A weekly news summary covering all aspects of the housebuilding industry from Pierre Williams, the HBF's head of media. Available to members only.
Booms grinds to a halt
The house price boom has ground to a halt according to the latest from the Rics. It said prices were static in the Midlands and East Anglia, whilst they fell in the South West for the first time since the Iraq war. In London and the South East, the number of surveyors reporting price falls picked up. Only the North East and Scotland showed “robust” increases. Overall, surveyors reporting price rises outnumbered those reporting falls by only three percent - down from 17 percent in June and 45 percent in March.
Given the considerable weight given by the MPC to Rics data and despite the revelation that last month’s decision to raise rates was unanimous, City analysts see this as a further sign that interest rates will peak at five percent and may well be pegged at their current 4.75 percent. Bank of England governor Mervyn King said: “Measures of both prices and activity in the housing market indicate that house price inflation may now be beginning to ease. The central projection is for a sharp slowdown in house price inflation.” (All media)
Prices drop £4,000 in five weeks
Figures from the property website rightmove paint a bleaker picture. It says asking prices have fallen an average two percent across England and Wales. But the greatest falls were in Wales, 4.3 percent, London 4.3 percent and the East Midlands, 2.8 percent. Asking process in Yorkshire and Humberside rose, but by a much more moderate 1.3 percent.
The latest from Hometrack suggests prices have fallen for the second successive month - but at a lower rate. It claims prices fell 0.1 percent in August, that buyers are down a further 4 percent, that prices achieved slipped for the fourth successive month to 94.4 percent, and that the number of sales agreed fell by 2.1 percent. (All media)
Buy-to-let slows dramatically
Growth in buy-to-let slumped during the first half of the year according to CML figures. The number of landlords taking out mortgages grew by five percent during the first half compared to a 50 percent jump during the second half of 2003. This provides further evidence that the overall market is cooling rapidly. CML director General Michael Coogan, said: “Investors are taking a sensible approach and adjusting to tighter market conditions.” (Independent, FT)
But mortgage lending reaches “last hurrah”
Mortgage lending hit an all time record in July of £29.2 billion, beating the £28.2 billion record set in June. Loans specifically for house purchases also rose to a record £14.7 billion for 131,000 transactions - the highest monthly figure for almost two years. But these relate to sales agreed in Spring and it is universally expected that next month’s figures will be lower as the recent slowdown in the market starts to make itself seen in statistics. (All media)
Government warns of “property investment scams”
The DTi is promising a crackdown on “get rich quick” property investment schemes. Seminars on how to become property millionaires are enticing investors to pay thousands of pounds to learn how to deal in property with little or no capital. Some might end up getting rich but “the vast majority end up losing thousands.” The DTi said: “In reality the properties are often derelict and worth a fraction of the money paid for them and the promised tenants are non-existent.” (FT)
The benefits of nimbyism
Nimbys are good. They improve poor planning decisions and prevent the worst excesses of the private sector. At least that’s what Valeria Paul I Carill of the University of Barcelona, believes on the basis of a study of four planning applications - two in Australia and two in Spain. Carill, whilst accepting nimbys were selfish and could try and keep newcomers out, said: “Nimbys are in fact protecting the whole community from decisions that might not be in the interests of the locality. The interest of the developer is obviously to make a profit... but will they do anything for the quality of life for the rest of the community? The answer is often no, and so the protesters are an essential part of getting the merits of a plan discussed.”
The HBF's CEO, Rob Ashmead, dismissed the study, its findings and its methodology: “The views of the local community are important but the flat rejection of all proposed new development is contrary to the interests of UK plc and denies home-ownership to the less well-off.” (Guardian, Telegraph, BBC)
Tories jump on IHT bandwagon
The Conservatives have finally seized on figures revealing how Inheritance Tax has soared since Labour came to power and is currently delivering £2.8 billion a year to the Treasury. When this government came to power in 1997 only one town in the country - Gerrards Cross in Buckinghamshire - had an average house price higher than the IHT threshold. Now there are 86 with prices above the current threshold of £263,000. House prices have increased by 130 percent since 1997, whilst the IHT threshold has increased just 22 percent.
Warning that this would discourage pensioners from passing on their wealth to offspring, shadow chancellor Oliver Letwin, said: “This is yet another example of how Labour’s fat and bloated government is eating more and more of people’s money. Homeowners all over Britain are paying the price of Government’s inability to break the cycle of ever-higher taxes and failing public services.” (FT, Mail, Express)
Death of the front garden raises flood risk
As suburban front gardens disappear under concrete for car parking, the Environment Agency is warning this is greatly exacerbating flood risk. The agency is now urging homeowners to resist paving over front gardens and allow rainfall to soak away naturally rather than run off into sewers incapable of dealing with heavy flows. The government’s design watchdog, Cabe, called the loss of lawns and flower beds a “lazy” solution to parking shortages.
Townies save the countryside
Far from undermining communities, wealthy 'townies' that move out to enjoy village life are creating jobs, safeguarding services and working nearer to home than their unfair stereotype suggests. Many are setting up local businesses or working from home and each self-employed incomer creates an average 2.4 full-time jobs says the report by Dr Aileen Stockdale of Aberdeen University. She said: “Sometime people in a village see in-migration as the cause of all their problems. There is a tendency to focus on the negatives and ignore the positives. In fact, many migrants to rural areas contribute greatly to their communities. “ (Telegraph, Mail)
Construction drive for workers
The CITB has launched another drive to encourage young people to consider a career in construction as industry increasingly turns to Eastern Europe and beyond in its search more skilled labour. The HBF's Pierre Williams said: “We do face a serious shortage, everything from bricklayers to plumbers. There are polls of experienced workers in Eastern Europe and they are desperately needed.” Taylor Woodrow is focusing on retaining existing staff with improved packages including private health insurance, boosted bonuses and improved pension schemes, whilst Berkeley is employing translators to help communications on its building sites. (All media)
Government: elderly could share homes with unemployed
The government’s latest plan to solve the housing crisis is for young jobseekers to share homes with lonely pensioners. The idea is for the elderly to be invited to offer a spare room to the unemployed in return for company and help around the house. Health minister Stephen Ladyman, said: “In return for subsidised rent, young single jobseekers in London and the South East could be live with an older person, do a bit of shopping and agree to spend a bit of time during the week chatting to them.” (Independent)