A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
HBF News and Activity
Cooper to address HBF annual lunch
HBF has heard today that Housing and Planning Minister, Yvette Cooper, has agreed to address the HBF's annual AGM lunch on 25 April. Full details will be provided later.
HBF meet new Conservative Housing and Planning Spokesman
HBF Executive Chairman Stewart Baseley and John Slaughter held an initial meeting this week with Michael Gove MP, the new Conservative Party spokesman on housing and planning and close political adviser to David Cameron.
The meeting was an opportunity for HBF to explore the Conservatives' approach following Shadow Chancellor George Osborne's speech to the Property Week Conference on 8 February. Mr Gove confirmed that the Conservatives wanted to look afresh at their position on housing and said he would welcome HBF's involvement in the Conservatives' policy formulation process launched by the new party leadership. He directly sought HBF's views on a number of issues, including affordable housing. He also confirmed his willingness to help resolve current industry concerns about the Special Protection Areas for the Thames Basin Heaths and took on board HBF's concerns about the arrangements for implementing home information packs. In addition, he signalled that the Conservatives saw a case for a new approach to funding local infrastructure requirements associated with development.
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
Inflation Report offers no sign of an imminent rate cut…
The Bank of England’s Monetary Policy Committee’s (MPC) February quarterly Inflation Report hinted that interest rates could remain unchanged for some time. The Committee’s central projection is for GDP growth to pick up to around its historic trend rate, where it is expected to remain over the forecast horizon (the next three years). CPI inflation is forecast to remain close to the 2% target over the next three years. As these projections are modelled on interest rates implied by the financial markets, which have priced in very little change over the next three years, the Report indicates that the MPC does not have a clear intent to change rates in the immediate future. The MPC weighted the risks to the growth projections as marginally to the downside, while the risks to inflation are evenly balanced (February Inflation Report)
… as inflation remains below target…
The target rate of inflation, the Consumer Prices Index (CPI), remained stable at 1.9% in January, although December’s index was revised down by 0.1%. The CPI is now below the centre of the MPC’s range level of 2.0%, +/- 1.0%.
The largest upward influence on the CPI came from transport, with a rise in the price of petrol, compared to a fall in the same period a year earlier and a smaller fall in air fares than in the same period last year. There were downward effects from furniture and furnishings, with sales across a range of items, and financial services, where last year’s rise in overdraft fees was not repeated this year. (CPI Press Release)
… unemployment rises to its highest rate in nearly three years…
The ILO measure of unemployment rose sharply in the final quarter of 2005, with the rate reaching 5.1%, the highest rate since the first quarter of 2003, and up from 4.7% in the third quarter. The claimant-count measure of unemployment fell by 2,000 in January, to leave the rate unchanged at 2.9%. While not a large decline on a historical basis, this is the first time in over a year that the claimant-count has not risen.
Earnings growth remained sluggish in the final quarter of 2005. Earnings including bonuses rose by 3.6% in the three months to December compared to the same period a year earlier, an increase from 3.4% in the three months to November, although considerably lower than the 4.6% seen in the three months to April 2005. (February Labour Market Statistics)
… and retail sales fall
The volume of retail sales fell by a seasonally adjusted 1.3% between December and January, although sales rose by 1.3% in the three months to January compared to the preceding three months, and by 2.6% compared to the same three months a year earlier. This is the fastest rate of sales growth on an annual basis since the first quarter of 2005. (Retail Sales Release)
Political News
Probable commencement dates of sections of Planning & Compulsory Purchase Act announced
The Office of the Deputy Prime Minister announced that the probable commencement dates of various sections of the Planning & Compulsory Purchase Act 2004 will be 6 April and 1 October. For a full list click here.
Budget date announced
HM Treasury announced that Chancellor Gordon Brown will make his Budget Report speech to the House of Commons on 22nd March 2006 at 12.30pm. (HMT Press Release)
Milliband puts emphasis on building new homes
In a speech to the LGA Delivering Sustainable Communities Conference in Birmingham, David Miliband, Minister of Communities and Local Government, highlighted the government’s success on improving the existing housing stock and the shift in the emphasis to building new homes. He said: “We are talking less about how to get existing homes up to a decent standard, and more about creating a supply of new homes. Instead of 2.1 million homes below the decent homes standard, £13 billion of public funds and over £5 billion of private money has halved that number. And now, just 10% of the legacy of non-Decent Homes we inherited remain outside of the decent homes programme.” (Full text of Miliband's speech)
Housing Market
Official figures show pick up in house price inflation…
The Office of the Deputy Prime Minister (ODPM) reported a pick up in the annual rate of house price inflation in December to 2.9%, up from 2.2% in November. The ODPM index did show a marginal decline in prices from November to December, but as this index is not seasonally adjusted, little can be read into this. London saw the sharpest pick up in annual price growth of any region from 1.5% in November to 3.8% in December, while the East and South West saw prices down slightly in comparison to a year ago. (ODPM House Price Index Release)
… while estate agents also report a rise in prices
After fifteen months of reporting declines, estate agents reported a rise in prices for the third successive month in January, according to the Royal Institution of Chartered Surveyors’ (RICS) Housing Market Survey. RICS also reported that the number of buyer enquiries rose for the eighth successive month (a record for the survey) and although there was a small rise in the number of properties put up for sale, this “has not matched the increase in sales, helping to improve the position of sellers.” (RICS Housing Market Survey)
Buy-to-let lending picks up and first time buyer levels pick up
A record 130,400 loans were advanced by buy-to-let lenders in the second half of 2005, a 39% increase from the first half of the year, according to the Council for Mortgage Lenders (CML). A total of £14.6 bn was advanced in the six month period, 47% more than in the first half. The total outstanding number of buy-to-let mortgages rose to 701,900 loans, with £73.4 bn outstanding, 8% of the mortgage market. Concurrently, the proportion of buy-to-let loans in arrears for three months or more fell from 0.70% to 0.68%, below the total mortgage market level of 0.88%.
CML Director General Michael Coogan commented: "There was a notable pick-up in the buy-to-let sector in the second half of last year, so that lending in 2005 modestly exceeded the year before. In the wider mortgage market, we saw an 18% fall in the number of loans for house purchase last year, so the strong buy-to-let data may partly reflect increased demand for rental property. Despite slowing house prices last year, residential property remains a popular investment, and this is set to continue in 2006." (CML Buy-to-let Statistics)
The CML also revealed a slight pick up in the share of loans accounted for by first-time buyers (FTB) in the fourth quarter. The CML has changed the method with which it calculates the FTB share, so data prior to the second quarter of 2005 is not comparable to the most recent figures. FTBs share of the number of loans edged up from 37% in the third quarter to 38% in the fourth, and the total number of loans rose by 4.6% over the same period. (New CML Mortgage Statistics)
Other News
New web service to keep industry up to date on environmental regulations
The industry can now be kept up to date on the latest environmental legislation through a free web service, NetRegs, a joint initiative of the Environment Agency in England and Wales, the Scottish Environment Protection Agency and the Environment and Heritage Service (Northern Ireland). By registering on www.netregs.gov.uk companies can receive free email updates on environmental issues affecting them.
Private housing starts fell slightly in 2005, while completions rose
The Office of the Deputy Prime Minister’s (ODPM) house building statistics showed that the number of private housing starts in England in 2005 was marginally down (-0.8%) from the previous year at 161,100, although the 2004 figure was up 10.2% on 2003. The private sector completed 142,000 homes in 2005, up 4.1% from 2004 and the highest number of new homes built by the private sector in England since 1989. There was an 11.3% rise in the number of starts by the public sector and a 5.7% increase in the number of completions, meaning that total starts (i.e. private and public sector) starts rose 0.2% and total completions rose by 4.3%. (Q4 House Building Statistics)
Stampede for Redrow’s affordable homes in Bristol
First time buyers queued for up to eight hours to secure an affordable home before planning permission has been granted on a site in Filton, Bristol. Highlighting the scarcity of affordable housing, 350 people waited in line to ensure they did not miss out on one of the 106 new homes priced at £60,000 to £130,000. Each paid a £50 holding fee and will now await a council decision on the planning application, expected in April.
Redrow, which offered the properties, said that local employers had complained that they had trouble retaining staff because of the high cost of housing in the area. Rachael Baillie, sales director at Redrow’s South West branch said: "We held an exhibition evening, which was supposed to be a chance for people to view our plans and for us to gauge the likely interest. Instead we had people practically fighting to buy the properties. We could have sold them all twice over." (The Times)
Rightmove asks customers to buy a stake
Estate agents and property developers will be invited to invest up to £30 million in the planned flotation of property listings website Rightmove.
Advisors hope this will attract a valuation of about £300 million to £400 million. Group managing director, Ed Williams wrote to all of its 11,000 customers including several new home builders, inviting them to invest up to £3,000 each.
The letter invites customers to register their interest by midday on February 17. The offer is only open to the owners of each of the 8,500 branches and 950 lettings agents registered with Rightmove, or the developers behind each of the 1,500 new home developments advertised on the site. Owners of multiple developments or chains of estate agents will be allowed to apply for £3,000 worth of shares for each branch or development. (Financial Times)
Consultation/Key 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
Implementation: 1 October
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
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
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