A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
HBF News and Activity
HBF raises concerns over Home Information Packs
HBF has called for a proper trial of Home Information Packs (HIPs) to ensure that they deliver the full benefits to the consumer that they are intended to. HBF Executive Chairman Stewart Baseley commented: “We simply do not know what impact Home Information Packs will have on the housing market. While no-one could object to seeking improvements to benefit consumers, the cost of these packs could result in fewer homes coming on to the market. In the context of the current housing shortage, this would damage consumer interests most of all. I urge the Government to conduct a proper trial to road-test the packs. We need to ensure that consumers do not become the unintended losers of a scheme set up to serve their interests.” (HBF press release)
HBF Barker Conference Filling Up
Places are rapidly filling up following the announcement that David Miliband will address HBF’s major Barker Conference in London on 23rd February (9.30-16.00). An early booking is recommended to avoid missing out. Other speakers will include Kate Barker, Professor Sir Peter Hall and James Paton, HM Treasury.
To book a place please click here or contact the Events team on 020 7960 1646 or email.
New Homes Week
The New Homes Week Daily Express competition to win a free mortgage for a year (up to £12,000), supported by Halifax, is now running on Saturday 18th March and Monday 20th March. New Homes Week is 20 - 26 March.
Economic News
Interest rates kept on hold
As had been widely anticipated by market commentators, the Bank of England’s Monetary Policy Committee (MPC) left the repo rate unchanged at its meeting on 8/9 February. Opinion is split on whether there will be a cut in rates in the coming months or no change for the foreseeable future. Next week’s publication of the MPC’s “Inflation Report” should provide a greater insight into the Committee’s thinking. (MPC Decision Press Release)
Retailers continue to feel the pinch
The British Retail Consortium (BRC) reported that retailers continued to witness tough times in January, with like-for-like sales only 0.2% higher than in the same month a year ago, the weakest start to the year since the survey began in 1995. However, total sales were up 3.4% on January 2005. For the three months to January, like-for-like sales were 1.1% higher than the same period a year earlier, while total sales were up 3.6%.
BRC Director General Kevin Hawkins commented: “After the pre-Christmas upturn, we are now back to the reality of a tough, discount driven retail market. The message from every sector of our industry is the same. The squeeze on consumer spending continues unabated. The economy badly needs a cut in interest rates.” (BRC Retail Sales Monitor)
Political News
Shadow Chancellor calls for more homes to be built
Shadow Chancellor George Osbourne signalled a change in Conservative thinking, calling for a reassessment of what is classified as Greenfield land, at a speech to the “Property Week” conference in Newport, Wales. His comments were based in the context of building more homes to help alleviate affordability constraints for first-time buyers.
Mr Osbourne said: “We should take a fresh look at what we mean by a ‘green field’ site. Too often our current system protects the marginal scrubland, because it is ‘green field’ while at the same time lets precious urban green spaces like gardens get built over because they are labelled ‘brownfield’.”
Mr Osbourne was also critical of Section 106 agreements, which he said were unable to meet the local impact of development, and the proposed Planning-gain Supplement, the proceeds of which are not expected to end up with the local communities. Mr Osbourne said: “We should instead look at how those communities, and not the central government, can be directly compensated for planning gains that lead to a loss of amenity or additional strain on local infrastructure. So I think the outline of a new bargain with your industry is emerging. We should give local communities a much greater say in development. But, in return, those communities will need to balance the interests of today’s homeowner with the home-owning aspirations of their children.” (Report of Speech on Conservatives' Website)
HBF Press Comment: “The HBF welcomes the acknowledgement by George Osborne of the impact of the housing crisis and the urgent need to build more homes. The announcement that the party will take a fresh look at the planning system and the definition of greenfield land signals an important new approach to housing. The current planning system is constraining development, exacerbating Britain’s housing shortage and making homes less affordable.” (HBF press release attached)
Corporate News
Bellway trading update
Bellway announced, in a trading update, that it sold 2,958 homes in the six months to 31 January, 1% more than in the same period twelve months earlier, ahead of interim results to be published on 4 April. The statement noted that the company’s focus “continues to be firmly established on the lower to middle market, the area of strongest demand.” (Bellway's Trading Update)
Bellway chosen for 5,000-home Leeds regeneration scheme
This public-private partnership, named the Easel project, will bring 5,000 new homes to the city over a 15 to 20 year period. Bellway chief executive John Watson said: "We now look forward to finalising the development agreement and working with all the local stakeholders to deliver a high quality and sustainable development that will realize the community’s ambitions for the area." (Housebuilder)
Housing Market
House prices fall in January
House prices fell by a seasonally adjusted 0.4% in January, according to the Halifax House Price Index. However, this follows sharper growth in prices in recent months than has been seen in other house price indicators, and Halifax still reported that prices in the three months to January were 5.1% higher than in the same period a year earlier.
Chief Economist Martin Ellis commented: “A mixed pattern of monthly price rises and falls is a typical feature of a slow housing market. The housing market remains well underpinned by a combination of ongoing economic expansion, high employment and historically low interest rates. The continuing high level of house prices in relation to earnings, however, should curb housing demand. Additionally, both council tax and utility bills are expected to rise by well above inflation in 2006." (Halifax January House Price Index)
Market volumes up in the fourth quarter
The Land Registry (HMLR) reported that the number of residential property sales rose by 12.6% in the fourth quarter of last year, compared to the same period twelve months earlier. HMLR also reported that prices fell by an unadjusted 1.7% between the third and fourth quarter, although little can be read into this as the data is neither mix or seasonally adjusted. Average prices were up 4.9% compared to a year earlier, a figure broadly consistent with the major house price indices. (HMLR Residential Property Price Report)
Other News
Calls for household participation in tackling environmental concerns
Independent charity the Green Alliance called for a package of measures to be introduced to engage households in taking action on three environmental issues (energy, water and waste), in a report carried out by the Policy Studies Institute. The charity called for an increase in VAT on new homes from the current 0% to 5%, a reduction in VAT on major refurbishments that meet standards set out by the Code for Sustainable Homes and a reduction in the Planning-gain Supplement for new homes that meet the Code.
At an individual household level, the charity called for a Council Tax reduction for households who install insulation measures, the universal introduction of metering of water use and variable waste charging, to allow local authorities to charge households for the amount of unsorted rubbish they throw out. (Report Summary)
Audit Commission recommends that LAs outsource planning work
Local Authorities should outsource more of their planning work to the private sector, according to the Audit Commission. With a national shortage of planners and councils struggling with the big increase in planning applications, largely driven by the need for new homes, the Commission recommended that private companies should be used to take on mainstream planning, not just specialised services, as is currently the case. The Commission said that the private sector could be used to cover almost the entire planning service. (Financial Times)
Consultation/Key Publication Dates
PPS3 Consultation: 5 December - 27 February
Planning-gain Supplement (PGS) Consultation: 5 December - 27 February
Select Committee inquiry into PGS: 27 February
Code for Sustainable Homes Consultation: 5 December - 6 March
Home Information Packs (HIPs) Consultation: Closed 31 December
HIPs Dry Run: Ongoing
HIPs Introduction: 1 June 2007
Barker Review of Land Use Planning: 25 January - 28 March
Energy Review Consultation: 25 January - 14 April
Lyons Enquiry into Local Government Consultation: Closes 13 March
Part L Implementation date: 6 April
The Welsh Assembly Government's Strategic Framework for Economic Development Consultation: 28 February 2006
HBF/HBM/NHMB Events
Barker Conference: 23 February
New Homes Week: 20 - 26 March
For all full list of HBF events please visit the HBF website click here.
Paul Samter
Senior Analyst - Economic and Policy Affairs
Home Builders Federation
For daily news updates for the housebuilding industry from Housebuilder magazine go to http://www.housebuilder.co.uk