A weekly news summary covering all aspects of the housebuilding industry from Pierre Williams, HBF's head of media, available to members only.
House price growth at lowest for nine months
The Nationwide has produced the latest figures suggesting a further slowing down in the market. It said prices rose 0.7% in January - less than half Decembers rate - and takes the annual rate of growth down to 14.3%. More worryingly, total sales for 2003 stood at 1.39m - the lowest since 1998. The building society said it expected further easing of price rises in the first half of the year, but was unwilling to provide a longer-term forecast. (Express)
Plans for regional assemblies mired in inertia
The governments devolution project is mired in inertia, with poor prospects for Englands northern regional assemblies and Welsh hopes of greater autonomy unlikely to be realised, according to constitutional experts. The annual State of the Nation report says forthcoming referendums on reform will be hamstrung by politicians pretending assemblies can make a difference when they will have little real power. (FT)
Construction suffers severe skills shortage
Construction suffers the second highest skills shortage of any industry sector, with 38% of all job vacancies a result of the difficulty in finding skilled trades. More than half of all construction firms say this shortage causes customer service difficulties, and an increased workload on existing staff, whilst loss of business and delays in introducing new products are also a real problem. Responding to the report from the Learning and Skills Council, the government admitted there is a real problem but made it clear it expected business to pick up more of the costs of improving training. (FT, Times)
Prescott launches northern growth corridor
John Prescott will today announce a Communities Plan update, detailing plans for a northern growth corridor and backing this up with the distribution of millions of pounds of housing renewal money for the North-West, Yorkshire and Humber and the North-East. The update is, in part, a response to claims that Prescott has concentrated funding on the South-East. Prescott wants the three relevant regional development agencies to work more closely in developing the concept of the growth corridor, which approximately follows the M62. However, the scheme has its critics, including the former Leader of Manchester City Council, Graham Stringer MP, who wants fairer distribution of spending, but without the regional assemblies that are commonly regarded as powerless talking shops. (FT)
Rate rise a near certainty
Interest rates are almost certain to rise a quarter point this week after the CBI accepted that strong economic growth rendered its earlier protests against a rise no longer relevant. However, there is still strong pressure to limit the rise to just 0.25% - rather than the 0.5% that some fear the Bank of England is thinking about. (All media)
Devon affordable homes quota under fire
HBF has attacked South Hams District Councils plan to force developers to deliver 50% affordable housing from May. Pierre Williams for HBF, said: A very large part of why homes are not affordable is that there are simply not enough of them, because local authorities are restricting planning permission for new homes. The council insisted it had done viability work on its plans that showed its new demands could work. (BBC)
Crest on firm foundations
Crest Nicholsons strategy shift to urban regenerator and affordable housing provider has not harmed its balance sheet. Reporting pre-tax profits 18% up on the year to 74.6m, the firm sees opportunity in responding to government policy shift. Its move towards the lower-priced end of the market and a more generalised drift away from the South-East, also appears to have paid off. (Independent)
Lenders show little interest in long-term fixed-rates
Britains biggest mortgage lenders have told the Treasury they are not convinced they will be able to persuade home buyers to switch to long-term, fixed-rate mortgages. The Council of Mortgage Lenders believes such mortgages will remain a 'niche' market for the foreseeable future - a clear blow to the Chancellor who in addition to the Barker Review on housing supply, also commissioned a report to examine long-term fixed rates in order to help house price stability and aid entry into the euro. (Trade press)
First homes only bought by better off"
Buying a first home is now the preserve of the better off, the Nationwide has stated. With a doubling of average prices over the past five years, millions earning the average salary of 25,000 cannot afford to take the first step onto the property ladder. In London, the average deposit is now 40,000 and the situation is unlikely to improve, says the building society. Whilst sceptics point out that the price/earnings ratio is at a record high of 7.2 - higher than at the end of the eighties boom - the Nationwide says this distorts the true picture as only the rich are now buying. This means the true ratio is much lower and, as a result, the risk of a crash also much reduced. (Telegraph)
HBF Note: Nationwides claim that richer buyers are reducing the risk of a market fall has yet to be tested. However, new figures from the CML, which show repossessions are at a 20-year low of 7,500 pa, certainly add weight to the Nationwides argument.
Fairviews Rialto takeover
Fairview New Homes has signed a deal to buy Rialto. Acquisition of the 60m Hertfordshire-based firm gives Fairview nine developments with planning permission and a further two as yet unready sites. Rialto will continue to be headed by managing director Stephen Potter and will remain based at head office in Bayfordbury. Fairview is reviewing potential overlaps but has yet to make any decision on redundancies. (EG)
Browns budget deficit encourages new tax speculation
Gordon Browns 13bn deficit in public finances has prompted fresh speculation on what he might do to fill the hole. The Institute for Fiscal Studies has looked at the various options and concluded that more tax on housing is still an attractive possibility for the Chancellor. VAT on new homes is still a possibility, but a far more likely proposition is a further increase in National Insurance contributions and a possible rise in Stamp Duty. (Mail)