A weekly news summary by Pierre Williams, the HBF's head of media, covering all aspects of the housebuilding industry. Available to members only.
Price Falls Bottoming Out
House prices fell again in December according to the Rics, but at their slowest pace for three months. Rics said conditions are in place for a mild pick-up in prices across the country. Although a balance of surveyors reported minor price falls in December, London, which traditionally points the way forward for prices, saw almost no change. Rics described the market as being in a stable condition Other index providers painted a similar picture of very moderate falls indicating a reasonably healthy if not exactly buoyant spring market. Conventional wisdom that those regions which were last to see a surge in prices, will be the first to suffer, is broadly correct. Wales has suffered most, with a 6.2% fall from October to December last year. (All media)
Bank Dashes Hopes of Early Rate Cut
Bank of England Governor Mervyn King has effectively dashed hopes of an early cut in interest rates. He told a CBI conference that early indications of poor High Street trading over Christmas were not solid enough evidence of the need to cut rates. He suggested that with mixed signals from retail and business sectors and inflation seemingly on an upward course, the true picture of what direction interest rates should take would not be revealed until Easter. (All media)
Yorkshire Dales Bans New Homes for Outsiders
The sale of new homes in the Yorkshire Dales National Park is to be restricted to people who live or work there. The policy, which will almost certainly be copied by other National Parks across the country, is being introduced in an attempt to curb the sale of the existing stock as holiday homes to wealthy outsiders. The 2001 census showed 15% of housing in the Dales was made up of second or holiday homes and average prices have how reached 240,000. Pierre Williams for HBF said that it was the restricted supply of housing that had pushed up prices and with virtually no new housebuilding in these areas, the Park authorities were simply promising locals homes they knew would never be built. (BBC News, all media)
Prince Charles Housing Guru Attacks Prescott
John Prescotts housebuilding plans threaten to repeat the mistakes of the 1940s and 50s says Hank Dittmar, the American appointed last month as the chief executive of the Princes Foundation for the Built Environment. Dittmar said that although he had not had time to visit all the growth areas, he felt that housing plans for these areas would follow an un-inspirational and non-sustainable car-centred pattern. He said the plans were a a moment of great danger as well as great opportunity (Telegraph)
Government Set to Approve Limited Right-to-Buy for RSL Tenants
Housing Association tenants are to be given the right to buy their homes under plans to be unveiled by the government next week. But the scheme will be limited to maintain housing for the poorest. About 300,000 tenants are expected to be offered the right to buy. There are also plans to allow some tenants who cannot afford the full cost to buy a share of their home. Tellingly, Tony Blairs policy chief Alan Milburn and deputy prime minister John Prescott are at odds over how far this extension of right to buy should go. This has widened the split in government between those who want to expand the property-owning democracy and those who want more affordable housing. (FT, Sunday Times)
Cities Need Family Homes
The chronic shortage of family homes in city centres threatens the regeneration of these areas. The issue is likely to feature strongly at the governments forthcoming Developing Sustainable Communities Summit at the end of this month. Pierre Williams for HBF said: Theres no such thing as a sustainable community without families. You need to cater for all parts of the community. Richard Donnell of FPDSavills said some housebuilders were doing what they could to better balance new developments. He said: The penny is dropping that building loads of flats is not the answer. (Observer)
Bellway Predicts Record Profits
Bellway has predicted record profits for the year to July 2005. The board is confident that profits will exceed the 206m achieved for the year to July 2004. Strong forward sales means it has already achieved more than 80% of its sales target to July, making it very well placed to cope with any cooling of the market. Shares jumped 24.5p to 830p on the news. (FT, Express)
Barratt Expecting Record 2005
Barratt also hopes to achieve record results in 2005. Completions rose 2% during the first half of its financial year and its production of social housing doubled to 1,256 units: a figure that should reach 2,000 for the full year. CEO David Pretty said that although social housing was a small part of Barratts business, the margins it produced were similar to private completions. Social housing is a growth sector and because it is funded by the state, it is a gilt-edged business, he said. As a result he hopes to see social increase from 10% of the business now to 15% in the future. Mr Pretty also said the core business remained strong with healthy visitor levels. (Telegraph, Guardian, FT, Times, Independent, Express)
Merrill Lynch Bullish on Housebuilders
Despite endless predictions to the contrary, Britains housebuilders continue to prosper. Merrill Lynch this week said it could see nothing to contradict the view that the housing market is destined for anything other than normality and said stocks remained cheap on earnings multiples. It picked on five favourites Persimmon, Redrow, Wilson Bowden, Barratt and Westbury all of which rallied respectively 21p to 696.5p; 11.5p to 394.75p; 31p to 1135p; 15p to 603p and 11p to 466p. (Times)
Rock Eyes Up Whole of Countryside
Rock Pacific, the investment company that quietly built up a 28% stake in Essex-based Countryside Properties, is considering a bid for the whole company after the takeover panel granted it more time. Rock first announced its interest in December, a month after Countrysides founders - the Cherry family - tabled its own bid for the firm. But Rock never put in a firm bid, complaining that it hadnt been given enough access to company information. This week, the takeover panel extended Rocks bidding deadline after it became clear the Cherrys 275p-a-share bid wouldnt gain enough support. Rock is thought to be considering offering 285 290p a share and has until this Monday (Jan 24) to make up its mind. (FT, Sunday Times, Sunday Telegraph, Times)
MPs Demand Inquiry Into 130% Mortgages
News that Bradford & Bingley is offering 130% mortgages has prompted a Treasury committee to call for an inquiry. The 130% instant negative equity mortgage has been designed for buyers who have found the home they want but need to clear credit card and other debt at the same time. But the idea has attracted massive criticism from consumer watchdogs. One committee MP said: The general feeling is that it is good that the housing market is starting to cool down. But to reheat it using this method is wrong. (Times, Mail)
The Countryside Saviour
An 89-year-old former builder has been lauded as a saviour of the countryside by the media for refusing to sell off land earmarked for 558 new homes. He said he was refusing to sell the seven-acre, 4m North Kent site because the view was priceless. Local councillors queued up praise the decision. He is a man of principle. He is the small man standing up against the might to the developers, said one. (Telegraph, Mail, Express)
HBF Note: Whether the 558 families denied a roof over their heads applaud the octogenarians decision is doubtful. But the scale and one-sided view of the medias coverage of the story shows just how much remains to be done.