A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Political News
There is enough brownfield land for almost one million new homes
Figures released by the Department for Communities and Local Government (DCLG) reveal that there is enough previously-developed land suitable for housing to accommodate 980,700 new homes in England. Figures published from the DCLG’s National Land Use Database reveal that there were an estimated 63,500 hectares of previously developed land in 2005, 58% of which was vacant or derelict.
The Database also reveals that 56% of previously developed land is owned by the private sector, 11% by Local Authorities and 17% by other Government bodies. Ownership is unknown for the remaining 16%, a high share of which is considered likely to be in private ownership. (Previously-developed land that may be available for development: England 2005)
HBF Comment: In response to the release of the DCLG figures, HBF Executive Chairman Stewart Baseley commented: “Although it is welcome that the latest annual figures show there is still a substantial amount of brownfield land that could be made available for the new housing we need, this cannot in itself be the answer to all our requirements. We need to build at least 200,000 new homes a year to balance supply and demand and help improve housing affordability. The planning system must therefore provide sufficient developable sites consistently to make this a reality. The figures show that this will require a supply of greenfield as well as brownfield land. We also need to tackle the barriers to the development of brownfield sites for housing mentioned by the report and ensure the policy and regulatory framework plays its part in doing so.” (HBF Press Release)
Economic news
Retail sales growth as its strongest for twenty months
Retailers reported the strongest rate of annual retail sales growth since December 2004, according to the Confederation of British Industry’s (CBI) Distributive Trades Survey (DTS). A balance of 12% of those surveyed reported that sales in August this year were up in comparison to the same period a year ago.
Chairman of the CBI’s DTS Panel John Longworth commented: “The positive growth in sales over the summer holidays will be a welcome relief to retailers and has exceeded their expectations. There is every reason for retailers to feel positive and this is reflected in the survey. Some sectors have done better than others, though, and the Bank of England must be cautious about raising interest rates again as we wait to see the true impact of August's rate rise on the retail sector and wider economy.” (CBI's August DTS Press Release)
Housing Market
House prices rose in August, according to Nationwide…
House prices rose by a seasonally adjusted 0.8% in August matching the rise in July, to stand 6.6% higher than a year ago according to Nationwide. This is the fastest rate of annual growth since April 2005. Nationwide expect the market to slow somewhat, but not as sharply as in the last cycle of rising interest rates between November 2003 and August 2004, when the repo rate rose by a cumulative 1.25%, leading to a slowdown in the annual rate of price growth from 20% in July 2004 to 2.3% in August 2005.
Group Economist Fionnnuala Earley cited three reasons why the market will not slow as dramatically: “First, current macroeconomic conditions suggest fewer increases in base rates; secondly, fixed mortgage rates have moved more gradually, and thirdly, demand, particularly from the investment sector, is likely to remain fairly supportive.” (Nationwide August House Price Index)
… and Hometrack
Hometrack reported that house prices rose by 0.4% in August to stand 3.9% higher than a year ago. Hometrack Director of Research Richard Donnell expects the recent boom in London to run out of steam: “The recent rate of house price growth across the capital is unsustainable over the medium term as affordability levels are rapidly becoming stretched once again. Interest rate rises will only compound this process. Indeed, there are signs that buyers are starting to test pricing levels with agents reporting a slight decline in the proportion of the asking price that is being achieved. The under-performance in house price growth across the regions away from southern England is set to continue in the short term as the un-winding of stretched affordability levels continues to run its course in the wake of the major boom in prices between 2000 and late 2004.” (Hometrack's July Housing Market Survey)
Mortgage market remains buoyant
The mortgage market remained strong in July. Figures released by the Bank of England showed that a seasonally-adjusted 120,000 loans were approved for house purchase in July, equaling a recent monthly peak at the turn of the year. Approvals were up 18.9% compared to July 2005 on a non seasonally-adjusted basis, and were 22.4% higher in the three months to July compared to the same three months a year earlier. (Bank of England Press Release)
Other News
There are not enough new family homes
A survey by SmartNewHomes.com found that 94% of young families surveyed felt there were not enough new homes available for families to buy. Managing Director of SmartNewHomes.com David Bexon said: “This survey reinforces our campaign – not only are there not enough new family homes on the market, but those that are available are beyond the budget of over a third of buyers. Surely if a massive 94% of consumers feel there is a shortage of suitable family homes the Government should take action and adjust their current planning policies accordingly.” (SmartNewHomes.com Press Release)
House building sector expanded in the second quarter
Figures released by the Department of Trade and Industry showed that the volume of new private housing work was 2% higher in the second quarter compared to the previous quarter, and 2% higher compared to the same period a year earlier. New work in the public housing sector was 5% higher than in the first quarter and 8% higher than in the second quarter of 2005. The data also revealed that total employment in the construction industry (the employment data is not broken down by sector) fell by a seasonally-adjusted 0.4% from the previous quarter to 1.813 million. (DTI Statistical Releases)
Consultation/Key Publication Dates
Code for Sustainable Homes Implementation Autumn
Home Information Packs (HIPs) Revised regulations 14 June
HIPs – 10 to 12 planned trials Autumn 2006
HIPs Introduction 1 June 2007
Consultation on DCLG structure June 2006
Implementation of new DCLG structure September 2006
HBF Events
HBF Annual Planning Conference 14 September
Housing Market Intelligence 2006 10 October
Housebuilding 2006
Business Design Centre, London N1 10 &11 October 2006
For a full list of HBF events please visit HBF Events & Meetings
For details of HB Media events click here
Paul Samter
Senior Analyst - Economic and Policy Affairs
Home Builders Federation
Housebuilding 2006
10 and 11 October 2006, Business Design Centre, London N1
Now in its third year the exhibition, housing market intelligence conference, management conference programme, free briefings and the Housebuilding Innovation Awards bring together all that is new in the housebuilding industry.
Visit www.housebuilding2006.com for more information.
Pre-register today to be entered in to a prize draw to win two trips to the Ashes Down Under (match tickets, flights and accommodation)