skills Strategy and an MMC report, all in response to Barker recommendations.
If you would like to book a place at the conference please click on the following link: www.house-builder.co.uk or contact the Events team on 020 7960 1646 or email: events@hbmedia.co.uk.
Planning Gain Supplement and PPS3 – National Planning Committee meets ODPM
At a specially convened meeting of the HBF’s National Planning Committee on 12 January, members had a direct opportunity to discuss the Government’s recent proposals on PPS3 and the proposed Planning-gain Supplement with ODPM officials. The meeting forms part of HBF’s plans to consult members widely on these important issues before formulating responses to Government. Discussions will also be held with the Treasury on the Planning-gain Supplement proposals and ODPM have said they will hold regional consultations that would be open to members.
(www.hbf.co.uk)
Economic News
Interest rates left unchanged
As had been widely anticipated, the Bank of England’s Monetary Policy Committee left the repo rate unchanged. The financial markets are pricing in no change in rates for the immediate future.
(www.bankofengland.co.uk, Financial Times)
Signs of an improvement on the high street
High street sales performed considerably better than had been feared, according to the British Retail Consortium (BRC). The BRC reported that like-for-like sales in December 2005 were 2.6% higher than in December 2004, the best monthly performance since May 2004 and the best December since 2001. Total sales were up 6.2%.
Kevin Hawkins, Director General of BRC commented: “These are significantly better results than most forecasters were expecting, although the BRC sales figures for October and November indicated a slight improvement in consumer spending. Underlying conditions, however, are still very tough and the first quarter of 2006 looks challenging, despite being up against weak comparatives in 2005.”
(www.brc.org.uk)
Company News
Taylor Woodrow gives a trading update…
In a trading update, ahead of the announcement of preliminary results for the twelve months to 31 December on 28 February, Taylor Woodrow reported that they made 8,178 UK housing completions in 2005, 9.7% fewer than 2004. This “reflected more challenging market conditions and the allocation of capital into North America”. The North American division reported an 8.2% rise in the number of completions to 3,932. UK operating margins are in line with expectations.
The statement commented: “The UK housing market remains competitive and whilst we have seen some encouraging signs on customer demand in the last quarter, it remains too early to forecast 2006. There is continuing undersupply of housing and we are well placed to benefit from any continued improvement in customer confidence.”
(www.taylorwoodrow.com)
… as do Bovis
In a trading update, Bovis Homes reported that it expects to announce that profits will fall “marginally below the average of brokers’ current forecasts” when it releases preliminary results for the year ended 31 December 2005, on 13 March. Bovis also reported that the share of their business accounted for by social and partnership housing was 22%, almost double that in the previous year.
On the outlook, the statement commented: “Whilst it is early for housing market conditions in 2006 to be predicted, based upon the last quarter of 2005 there are encouraging signs of improving consumer confidence.”
(www.bovishomesgroup.plc.uk)
…and Miller
The UK’s largest privately owned house builder, the Miller Group, reported that it anticipates to have sold around 2,800 units in 2005, including 400 from the recently acquired Fairclough, in a trading update ahead of the publication of full year results for 2005 in March. The group expects to see output increase to 4,000 units per year in future.
Group Chief Executive Keith Miller commented: “The housing market stabilised in the second half of 2005 with a return to normal visitor and reservation levels. The fundamentals remain strong with both low unemployment and interest rates and a shortage of housing supply. With more than 25% of this year’s sales already secured and the enlarged Homes business operating from more than 140 sites on average throughout 2006, we remain positive on the outlook for housing, and are confident of growing the business.”
(www.miller.co.uk)
Housing Market
Halifax report that house prices continue to edge higher…
House prices rose by a seasonally adjusted 1.0% in December, to stand 5.1% higher than a year ago, according to Halifax. Regional figures showed that London saw the highest rate of price growth of any region over the fourth quarter at 3.6%, while the northern regions saw the fastest rate of price growth over the last year. Prices were up 14.8% in Scotland, 14.1% in Northern Ireland, 9.1% in the North and 8.4% in Yorkshire and Humber over 2005.
Chief Economist Martin Ellis commented: “This pick-up in prices is entirely consistent with the improvement noted by all the main indicators of housing market activity over recent months… Another year of below trend economic growth and the continuing high level of house prices in relation to earnings, however, should curb housing demand and prevent a renewed bout of high house price increases in 2006."
(www.hbosplc.com)
… while Nationwide report falling prices in the North
House prices grew fastest in Northern Ireland (13.2%) and Scotland (9.3%) during 2005 according to Nationwide, but were reported to have fallen by 2.1% in the Northern region, somewhat at odds with the Halifax data. The Nationwide quarterly regional breakdown also showed that prices have rose by 2.4% in London over the year, faster than in the surrounding areas.
(www.nationwide.co.uk)
Other News
David Wilson to develop range of affordable homes
David Wilson Homes (DWH) will unveil a range of affordable homes this spring, according to chief executive Ian Robertson. Speaking at the launch of the Project:LIFE research findings Mr Robertson said: “Affordable homes, to be unveiled in spring, will take the ideas of light and space from the Project:LIFE house.” It is not yet certain how much the one and two bedroom homes will cost.
Laurence Llewelyn-Bowen, television celebrity and DWH’s design consultant, said at the same event: “There are so many lessons we have learnt from this that are going into the affordable end of the market.” Mr Llewelyn-Bowen added that PPG3 had made the three-story town house fashionable once again and today’s housebuilders should look to their Georgian forebears, who used central shafts of natural light to brighten homes, for inspiration.
(www.dwh.co.uk)
City centres are for the young
Today’s city centre residents are mainly young, single and only live in the city for a relatively short time, according to research by the Institute for Public Policy Research (IPPR). The research revealed that city centre living is a “conveyor belt” phenomenon, i.e. young people (young workers and students) tend to live in the cities until they start a family, when they move to the suburbs. The report also highlighted what it termed “donuts of deprivation”, which lie in between the rejuvenated city centres and more affluent suburban areas, and recommends that this is where policy should focus over the next decade.
Max Nathan, Centre for Cities Senior Researcher and report author, said: “Young, single people have led the return to the city. Britain’s distinctive, young-adult driven model of city centre living has enduring appeal – for the time being. But families and older people prefer neighbourhoods with houses, parks, schools and healthcare. This is a great opportunity for planners and developers to improve deprived areas near the centre, rather than passing on the cost of family infrastructure in city cores.”
(www.ippr.org.uk)
Paul Samter
Senior Analyst - Economic and Policy Affairs
Home Builders Federation
For daily news updates for the housebuilding industry from Housebuilder magazine go to www.house-builder.co.uk