A weekly news summary covering all aspects of the housebuilding industry from Pierre Williams, HBF's head of media, available to members only.
HBF Warns Government Not to Rig Land Market
HBF has warned the Barker Review not to cut housebuilders out of the bidding process for public land and favour quangos or public regeneration bodies instead. It follows last weeks news that English Partnerships bought up a prime RAF site in Bracknell, Berks, without going through a formal tendering process. In its second submission to the Barker Review, HBF says: The reforms could be interpreted as leading to some form of land nationalisation, so the public sector could give land to favoured developers, whether housebuilders, commercial developers or RSLs. Pierre Williams for HBF, said: We want equal competition between all those providing housing, with each sector treated fairly. (Building)
Supply Still Lagging Behind Demand
The Government has lauded a moderate increase in housebuilding, with starts up 10% in the fourth quarter if 2003 compared with the same period in 2002 and completions up 8%. However, HBF said the improvement was illusory given that household growth was still growing at 215,000 per annum compared to housing completions of just 137,000. (FT)
Council Tax to be Replaced with Income/Property Tax Hybrid
A local income tax and a property charge will replace Council Tax as the government tries to fend off growing criticism at the scale of Council Tax increases in recent years. A Government review of local government finance will announce its conclusions in early summer and the new system could be implemented in four years time. The new system, which is an attempt to create a fairer system for poorer homeowners, has been branded as half-baked by opposition. (All media)
First Time Buyers Stage a Comeback
First time buyers are back according to Rightmove. The survey said 16% of sales were to FTBs, a big leap up from Novembers low of 6% but still well down from their 20 25% norm, and it said average prices had increased by 2%. Estate agents say the number of buyers has risen 27% since the beginning of the year, with new instructions and sales also up 15% in January. At the same time, according to the Rics, many people have put their properties on the market as fears of a possible price slump have started to spread. (Mail, Independent, Telegraph)
Higher Interest Rates Likely
The governor of the Bank of England has made it clear that higher interest rates are on the cards after giving an upbeat assessment of economic growth and warning of the prospect of higher inflation. Mervyn King said the country would be experiencing near-boom conditions for the next two years and suggested rates might climb to 4.75% by late 2005 a situation that the Bank expects would bring house price growth down to zero. (Times, Mail)
Flood Barriers Prove Their Worth
House prices in a riverside town have risen 20% since new flood barriers were installed. Home owners along the Severn in Bewdley, had been flooded many times in recent years. But after the completion of a 4m defence system stopped the river bursting its banks last week, local estate agents say prices have leapt 20%. (Telegraph)
More Criticism of Super Mortgages
First time buyers are being encouraged to take out mortgages of up to 10 times their salary, according to the Evening Standard. The newspaper tested various lenders and said that virtually all had ditched their standard lending limits in the wake of last years catastrophic collapse in the number of first time buyers. Meanwhile the Yorkshire Building Society said self-certification mortgages were an accident waiting to happen and called on the Financial Services Authority to bring in tougher rules on these mortgages when it starts policing home loans in October. (Standard, Guardian)
Prescott Plots Northern Supercity
John Prescott intends to step up the pressure to make his M62 growth corridor succeed after the fiasco of his 10-year transport plan. The Deputy Prime Minister has employed a team of academics, architects and designers to draw up plans for the extended metropolis of Manchester, Leeds and Humberside which he wants to see operate as a single economic unit of 15m people to compete with London. (Sunday Times)
Buy Old Pay More
Housebuyers can expect to spend 2,500 on unexpected repairs within a year of moving. Windows are the single biggest cost, followed by old boilers, dodgy plasterwork, poor roofing and insufficient insulation. The Energy Savings Trust, which carried out the study, said few buyers took these problems and costs into account when deciding to buy. (Express)
US-style Mortgages on Offer
GMAC, the mortgage-lending arm of General Motors, has launched a 25-year fixed rate mortgage in the UK, offering to lend up to five times income. The rate is fixed at 5.95%. Borrowers will have the choice of taking 100% of the loan at fixed rate or mixing it with a variable rate of 0.75% above the Bank of Englands base rate. The greater the proportion of the loan on the variable rate, the less you can borrow. (Telegraph)
HBF Note: This must be seen as a success for the Chancellor after he called for long-term fixed rate mortgages, as well as an increase in housing supply to achieve market stability. However, it remains to be seen whether this type of mortgage will prove popular.