A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Government News
Queens Speech announces Government legislative programme
The Queen's speech on Wednesday saw the announcement of the Government’s legislative programme for the coming 12 months. HBF will be focusing on a number of Bills and Papers that will or could impact on the home building industry notably: -
Climate Change Bill
One of the key note measures will be a Climate Change Bill, will give statutory force to the Government’s targets for cutting emissions by 60% by 2050 and establish a Carbon Committee that will advise the Government in reducing emissions and develop improved monitoring and reporting arrangements.
Commenting on the Bill the Confederation of British Industry (CBI) has said: “The CBI supports the Bill to tackle climate change and will now work to ensure that the resulting policy framework is effective without undermining the UK’s competitiveness”
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Whilst the CPRE have called for strengthening of planning laws:
“We welcome new long-term targets for the reduction of global warming emissions and actions to address climate change which are promised for the Bill. And we look forward to the publication of the Draft Planning Policy Statement on Climate Change for consultation in December. The Government should promote patterns of development which reduce our energy needs, so the emissions associated with all proposed development must be considered”
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Energy White Paper
The Queen’s speech also announced that an Energy White Paper will be published in March 2007, which will incorporate the recommendations of the Energy Review, published in July 2006. This will include energy-saving measures, aimed at both new and existing housing, as well as commitment to introducing a system of carbon-pricing.
The Energy Review recommendations included the suggestion that Level 5 of the Code for Sustainable Homes should be carbon-neutral, and moves to simplify and improve compliance with building regulations.
Planning Reform
The Government has announced that new proposals to further reform the planning system are to be published in spring 2007. This will follow the reports being delivered shortly by Kate Barker and Sir Rod Eddington, who are respectively looking at how the planning system can better deliver economic growth and at the long-term links between transport and productivity. The new proposals are expected to include reform of section 106 agreements and any legislation could include the possible introduction of a Planning-gain Supplement.
Local Government
The Greater London Authority Bill would strengthen the Mayor’s executive powers in a number of important areas. It would give him additional responsibilities relating to staging the 2012 Olympics and the regeneration of the Lower Lea Valley; fulfil his and the Government’s pledge to provide hundreds of thousands of new homes and supporting services; speed up planning decisions; and provide powers to “combat climate change” through strategic waste and environmental strategies.
Regulation of Estate Agents
The Consumer, Estate Agents and Redress Bill would compel all UK estate agents to join a redress scheme and make it easier for customers to seek compensation from rogue agents. If the Bill is passed, the Office of Fair Trading would have its enforcement power expanded when it comes to tackling rogue agents. The Bill would also require estate agents to keep client records which can be inspected by Trading Standards Officers.
The National Association of Estate Agents (NAEA) welcomed the Redress Plans announced in the Queens Speech
Charles Smailes, President at the NAEA, commented: “This is clearly a step in the right direction. It is important for consumers to feel secure in the fact that they will receive some form of compensation if they are unfortunate enough to suffer at the hands of malpractice.
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Full copy of the Queens Speech
Pre-budget Report date announced
HM Treasury has announced in a Written Ministerial Statement that the Chancellor of the Exchequer, Gordon Brown, will deliver his Pre-Budget Report to the House of Commons on:-
Wednesday, December 6 2006 at 12.30pm.
This is the expected occasion for a further announcement on the Planning-gain Supplement.
HBF News
HIPs meeting update
HBF organised a meeting on Thursday to update members on the HIPs legislation and provide a forum for questions and debate. An overview of the current HIPS status was given by Paul Broadhead of AHIPP and details of the dry-run were outlined by Chris O’Dea, Dry-Run Manager, DCLG. Also attending the meeting was Denis Pursehouse, involved in the HIPs policy formulation at DCLG. HBF will be collating the questions arising from the meeting with a view to organising another Government meeting prior to the New Year.
Baseley addresses Yorkshire AGM
Stewart Baseley, Executive Chairman of HBF gave a major speech last night at the HBF Yorkshire AGM to over 200 members. In his address he highlighted the Queens speech, including the announcement of the major new Climate Change Bill which will have far-reaching consequences for the home building industry. He also set out his vision for a new policy framework, whereby the Government sets targets in consultation with the industry, which then has flexibility in how it sets out to achieve them.
Housing Market
DCLG house price index shows 8% annual rate of inflation
Figures from the DCLG house price index have shown annual house price inflation at 8% in September 2006, up from 7.4% in August 2006.
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Assetz reports annual house price growth at 8.7% in October
In the latest Assetz report, key findings were:
Average rate of growth in October was 8.7% annually, up from 8.3% in September
Average price of a home in October was £195,267, up from £194,151 in September
House prices are driven more by supply/demand imbalance than interest rates
Statistics show fall in housing starts and completions
Figures from the DCLG have shown that new housing completions for Q3 2006 were down 1% compared with Q3 2005, with Q3 starts down 9% on Q3 2005.
However, annual completions to September 2006 were up 6% compared with the same period in 2005, with annual starts up 2% for the same period.
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FT reports two-speed housing market
The Financial Times' monthly house price survey has shown London's house prices to be rising at roughly 11% per year, but the rest of the country is lagging well behind.
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…Whilst the NHF highlight north west affordability crisis
A report from the National Housing Federation has shown that average house prices in the north west of England have doubled since 2000. The average price of £138,000 is now over six times the average salary.
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More Housing the key to Midlands growth, say CIH
Launching a joint report with the National Housing Federation, the Chartered Institute of Housing has called for increased housing provision to be the driver of economic growth in the Midlands.
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CML urges the Welsh Assembly to tackle affordability crisis in Wales
Affordable housing is crucial to delivering an efficient and competitive Welsh economy, the Council of Mortgage Lenders said at its annual conference in Cardiff this week.
In the third quarter of 2006, the number of first-time buyers slumped to the second lowest since 1991. Just 4,300 first-time buyers purchased a home between July and September, slightly more than the 4,200 in the same quarter last year. In the third quarter of 1991 - with the housing market firmly in recession - only 3,700 first-time buyers bought a home.
First-time buyers in Wales are now also paying the highest ever income multiples to get their first property - 3.15 times the average income in the third quarter of this year, compared to 3.13 in the second quarter, and 3 times in the same period in 2005. But first-time buyers throughout the UK are also paying higher income multiples, partly because of the long-term decline in borrowing costs.
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Economic News
Inflation under control whilst unemployment rises
Data releases this week show that inflation is under control despite running above target, while there is more evidence of slack in the labour market leading to an easing in take home pay:
The Voca take home pay index showed annual pay inflation easing from 4.2% in September to 3.3% in October, continuing its downward trend since the summer. This may have a dampening impact on household spending, but restrained pay inflation thus far will be welcomed by the Bank of England.
Official labour market statistics show a rise in the unemployment rate to 5.6% in the three months to September, a fall in underlying pay growth and a small fall in the employment rate. Taken at face value, this would indicate a growing margin of slack within the labour market. In the detail, it is noteworthy that the number of people in employment above the retirement age is growing at 11.2%, the highest since the series began in 1993.
Other News
NAEA housing market survey shows first time buyers at highest level for a year and a half
NAEA figures show that first time buyers made a dramatic return to the housing market in October increasing their market share to 16.4% up from 11.1% in September according to the NAEA monthly housing market survey this month.
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AHIPP welcome Law Society backing of HIPS
The Association of Home Information Pack Providers (AHIPP) have welcomed the Law Society's dry run of HIPS, aimed at helping solicitors prepare for their introduction in June next year.
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‘Get Into Construction’ Launched
A new initiative has been launched to promote career opportunities for young people in the construction industry.
‘Get into Construction’ is designed to provide young people, especially those who have struggled at school, are in or are leaving care, are long term unemployed or have been in trouble with the law, with an opportunity to enter the construction industry. The initiative is sponsored by local major construction employers and supported by the Prince’s Trust.
Welcoming the contribution that ‘Get into Construction’ will make towards helping young people build better lives, Minister for Employment and Learning, Maria Eagle said:
“Projects like ‘Get into Construction’ will provide young people with access to pre-apprenticeships and skills development courses which will increase their prospects of employment in the construction industry.
This will in turn assist employers in recruiting and retaining young people who would not normally consider a career in the industry and contribute to building a sustainable local workforce.”
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
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Joanna Turner and John Slaughter