A weekly news summary covering all aspects of the housebuilding industry from Pierre Williams, HBF's head of media, available to members only.
Legislation Threatened on Empty Homes
In an attempt to stave of criticism of a lack of progress in tackling housing supply, the Government has warned it is on the cusp of forcing the owners of empty homes to release them for affordable renting. The new law would enable councils to take over management of long-term empty homes, make necessary repairs and hand them over to housing associations. Once the cost of repairs had been recovered from rents, the property would revert to the owner. Of an estimated 718,000 empty homes in England, 308,000 have been vacant for six months or more. Housing Minister Keith Hill, said: I consider there is a strong case to legislate on empty homes. (FT)
Land Registry Confirms New Price Surge
Recent claims of a new surge in house prices by lenders indices have been confirmed by more robust figures from the Land Registry. It put annual price rises for the first quarter at 14.1%. According to the Registry this means the average house price for England and Wales is 166,404. However, to confuse the picture, John Prescotts department, which also carries out a house price survey, said its own figures pointed to a much lower rate of increase of just 7.8% for the year to March. (FT, Guardian)
Builders Failing on Safety Targets
Construction is by far the most dangerous industry to work for and is failing to clean up its act according to an official report from the National Audit Office. Three years ago the industry set itself a target to reduce accidents and deaths by 40% next year and 66% by 2010. So far it has achieved a reduction of only 5%. In 2002-3, construction accounted for 71 of the 226 people killed at work while a further 4,780 construction workers were seriously injured - three times the average for main industry sectors. The National Audit Office blamed the failure on public bodies choosing construction projects on the basis of lowest price rather than whole-life costs that take health and safety into account. (FT)
Buy-to-Let Investors Switch to Commercial
Property investors, flush with cash from residential buy-to-let successes, are increasingly switching to commercial property as concerns mount about a possible slow down or crash in housing. According to an Rics survey, the share of private individuals investing in commercial property has increased from 2% to 10% since 2000. This news is likely to be seized on by government as a good omen for its proposed property investment funds (Pifs) that, Gordon Brown has signalled, may be introduced as early as next year. (FT)
Bank Indicates Sharp Fall in House Price Rises
The Bank of England has issued a further warning of interest rate rises to come and its Governor Mervyn King has made his clearest statement yet that house price rises are set to fall sharply. With inflation predicted to rise above its 2% target, the Bank will be forced to increase rates, probably to just under 5% by the end of the year. It also forecast that house price rises would slow to around zero within two years. (FT, Times, Guardian)
HBF Note: A steady upward creep of interest rates is almost assured in the hope this will calm house price rises without sparking a collapse. The FT likens this to bringing frogs to the boil slowly in the hope they wont jump. The flip side of course is that the water temperature increases so slowly that the frogs dont notice.
Persimmon Attacked for Undersized Flat
Following the case of Persimmon City Developments being prosecuted for property misdescription, the issue of buying off-plan has come under some media scrutiny. During a radio interview, builder and newspaper columnist Jeff Howell, said those buying off-plan had no idea what they were paying for and little recourse when problems arose. Responding, Pierre Williams for HBF said that in this isolated case the company had acted fairly by offering the buyers a full refund plus costs. Also, given that the buyers had proved that the flat they bought did not match up to the specification agreed, the notion that they had no idea what they were buying was nonsense. (BBC Radio 4)
Schoolchildren of 14 to Have Two Days a Week to Learn Trades
Pupils from 14 years of age will be allowed two days a week to learn a skilled trade, the Government has announced. However, whilst they can apply for apprenticeships in jobs such as graphic design, car mechanics or secretarial work, plumbing and carpentry are not on the menu. The scheme will also be rather low key to start with just 1,000 places on offer. (Mail)