A weekly news summary covering all aspects of the housebuilding industry from Pierre Williams, the HBF's head of media. Available to members only.
Prescott’s “Plan for Housing Chaos” Revealed
The leaking of the government’s proposed changes to PPG3 has given HBF the opportunity to warn of the dangers of allowing local councils to dictate the “size, shape and affordability” of all new housing developments.
The plans have been widely condemned by industry, who said it would be a “licence for chaos” which would run directly against the government’s aim of increased housing provision. Persimmon CEO John White said the new rules, if introduced, would be “too prescriptive and delay the planning process”, adding that it would “create a lot of tension”. Pierre Williams for HBF said: “It would give government total control over the biggest aspect of our lives - where we live, what we live in and who our neighbours would be.” Another unnamed chief executive said it would be a “licence for chaos”. (Sunday Times, FT, Independent)
Cabe Slams Housebuilders in Design “Audit”
The Commission for Architecture and the Built Environment (Cabe) has launched a damning “audit” of English housebuilders, claiming the vast majority of developments are “mediocre”. The report said of the 100 developments it looked at, 17% were “good” or “very good”, 61% “average” and the remaining 22% “poor”. Pierre Williams for HBF dismissed the “audit”, particularly as none of the residents of the developments that were examined were asked what they thought of the homes they lived in. “What credibility can be given to a report that fails to consult the people who know most about the subject? The voices we’re most interested in are those of our customers.” (BBC R4 Today, Times, Guardian)
HBF note: It is worth observing Cabe’s press release on their audit said most homes were “mediocre”, despite their own report stating they were “average” - a deliberate spin on their own report and hardly suggestive of a lack of bias. On the back of this, a Times feature asked the residents of Chafford Hundred, an Essex development that came third to last in the “audit”, what they thought. Their reporter said: “However much the architectural connoisseurs at Cabe may long for design ‘verve’ from the volume housebuilders, the fact is that places like Chafford Hundred have put smart, efficiently-plumbed, leak-free, ‘dream homes’ within affordable reach of those who would otherwise be trapped in dismal surroundings. The housebuilders and local planners, it seems to me, are responding to real demands and real needs, while Cabe is living in a green-tinged whimsyland.”
Housebuilders Warn of Tough Conditions
George Wimpey and MJ Gleeson have warned of “challenging” market conditions - a move that has made analysts jittery. George Wimpey said: “As in previous markets with little or no price inflation, customers are taking longer over their purchase decisions and so any recovery in reservations since the summer has been limited.” Nevertheless, the company still expects to meet analysts’ expectations for pre-tax profits of £440m compared to £378m last year. This excellent forecast was not enough to calm investor fears and Dresdner Kleinwort Benson cut its rating on Wimpey from “sell” to “hold” and its shares closed down 9.75p to 378.25p. Meanwhile, Gleeson painted a gloomier picture. It reported that footfall has halved over the past three months and average selling prices fell from £195,000 last year to £186,000. Managing Director Andrew Muncey said his company was “cautious” about prospects although its pre-tax profits doubled in the year to the end of June. Stock fell 7.5p to 209p. In another rather worrying development, brokers at Numis, who have traditionally been bullish about the market, seem to have had a change of heart. The firm no longer has a single “buy” recommendation for any housebuilder it covers. A spokesman explained: “We believe that although many housebuilders and analysts expected a gradual slowdown, sales rates and house price inflation have slowed at a faster rate than most of us expected.” (FT, Independent, Mail)
Final Bid to Wreck Growth Plans
With the East of England Regional Assembly on the cusp of deciding whether to approve the building of 500,000 new homes in the region up to 2021, the anti-development lobby has made a final big push for the scheme to be rejected. A report by a consultancy employed by the assembly says the plans would have a “serious negative impact on water resources, biodiversity, tranquillity, air quality, recreational access and congestion”. This has been used by various pressure groups to push their case for rejection. They say a lack of infrastructure in the region makes the plans unsustainable. But their protests have been rejected by government. Listing a series of infrastructure projects underway, Lord Rooker said: “All this is part of the agreement for growing sustainable communities. We’re not talking about a housebuilding programme; it’s a community-building programme.” (All media).
Mixed Messages on Interest Rates
A new surge in High Street spending and a jump in oil prices has dealt a blow to hopes that interest rates have peaked. The slowdown in house prices has combined with earlier retail figures suggesting spending was moderating fast. However, these new figures are casting doubt on the slowdown. The picture is being further complicated by a deterioration in Britain’s trading position. But collectively, the data raises considerable doubt about the next move on rates, a situation confirmed by Bank of England Governor, Mervyn King, who said: “I don’t know where interest rates will go and neither does anybody else.” (Times, FT, Mail)
“1.5m Homes Needed For Immigrants”
The immigration pressure group Migrationwatch claims a third of the new homes built over the next 20 years will be needed for immigrants. The group’s chairman, Sir Andrew Green, said: “England is already the second most crowded country in Europe and since much of the development is expected to be in the south-east, it will have a major impact on congestion in the region.” The Tories were quick to pick up on this. Shadow Home Secretary David Davis said: “Uncontrolled immigration puts a burden on housing, health, schools and other public services. Labour needs to get a grip.” (Express)