A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Bank of England’s MPC leave interest rates unchanged
The Monetary Policy Committee left the repo rate unchanged at 4.75% at its meeting on 6/7 April. While there had been a gradual drift in MPC members’ voting patterns towards a 25 basis point hike at recent meetings (with two of the nine members voting for a rise in March), it would have been very surprising had rates been changed so close to the election and with recent economic data having being rather less bullish. (http://www.bankofengland.co.uk)
Halifax reports a 0.5% rise in prices in March
The Halifax House Price Index revealed a 0.5% rise in prices in March, on the back of a 0.5% fall in February, as the annual rate of price growth dropped to 9.7%, down from 12.1%. The data provides further evidence of a flat market, with Halifax commenting: “Overall, there has been virtually no change in UK house price since September 2004.” (http://www.hbosplc.com/economy/nationalpressrelease.asp)
CIPS report a decline in housing construction in March
The Chartered Institute of Purchasing and Supply’s (CIPS) construction survey for March showed the first decline in house building after more than six years of continued increases. HBF chief executive Rob Ashmead commented that, “The house building industry remains strong. This first-time reporting of a marginal decline in construction activity may reflect a one-off dip in confidence or is a sign that the market is adjusting to steadier conditions.” (FT, Guardian)
MPs criticize government’s regional housing strategy
A cross party committee of MPs criticized the government’s plans to demolish a number of homes in the North and Midlands while building in the South East. The committee attacked the plan as too narrow, claiming there needed to be a much wider appraisal of housing need and for there to be a “better balance between parts of the greater south east with a severe housing shortage and the areas suffering from low demand in the midlands and the north.” (FT, Guardian)
Think tank attacks government’s housing policy
Think tank, the Institute for Public Policy Research, published a report criticizing the government’s housing policy and much of the Barker review. The IPPR challenged the Barker review’s main conclusions, being unconvinced by the claim that house price inflation is making housing less affordable and concluding that increasing housing supply in the South East is not the way to make homes more affordable.
The IPPR argue for more government resources to be put into social housing rather than increasing private house building. The Barker Review estimates that house price inflation could be halved by building an extra 141,000 homes per year, while the IPPR says only an extra 59,000 per year are needed to achieve this goal. (FT)
Government looks to crack down on household emissions
The government are considering introducing new building regulations in order to reduce carbon emissions. Figures from the Department of Trade and Industry show that emissions have rose by 2.2% in 2003 and 1.5% in 2004.
Tax breaks for energy efficient household appliances are also being considered alongside larger investment in renewable energy and a new generation of nuclear power stations. (Guardian)
Transfer of NHS sites for housing begins
Transfer of the NHS land portfolio to English Partnerships has moved forward this week, with the handover of 67 sites out of a total of 96 designated for future development, including homes proposed as part of the Design for Manufacture competition, which forms part of the government's First Time Buyers' initiative.
"The transfer is the result of a strategy English Partnerships initiated on behalf of the ODPM to identify how public sector agencies could work together in a smarter way and at the same time maximise the potential of their assets," said John Lewis, director of EP's strategic joint ventures division. (http://www.englishpartnerships.co.uk)
Influential construction best practice bodies merge
Government-backed Constructing Excellence has merged with independent supply chain body Be (Collaborating for the Built Environment) to form Constructing Excellence in the Built Environment. Construction minister Nigel Griffiths welcomed the move, which is aimed at making the new body a strong facilitator between clients, industry and the government, to provide support and resources to the industry. Griffiths said: "I'm very enthusiastic about Constructing Excellence and Be coming together. It gives a powerful voice for the improvement agenda and creates one of the largest construction business networks in the UK."
Dennis Lenard, chief executive of Constructing Excellence in the Built Environment, outlined how it would progress. “This new organisation will lobby the industry for progress on the change agenda. It will be influential at government level, helping to shape and drive policies that are positive for the industry. It will be supportive and educational at client level, driving innovation through demand.“ (http://www.constructingexcellence.org.uk)
Paul Samter
Senior Analyst - Economic and Policy Affairs
House Builders Federation