A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
HBF News
HBF submission to Barker Review of Land-Use Planning
HBF has presented its submission to the Barker Review of Land-use Planning. The key message is that the house building industry would not want the Review to lead to another root and branch reform of the planning system. HBF strongly urged the Review to focus on improvements to the current system, examining current and new policies to see how they operate in practice, how they contribute to, or detract from, economic growth and sustainable development, and whether they are consistent with allowing housing supply to be more market-responsive.
Specific recommendations include a presumption in favour of residential development for urban brownfield land, to plan ahead the release of Greenfield land to avoid a supply shortfall, a broad requirement for local planning authorities to promote the most efficient use of land rather than a crude brownfield target, and for there not to be a prescriptive mix policy for open market housing.
HBF meet Minister on transitional Part L arrangements
HBF Executive Chairman Stewart Baseley, HBF Technical Director Dave Mitchell, HBF Board member Mike Freshney and Chief Executive of Bovis Homes Malcolm Harris met with Housing Minister Yvette Cooper and Anne Hemming (ODPM Head, Buildings Division) to explain concerns over the problems with the transitional arrangements of Part L of the building regulations. The Minister agreed to reconsider and revert to HBF.
HBF welcome two reports on Britain’s ageing population
The HBF’s Retirement Housing Group welcomed two reports looking into the needs and aspirations of the country’s ageing population. Group Chairman Peter F Askew commented: “These reports illustrate how important it is to make proper provision for the country's ageing population. Appropriate and specialised housing is a crucial element in that equation; it improves the quality of life of older people and enhances and sustains their physical and mental well-being. We are calling for better co-ordination of services, not only between the providers of social service and health services, but also between housing departments and planners, to deliver what is needed if we are not to fail pensioners".
Political News
Conservatives back more house building…
Conservative leader David Cameron signalled a change in Conservative policy, coming out firmly in favour of increasing the level of house building in a bid to widen home ownership. In a column in the Independent on Sunday, Mr Cameron highlighted the problems faced by many first-time buyers, raising pressing reasons of social justice and economic efficiency as a need to spread the benefits of home ownership more widely. Mr Cameron observed that more and more first-time buyers rely on support from their parents, and if parents are unable to offer this support “then you face a growing, sometimes insuperable, struggle to get on the ladder”.
Mr Cameron criticised the Government’s proposed Home Information Packs, pledging to abolish them, as well as “tackling the disparity in demand for new homes and the supply”. The planning system does not give people a proper say in how their communities should grow, said Mr Cameron, so “it’s not surprising that development is unpopular when it is foisted on communities’ when it’s unsympathetic to the environment”. The Conservatives are to review the whole planning system, aiming for local communities to be more directly involved in shaping their communities with “clear rewards for welcoming new development”. Mr Cameron’s goal is “a Britain in which there are more beautiful affordable, eco-friendly homes”. (Independent on Sunday)
… to the CPRE’s dismay
The Campaign to Protect Rural England (CPRE) responded to David Cameron’s change in policy by describing the planning system as “hugely successful in delivering new housing in recent years”. CPRE Policy Director Neil Sinden denied that planning policy is an obstacle to meeting the nation’s housing need: “Meeting the needs of those priced out of the housing market should be a priority for any Government, but to suggest the planning system is part of this problem is wide of the mark.” (CPRE Press Release)
… while HBF welcomes the focus on first-time buyers
HBF welcomed David Cameron’s promise to address the problems facing first-time buyers. Executive Chairman Stewart Baseley commented: “The HBF welcomes David Cameron’s commitment to tackle the problems facing first time buyers - not least by looking at ways in which the tax system penalises home ownership and the disparity between demand and supply. Young people have effectively had the ladder pulled up by a property-owning generation who preside over a planning system that prevents others from sharing in the wealth and security of the property market.” (Full HBF Press Release)
EAC and ODPM clash over infrastructure for new homes
The cross-party Environmental Audit Committee (EAC) has criticised the Government’s housing plans as not accounting sufficiently for the need for back up infrastructure in its report “Sustainable Housing: A Follow-Up Report”. The Committee’s report said it was “deeply concerned that the ODPM is determined to build new homes first and then worry later, if at all, about how the supporting infrastructure can be created". EAC Chairman Tim Yeo said: “As a committee, we accept that the need to address the problem of housing affordability will inevitably result in more new homes being built, but we are concerned that consideration of the environmental impacts of these new communities ranks below a significant number of other economic and social factors. Indeed, houses are already being built, and will continue to be built, without sufficient regard to strong environmental standards.”
The Office of the Deputy Prime Minister hit back at the EAC, with Planning Minister Yvette Cooper saying: “The idea the government is going slow on infrastructure or the environment is absurd when we are increasing energy efficiency in new homes by 40 per cent this April and investing billions already in the Thames gateway and other areas to support new homes. I welcome the fact that the committee has now recognised the pressing case for building new homes. But their report simply does not reflect the substantial progress that is being made on infrastructure investment and environmental improvements.” (EAC Report, Evening Standard, Link to Epolitix Story)
Corporate News
Profits rise at Barratt as the “iPad” is launched
Barratt Developments announced that pre-tax profits rose by 4.3% to £163.9m in the six months to December, compared to the same period a year earlier, on turnover of £1,172m. Barratt completed 7,003 homes over the six month period, 2.0% more than in the same six months in 2004, while the landbank was increased by 6.6% to 63,356 plots, equivalent to 4.3 years supply. (Barratt's Interim Results)
Chief Executive David Pretty forecast that house prices would rise by about 3% in the month twelve months as he commented on Barratt’s new iPad product. The iPad is a 380 square foot one bedroom flat, larger than a studio flat, that will sell for between £80,000 and £120,000, which Mr Pretty described as a great “crash pad” for first-time buyers as well as older single people or couples. (The Times, FT)
Housing Market
Nationwide report a rise in prices in March…
House prices rose by a seasonally adjusted 1.1% in March, to stand 5.3% higher than a year ago, according to Nationwide. While prices were unchanged in February, there has been a 4.3% increase since last September. Nationwide do not expect the pick up in prices to accelerate, with Group Economist Fionnuala Earley commenting: “We do not expect that prices can continue to accelerate. While the macro economy remains fairly benign, with a reasonably robust labour market, there are increasing calls on income on the horizon which will constrain demand. Utility and council tax bills are rising and on top of this, affordability continues to be squeezed as house prices rise further. First-time buyers now spend about 40% of their take home pay on mortgage payments. Even in a market with historically low interest rates and competition beating borrowing rates down further, there is a limit to the proportion of income that borrowers will feel comfortable spending on their housing.” (Nationwide March House Price Index)
… as do Hometrack
House prices rose by 0.5% in March, to stand 0.1% higher than a year ago, according to website Hometrack. However, a 1.1% rise in London was described as putting “something of a gloss on the headline results”. Hometrack reported a continued mismatch between the number of new buyers entering the market and the volume of housing for sale, with prospective buyer numbers increasing by 7% in March while there was only a 3.7% increase in the number of new properties coming onto the market. The average selling price edged up by 0.1% to 94.3% of the asking price, while the average number of viewings per sale fell. (March Hometrack Housing Survey)
… although mortgage approvals slowed somewhat in February
The number of loans approved for house purchase fell slightly to a seasonally adjusted 115,000 in February, according to the Bank of England, down from a recent peak of 121,000 in each of the two preceding months. However, approvals were up 33.7% compared to the same month a year ago, although the rate of annual increase has slowed somewhat from around 50% in recent months. Approvals remain at relatively high levels on a historic basis, with more monthly approvals only seen during the boom from 2002 to mid 2004. (Bank of England's Statistical Release)
Other News
Homebuy Agents to help first-time buyers
Housing Minister Yvette Cooper announced details of 23 new “Homebuy Agents”, which are “one stop shops” to give first-time buyers advice on how they could be helped through the new shared equity Homebuy scheme. The Minister also announced a new Shared Equity Taskforce, which will identify the potential for further shared equity schemes, including the private sector.
Yvette Cooper said: “These are practical steps to help families get a first foot on the housing ladder - with extra investment in the Budget, one stop shops to give them help and advice, and Home Information Packs from next year to save them hundreds of pounds on searches and surveys.” (ODPM Press Release)
Microgeneration strategy launched
The Department of Trade and Industry launched a new strategy to increase local level energy production and reduce carbon emissions, including £50m worth of grants announced in the Budget. The strategy will include research into consumer behaviour in relation to microgeneration technologies and what drives early-adopter purchase decisions, while the ODPM will review local plans to assess the extent to which planning policy on the development of on-site renewables in new developments is being implemented. (DTI Press Release)
ODPM announces new measures to tackle climate change
The ODPM revealed a new package of measures to improve carbon savings through the planning system and the work of local authorities, as part of the Government’s Climate Change Programme Review. A new planning policy statement will outline how participants in the planning system are expected to work towards reducing carbon emissions in the locations and design of new developments. New best guidance practice will be outlined by ODPM and DEFRA, and after 2008 the local government performance framework will incentivise more authorities to improve performance. Key measures will include the revised Part L of the building regulations, the Code for Sustainable Homes, introduction of Energy Performance Certificates for all buildings, a review of measures to improve the sustainability of existing buildings, continued upgrading of energy efficiency of social and rented homes, a commitment to update building and water fitting regulations, prioritising development on brownfield land and reviewing the implementation of planning policy to ensure local authorities promote on-site renewable technology.
Latest allocation of Planning Delivery Grant
The Government announced the final allocation of £135m into the planning system through the Planning Delivery Grant (PDG). The PDG is part of a package to make the planning system more efficient, with grant allocation criteria set for progress in online planning, plan-making performance, speed of handling planning applications, increasing housing stock provision in areas of high need and supporting local authorities with issues of low demand for housing. 89% of the latest grant (which has totalled £485 since 2003) is directly allocated to local planning authorities. (ODPM Press Release)
Consultation/Key Publication Dates
Code for Sustainable Homes Consultation 5 December - 6 March
Implementation To be advised
Home Information Packs (HIPs) Consultation Closed 31 December
HIPs Dry Run Timeline published 16 Mar
HIPs Introduction 1 June 2007
Barker Review of Land Use Planning 25 January - 28 March
Energy Review Consultation 25 January - 14 April
Part L Implementation date 6 April
HBF/HBM/NHMB Events
New Homes Week 20 - 26 March
For all full list of HBF events please visit the HB Media website click here
Paul Samter
Senior Analyst - Economic and Policy Affairs
Home Builders Federation
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