A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Economic News
Interest rates unchanged
The Bank of England’s Monetary Policy Committee has left the repo rate unchanged at 4.50%, where it has remained since a 25 basis point cut last August. The decision had been widely anticipated by commentators and the financial markets. (MPC Decision)
Corporate News
Bellway announces results
In its interim results, Bellway reported that pre-tax profits were £87.8m in the six months to 31 January, 2.1% lower than the same period a year earlier, on turnover of £507.5m. The company sold 2,958 homes over the period, slightly more than the 2,930 in the same period a year ago. The land bank was increased by 8.5% to 23,000 plots.
Chairman Howard Dawe noted an upturn in market conditions: “February and March have shown early signs of improvement in the market with sales not being as incentive led as in 2005 and we remain cautiously optimistic at this stage.” (Bellway's Interim Results)
Housing Market
House price growth continues to accelerate
House prices rose by a seasonally adjusted 0.9% in March, according to Halifax. Prices for the first quarter as a whole were up 6.2% in comparison to the same period in 2005. Halifax also noted that annual house price inflation has slowed in all regions of Great Britain over the last year with the exception of London, where the annual rate of growth rose from 1.1% a year ago to 7.2%.
Halifax expects the rate of price growth to slow over the coming months, forecasting a rise of 3% for 2006 as a whole. Chief Economist Martin Ellis commented: “The weakening in the labour market, the continuing high level of house prices in relation to earnings and pressure on householders' finances from the recent hikes in utility and council tax bills are all expected to curb demand in the coming months, therefore preventing a sustained acceleration in house price inflation." (Halifax March House Price Index)
Equity withdrawal picks up
The level of mortgage equity withdrawal (MEW) rose quite sharply in the final quarter of 2005, according to the Bank of England. MEW registered £11.8bn in the fourth quarter, equivalent to 5.6% of post-tax income. This measure rose from a recent low of 3.0% of post-tax income in the first quarter of 2005 and, while still below levels seen in the housing market surge from 2002 to 2004, it is higher than at any other point over the past 16 years. The Bank defines MEW as “intended to measure that part of secured borrowing that is not invested in the housing market”. (MEW Press Release)
Other News
SEERA publishes regional plan
The South East England Regional Assembly (SEERA) published its draft regional plan, outlining a framework for the region for the next 20 years. The Assembly decided that an average of 28,900 dwellings should be built each year and progress will be monitored annually “to ensure that the acknowledged backlog of housing is addressed in the first 10 years of the plan”. It should be noted that the latest Government projections are for growth in the South East of 36,300 extra households per year over the next 20 years.
Development will be focused on the urban areas of the region, according to SEERA, with a “strategic approach to housing provision which supports an urban renaissance, delivers sustainable development and which provides everyone with the opportunity of a decent home”.
The plan proposes to continue to focus on brownfield development, deliver a sustainable increase in the supply of affordable housing (with a target of 35% of new homes as affordable), build new homes at an average of 40 dwelling per hectare, make more efficient use of the existing stock and create small-scale affordable housing in rural areas. (Link to South East Plan)
Government urges LAs to name community planning champions
The Government has recommended that Local Authorities (LAs) should appoint a councillor or officer to help groups and individuals play a greater role in shaping their communities through the planning process. These people could act as a bridge between those who might not understand the complexities of the planning system and help that is available through the independent Planning Aid Service.
ODPM Minister Baroness Andrews said: “Strengthening community involvement is an integral part of the government’s planning reforms. Planning shapes the places where people live and work, so it is vital that people should be enabled and empowered to take an active part in that process. By naming a champion, local authorities can ensure a wider a range of individuals, community and residents groups are given the opportunity to contribute to the planning process, helping them to bring forward their own plans to develop and improve the areas where they live. The more that councils and Planning Aid can work together the better.” (ODPM Press Release)
New design gurus at CABE
CABE has appointed six new members to its design review panel. One property developer is included, along with an expert in sustainable design, two architects, a planner, an urban designer and an academic.
The new members are: Bob Allies, architect and partner at Allies and Morrison; Alan Chatham, a property developer behind schemes including Brindleyplace and The Mailbox; Jim Eyre, an architect and partner at Wilkinson Eyre; Mark Swenarton, professor and head of architecture at Oxford Brookes University; Chris Watts, director of the sustainability consultancy Beyond Green, and Tony Wyatt, urban design and conservation group manager at Newcastle City Council. (CABE Press Release)
Affordability problem in the South West to deepen
The South West is the second least affordable region in the country, with house prices now around 10 times average income, and the problems are set to worsen, according to homeless charity Shelter. Director Adam Sampson told a meeting of housing professionals in Torquay that: “In a climate of soaring housing costs, declining levels of social housing, second-home ownership and loss of stock through the Right to Buy, the gulf between the housing 'haves' and 'have-nots' continues to grow, with thousands of homeless people and families trapped in temporary accommodation. The only way to tackle this crisis is to build more affordable social rented homes, reform the Right to Buy and curb second-home ownership.” (Shelter's Press Release)
Sub regional household projections published
The Office of the Deputy Prime Minister has published sub regional household projections, following the release of national and regional figures last month. (Link to Sub Regional Household Projections)
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
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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