A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Economic News
Bank of England raises interest rate to 5% to combat inflation fears
As predicted by almost all commentators, the Bank of England’s Monetary Policy Committee voted on 9 November to raise the official Bank Rate paid on commercial bank reserves by 0.25 percentage points to 5.0%.
The MPC acted to head off a build up of inflationary pressures following the UK economy recording its fourth consecutive quarter of firm growth. The MPC noted that credit and broad money growth remain rapid, and asset prices have continued to rise. In addition, while household spending has been volatile the underlying picture appears to be one of moderate expansion. Many commentators expect a further rate rise in the New Year.
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But NAEA voices concern about impact on "under performing areas"
The National Association of Estate Agents issued a statement saying that it believed the MPC's decision "could be a rise too far for a significant number of areas in the UK where the housing market is under performing". Chief Executive Peter Bolton King said that while the national market appeared to be extremely strong, " There are, however, vast regional differences with some areas significantly outperforming others.....This further rate rise could have a dterimental effect on these areas."
Government and Political News
New report published on the Planning-gain Supplement
The Communities & Local Government Select Committee has published a report into the Planning-gain Supplement following an inquiry to which the HBF was asked to give oral evidence earlier this year.
The report concludes that a PGS represents "one mechanism for increasing resources for [infrastructure] investment", but "should not be seen as, or treated as, a replacement for existing sources of funding beyond those aspects of planning obligations which it will subsume." The Committee also backs the proposed collection of the PGS by central Government rather than local authorities provided "the overwhelming majority of PGS revenue is recycled to local authorities".
The report claims that the PGS offers "greater certainty, greater equity and a less demanding planning regime" for developers, but acknowledges that witnesses to the inquiry raised "many justifiable concerns" about the implementation of a PGS that need to be addressed. The Committee state that "Simplicity in its administration and clarity in its application are essential to the success of PGS" and call for standard definitions for key aspects of the valuation process.
Download Government report
Responding to the report in a press statement Stewart Baseley, Executive Chairman of the Home Builders Federation (HBF) said:
“The HBF agrees with the Committee’s opening conclusion that, to achieve a step-change in housing supply, adequate infrastructure needs to be provided. However, after detailed analysis and consultation on the Government’s proposed Planning-gain supplement, the industry has significant concerns that the complexity of the levy may not help bring more land forward for development, nor speed up the planning process.”
“The HBF therefore fully supports the Committee’s belief that simplicity and clarity are essential, and agrees that much more work needs to be done - such as further statistical modelling and cost-benefit analysis - before the Government can implement the levy. The HBF is keen to work with the Government to help find a workable route forward.”
In September, the HBF published a joint report undertaken by Knight Frank LLP which demonstrated that the PGS, as envisaged by the Government, may not deliver the levels of funding sought for new local infrastructure and could render some smaller developments unviable.
Download HBF report
HIPS trial run commences
According to AHIPP, the Association of Home Information Pack Providers, the rolling launch of the first regional trials for HIPs commenced in Newcastle on the 6th of November and is due to finish with a launch in Bath on the 17th November:
The dates for the implementation to occur and the postcodes for the houses eligible for the Government incentives are:
6th November in Newcastle. (NE1 - 13, NE27 - 36 and NE98)
8th November in Northampton. (NN1 - 5, NN8 and NN9)
10th November in Huddersfield. (HD1 - 9)
13th November in Southampton. (SO14 - 19)
15th November in Cambridge. (CB1 - 5)
17th November in Bath. (BA1 - 3, BS31, BS39 and BS40)
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The next early roll out locations are due to be announced on 17 November.
…and HBF organises meeting to discuss HIPs
HBF is organising a meeting on Thursday 16 November at 2pm to discuss HIPs. An overview of HIPS will be given by Paul Broadhead of AHIPP and details of the dry-run will be outlined by Chris O’Dea, Dry-Run Manager, DCLG
To attend the meeting email jo.turner@hbf.co.uk
New National Housing and Planning Advice Unit Set Up
In response to one of the recommendations in the Barker Review of Housing Supply a National Housing and Planning Advice Unit has been established by the Government to provide independent advice on improving housing market affordability . It will be chaired by Stephen Nickell, until recently a member of the MPC.
The National Housing and Planning Advice Unit (NHPAU) will help strengthen the housing market evidence base and analysis currently available to the regional planning bodies with a view to informing their decisions on regional affordability targets. It will have a remit covering the provision of advice on the methodology for translating such targets into housing numbers and the assessment of the implications of the targets for the level and broad distribution of future housing supply. The stated aim is to help ensure that new homes identified in regional plans have a positive impact in improving housing affordability.
Policy Exchange call for 'greener cities'
The centre-right think tank Policy Exchange have published a series of essays entitled "Living in the city."
The main conclusions include recommendations for improving the quality of the urban environment via:
a moratorium on all development of green land in urban areas, including back garden 'brownfield' sites
'x-listing' of eyesore buildings, followed by demolition
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Housing Market
Land Registry report average house prices over £200,000
Figures from the Land Registry have shown that the average price of a new homes in England and Wales is now over £200,000 for the first time.
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HBF News
Technical conference addresses future challenges
HBF’s technical conference took place this week in Nottingham. Chaired by Neil Cooper of NHBC the conference opened with speakers Mark Coulshed of DCLG and Barry Turner of LABC speaking about the future challenges of the Building Regulations facing the industry, followed by the ‘Robust Details approach’ presented by Dave Baker. The afternoon session focused on the Code for Sustainable Homes with the key speakers being Alan Yates of BRE, Emyr Poole of English Partnerships and Dave Mitchell of HBF.
Other News
New Figures Show Potential 7M Tonne Home Carbon Savings from Existing Stock
Millions of tonnes of carbon and billions of pounds from fuel bills could be saved by the owners of existing homes through simple measures like cavity wall insulation, new Government analysis reveals.
The initial report from the Review of the Sustainability of Existing Buildings shows that millions of homes across the country could benefit from cost effective improvements which cut both carbon emissions and fuel bills. Widespread implementation of such improvements could according to the report save around 7MtC (million tonnes of carbon) a year.
Yvette Cooper said:
"This research suggests our existing homes and buildings could offer some of the most cost effective ways to cut our national emissions over the next few years. After all, many of the measures needed to cut carbon from our homes also help cut our fuel bills as well.
"New housing should be seized on as an opportunity to increase environmental standards rather than as a threat. The sheer scale of new building is an opportunity to raise standards, to develop and implement new technologies and reap the benefits of economies of scale.
"To make the difference we need by 2050 we will need radical changes to the way we heat and power our existing homes as well as new ones. Whether it be turf on the roof, wind turbines in the garden, heat pumps below the basement, or micro CHP (Combined Heat Power) boilers, the homes of the future will need to be powered in a completely different way. And we need to develop the technology to support our Victorian terraces and sixties tower blocks as well as our modern new homes."
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Consultation/Key Publication Dates
Code for Sustainable Homes Implementation Early 2007
Home Information Packs (HIPs) Regulations:
Revised regulations published 14 June, further revisions required
HIPs Trials November 2006 onwards
HIPs Introduction 1 June 2007
Implementation of new DCLG structure went live 2 October
Planning and Pollution Control Consultation Closes 6 December
DTI/Ofgem Call for Evidence for the Review of Barriers and Incentives to Distributed Electricity Generation - closes 2 January 2007
Part B of Building Regulations:
Document Autumn
Implementation April 2007
Water Regulations Consultation Document Autumn
Full HBF Events Calendar
Review Latest Press statements
Download previous Weekly News Summaries
Joanna Turner and John Slaughter