A weekly news summary covering all aspects of the housebuilding industry from Pierre Williams, the HBF's head of media. Available to members only.
HBF: housing shortage could worsen
The HBF has warned government “not to take its eye off the ball” in tackling the long-term problem of housing undersupply. Echoing comments made by George Wimpey CEO Peter Johnson, Pierre Williams for the HBF, said: “This imbalance is making house prices rise at an unsustainable rate but government needs to understand that our industry responds to short-term cyclical changes to the market.” Adding that ministerial hopes for a speedier planning system were being thwarted at local authority level, the HBF added: “This crisis has taken years to develop and there’s no point in trying to go for a quick fix solution. What we need is long-term investment.” (FT, Sunday Times)
The HBF attacks waste management directive
The HBF has renewed its attack on the EU landfill directive that, it says, could seriously affect the viability of much brownfield land and consequently, the effectiveness of the sustainable communities plan. The directive will increase the costs of disposing of hazardous waste and seriously affect site values by classifying them as landfill sites. Miller Homes technical director, Steve Wielebski, said: “We estimate it will mean a doubling or trebling of disposal costs which could add £3,000 to the cost of a new home. There is also a real stigma to waste sites which many brownfield sites will now have to be classed as.” Pierre Williams for the HBF, said: “Until now builders have been allowed to use their common sense to provide an environmentally-friendly way of remediating derelict land. It’s vital that ministers find a way around this problem.” (Sunday Express)
IMF: no sign of a price crash
There is no strong evidence that global house prices will fall, the International Monetary Fund says in its biannual report. It said: “Even though prices in some countries like the UK, Australia, Spain and the US might be high, the risk of decline in the near term is not very real at the moment.” The IMF’s assessment was in direct contrast with a comment from the Bank of England MPC member, Prof Steve Nickell, who told a conference this week that there is a “significant probability that house prices will fall”, although he later added that this might be avoided if earnings were to rise rapidly. (All Media)
The HBF attacks redwood nimby compensation plan
The HBF has rejected a plan by shadow deregulation spokesman John Redwood for housebuilders to buy off nimbys with cash. Wilson Bowden CEO, Ian Robertson, described the plan as a “recipe for further complication”. “The ideas start from a very dangerous premise that any of us are entitled to have no more development near our homes. We have to be careful not to institutionalise nimbyism.” Pierre Williams for the HBF, said: “Superficially this seems an attractive way of overcoming anti-development sentiment and speeding up the planning process. But in practice it would have the opposite effect. Rewarding nimbyism, especially by providing incentives for people to shout even louder for a bigger slice of cash is hardly the way to engender a more co-operative spirit and understanding of the need for more development.” Redwood responded: “Of course it rewards nimbyism but there are a lot of nimbys out there. I suspect that most of the people at the House Builders Federation are nimbys when it comes to their own homes.” (Times)
Redrow demonstrates its confidence
Upbeat Redrow has struck a note of confidence, predicting price rises of three to four percent next year, together with a promise to raise its dividend by 20 percent this year, next year and the year after. Paul Pedley, CEO, said: “The market has responded very well to the recent rise in interest rates. The rate of price growth has slowed and people are taking slightly longer to acquire a new home. However, there is nothing to suggest we are heading for anything other than a soft landing.” Mr Pedley also called for urgent action from government to address the housing crisis. Planning to increase production from 4,300 to 7,000 within the next 10 years, the company is producing a specialist regeneration team. The news came as the company announced sales up 10 percent and annual pre-tax profits up 17 percent to £124.1m. (FT, Express, Telegraph, Mail)
Tough times for london softened by undersupply
FPD Savills’ Richard Donnell says market conditions are “tough” but not “disastrous” according to the latest Central London Development Survey. Underpinning confidence is undersupply, with Savills, the Centre for Economics and Business Research, the HBF and St George CEO, Tony Carey, all agreed that such is the worsening imbalance between supply and household growth, that the long term future of the London market looks good. (Sunday Business)
Upward pressure on rates
Latest figures show an unexpected jump in high street sales up 6.5 percent on last year. This has surprised analysts and has boosted expectations that the Bank of England will raise interest rates further before the end of the year. (All media)
Prices up 2.1 percent in July
The official government house price index shows the market was still strong in July – a month which saw prices rise 2.1 percent and the average price reach £177,474, 14.3 percent higher on the year. This was broadly in line with Halifax and Nationwide figures. But the government figures, although official, are late and do not take into account the rapid ensuing slowdown. The Bank of England is not expected to take much consideration of these figures as a result. (FT, Guardian, Mail)
HBF note: The figures also show that the strongest price growth was in larger homes. This adds further weight for the need to rebalance the new homes market in terms of dwelling types and densities.
Second homes surge…
The number of second home owners has jumped 15 percent over the past year, as increasing numbers use their existing property wealth and hopes of capital growth to invest in this sector of the market. Government figures now put the figure in England at 295,000 with a further 25,000 owning second homes in other parts of the UK. The number owning a second home abroad is also up 14 percent to 177,000, a figure that has prompted the Inland Revenue to take a closer look at what tax loopholes might be being exploited. This figure is set to surge and exceed the domestic market as second home owners increasing look abroad to benefit from stronger house price growth. The South West has the largest chunk (22 percent) of the second homes market, followed by the South East on 19 percent. (FT, Mail)
… and first time buyers look abroad
First time buyers priced out of the British market are increasingly buying abroad to get a foot on the housing ladder. Spain and France are the most popular choices. The aim of many seems to be a hope that prices abroad will rise faster, helping them build up a capital base sufficient for them to buy in Britain in the future. (Mail)
Flatpack homes for self-build
The creators of BedZED have launched a new project, RuralZED in Cornwall, in which buyers will have to erect their own flat pack homes. Participants will pay £75,000 for the complete kit and attend a building course that should give them sufficient skills to put up and fit out the home kits. The project, in Camborne, gets underway next week. (Express)
Howard calls for tax cut on “green” homes as Blair calls for lead on climate change
The Conservatives would reduce Stamp Duty on green homes said Michael Howard, as he attempted to seize the environmental agenda before the next election. He suggested cuts in duty payable for buyers of energy-efficient homes, while those carrying out improvements could claim a rebate. Howard’s offensive on green issues pre-empted a speech by Blair who issued a warning for Europe to become much more proactive in tackling climate change. (Times, Guardian)