A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Economic News
CBI cuts back its growth forecasts
The Confederation of British Industry (CBI) reduced its forecast for economic growth this year from 2.5% to 1.9%, contrasting sharply with HM Treasury’s expectation of 3-3.5% growth. Chief Economist Ian McCafferty commented: "The recently revised ONS data highlighted the loss of momentum in the economy since 2004, and the CBI forecast shows momentum being rebuilt only gradually. As a result, this year's rather modest growth of 1.9 per cent should be enough to hold off inflation in the face of high oil prices. The Government's ability to meet its 'golden rule' for public sector borrowing in the current economic cycle was greatly improved by its recent decision to begin the cycle in 1997, but this does not change the fact that the next cycle is set to begin on a poor footing." (www.cbi.org.uk)
Political Events
ODPM asks for bids for innovative projects to receive funding
The ODPM has asked for fully worked bids for over 70 projects for consideration for a share of £200m to develop new housing across three newer growth areas, and for infrastructure and community facilities to support these initiatives. Housing and Planning Minister Yvette Cooper said: “We need to build more homes so that the next generation of first time buyers can afford a place of their own. But they need to be homes in sustainable communities not just dormitories. That is why we are investing £200m in new infrastructure and community facilities in the areas where new homes will be built.” (www.odpm.gov.uk)
Company News
Persimmon report strong half-year results
Persimmon announced their interim results for the six months to 30 June, with pre-tax profits rising by 7%, compared to the same period last year, to £234.9m on turnover of £1093m. While completed sales fell by 1.7% to 5,954, average selling prices rose from £171,082 in the first half of 2004 to £183,581 (up 7.3%). The land bank was increased to 62,157 plots and the company are bullish on their immediate prospects. Chairman Duncan Davidson commented: “The recent reduction in interest rates, continuing low unemployment levels and the good fundamentals of the UK house building industry, together with the strong position of Persimmon’s business, give us great confidence for the future. In anticipation of the normal increase in activity during the autumn months we remain optimistic for the business in 2005 and are well placed for 2006 and beyond.” (www.persimmonhomes.com)
Other News
Boom in UK second homes forecast
Research commissioned by insurers Direct Line forecast that 400,000 more people will own a second home in Britain by 2015, a 24% rise from the current level. The research found an increasing number of people are buying a city property close to work for Monday to Friday, with Manchester, Liverpool and Birmingham prime locations for an urban second home.
A number of reasons were cited for second homes being in the UK rather than abroad. The research revealed that one in three of those surveyed said that convenient travel was a major factor behind the decision, one in five said investment properties were better in the UK than abroad and a similar proportion preferred the British culture and climate. (Times, Guardian)
Visit the HBF at HB05 - surf the net and maybe win a prize!
Please take the opportunity to come along to the HBF stand at Housebuilding 2005. You will have a chance to see the new hbf.co.uk and the new-homes.co.uk websites. HBF membership and communications staff will be on hand to tell you about the work of the organisation and our exciting plans for the future.
If this isn't enough, visitors to the stand - which is located in Bay 2 on the Gallery - will have the chance to win a case of champagne. What better way to remember your visit to this exciting conference?
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
Remember to register to attend Housebuilding 2005, the industry event which includes nine conferences, a free to enter exhibition and a comprehensive free briefings programme. Go to www.housebuilding2005.com