A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
POLITICAL NEWS
Government takes more time to ponder EP - Housing Corporation Merger
In one of a raft of Government announcements made before Parliament went into recess on 25 July, Secretary of State for Communities and Local Government, Ruth Kelly, said that she had decided to extend the timetable of the housing and regeneration review. Ms Kelly said she had asked officials to undertake further work in three areas - the scope for rationalising the relevant DCLG delivery functions as well as those of EP and the Housing Corporation, modernising the regulation of affordable housing "particularly in the light of the increasing involvement of the private sector" and a look at "the range of potential modernisation and structural options for reform". While the merger of EP and the Housing Corporation remains an option, it is not the only option under consideration. A further announcement is promised for the autumn.
Government consult on housing and planning incentives
The Government have announced a consultation on housing and planning incentives. The DCLG’s consultation paper sets out principles and potential options that the Government could use to develop a new housing and planning delivery grant. The paper canvasses a range of potential elements that could feature in the design of a housing and planning delivery scheme. The consultation closes on 17 October. The Goivernment is also consulting on changes to the existing planning delivery grant.
Housing and Planning Minister, Yvette Cooper commented: “We need new homes for the next generation, but councils with high levels of demand also need more support and more incentives to meet local needs. Local authorities who are planning for the homes their communities need should benefit as a result. This consultation will give councils the opportunity to give their views on proposals which would give them extra investment to help deliver more new housing.”
<http://www.communities.gov.uk/index.asp?id=1501735>
HBF Comment: Executive Chairman Stewart Baseley said, "HBF warmly welcomes this move by the Government to support local authorities seeking to improve housing delivery in their areas. It is imperative that local authorities have the right incentives to respond to housing pressures, particularly in the light of increasing affordability problems for first-time buyers. Communities around the country face housing challenges unique to their area, to which local authorities must have the scope and encouragement to respond in a tailored way to promote economic and social success."
Government announces forthcoming consultation on water efficiency
The DCLG Minister responsible for building regulations, Angela Smith, announced that DCLG and DEFRA would launch a joint consultation on regulations to promote water efficiency. Her statement said the two Departments “will be jointly consulting on ways of making water efficiency mandatory, during the recess. The scope of the consultation will cover water efficiency in new homes, existing buildings and in respect of the domestic uses of non-household buildings. We are considering a range of measures including amendments to the Building Regulations 2000. There will be a slightly longer consultation than normal-four months rather than three-as we recognised the difficulty of consulting during a holiday period.” Detailed proposals have yet to be released.
HBF Comment: Executive Chairman Stewart Baseley commented,
"HBF welcomes the announcement of this consultation. Home builders are already working hard to improve the water efficiency of new build, but also recognise that further strides in this direction are needed.
“We welcome both the announcement of a longer consultation period and the focus on existing stock as well as new build. The practicality of the Government’s proposals will need to be assessed when published, and we look forward to making our own constructive suggestions for consideration. Given the poorer efficiency of existing homes compared with new homes, it is important to ensure they make their appropriate contribution to the overall objective."
Conservatives to fight 'garden grabbing' by developers
The Sunday Telegraph reported that Conservative Party leader David Cameron will start a "save our gardens" campaign this summer, making it Tory policy to end classification of gardens as brownfield land. The Conservatives recently used one of their Opposition Day debates to raise this issue which, judging by that debate, clearly features as a constituency concern in many areas.
HBF draws attention to risks of policies frustrating housing delivery
In a published letter of 27 July responding to a Daily Telegraph article on this subject, HBF Executive Chairman Stewart Baseley wrote:
“SIR - Rachel Sylvester (Comment, July 25) is quite right to point out that "there is growing evidence that policies devised in Whitehall are making it increasingly difficult for the Government's own targets on housing to be met''.
Home builders are operating under a growing number of initiatives, policies and regulations. These can often carry disproportionate risks to the proper functioning of the housing market - as the debate over Home Information Packs shows. Cumulatively, they certainly threaten the ability of home builders to increase the rate of home building.
Home builders are forging substantial progress on critical issues such as energy efficiency, customer satisfaction and design. The industry now needs room - both regulatory and physical - to build homes that people so desperately need.”
ECONOMIC NEWS
NAEA report market holds steady during holiday period
Survey results in June from the National Association of Estate Agents (NAEA) revealed continued stability in the housing market. Both sales agreed and houses available were consistent with those reported in May. The number of buyers on estate agents books fell slightly, but this did not appear to have any immediate effect on the market. The time taken to sell increased, but the difference between selling price and asking price continued to fall steadily. The survey also revealed a renewed strength in the lettings market.
NAEA also report “the first time buyer share of the market slipped back slightly in June after its dramatic increase in May. They took 12.5 per cent of the market in May, and 11.9 per cent share of the market in June. This compares to just 7.8 per cent in June 2005 and 28 per cent five years ago in June 2001. The lack of increase of interest rates has been a successful in bringing the foundation level of the housing market back. However it is clear that more needs to be done to encourage this sector of the market back to full strength and successfully underpin the market.”
CBI report retailers fear drop in sales growth
The latest CBI Distributive Trades Survey showed that retail sales
continued to rise over the year to July. However growth was both lower than
expected and lower than in June. Food and drink and electrical goods
retailers enjoyed brisk sales growth over the first half of July. However,
DIY, furniture and carpet stores were among sectors that fared less well.
Meanwhile wholesalers recorded stable volumes whilst motor traders
experienced an unexpected pickup. Looking ahead, retailers expect sales
growth to moderate in August, and wholesalers expect sales to grow
modestly.
CORPORATE NEWS
Wimpey agrees deal for provision of 1000 affordable homes
The Housing Corporation announced that George Wimpey has agreed the final terms on a contract to secure funding from the Housing Corporation to build subsidised affordable homes in England. The funding award of an initial £31.73m represents the largest award to a house builder under the Corporation’s current national investment programme.
Housing Corporation Chief Executive, Jon Rouse, said, “From a standing start a little over a year ago, we have successfully created a new market in the supply of affordable housing. This builds on the successful track record of housing associations in providing good quality housing - while drawing on new sources of expertise and innovation in the commercial sector.” housingcorp.gov.uk
OTHER NEWS
First-time buyers face deposit shortfall
Despite planning to spend two years saving for their deposit, first time buyers will face a potential shortfall of over £5,000 each, according to a report from Alliance & Leicester Mortgages. The Alliance & Leicester Mortgages study looks at how much and for how long first time buyers plan to save for their deposit. On average they want to save a deposit of £11,710 - about eight per cent of the average first time buyer house price. However when it comes to saving, they are looking to put away £270 a month for two years, which with interest gives them over £6,570. This leaves them with a £5,140 shortfall from their ideal target. Richard Taylor, Head of Mortgages at Alliance & Leicester commented: “There is a clear mismatch between how much, and for how long first time buyers are willing to save, and their ideal target deposit to buy their first property.” alliance-leicester-group.co.uk
Housing wealth still increasing
The Office for National Statistics announced that the total value of the country at the end of 2005 was £6.01 trillion. Housing continued to hold most of the country's wealth, totalling £3.58 trillion, a rise of 4% from 2004. In 2005, housing represented 59.5% of the UK's total wealth, up 1.3% on the year and significantly above the peak of 53% hit in 1987. (The Guardian, 25 July)
CPRE and National Housing Federation forge rural housing alliance
The CPRE and the National Housing Federation have joined forces to call for an increase in the provision of affordable housing in rural areas. The two organisations have published a joint Charter: Protect Rural England: Build an Affordable Home.
The organisations’ chief executives jointly declared: 'If Government creates the right conditions then housing associations and CPRE local branches can work together in market towns and villages across England to develop well designed, appropriately sited affordable homes to meet local needs.
'Together our organisations are ready to help find the solutions needed to make sure rural England remains a vibrant, sustainable place to live. And not somewhere where our young people are forced to move away, leaving many places in rural England as simply dormitories for commuters and second home owners.'
Housing density rises fourfold in the capital
The Daily Telegraph reported that the density of new housing in London has almost quadrupled in the past three years, with some developments exceeding density guidelines.
A study by CB Richard Ellis Hamptons International found the average density of approved new housing schemes in the capital has increased from 290 habitable rooms per hectare (hrh) in 2003 to 1,054 hrh this year. This is related to housing development planned in association with the 2012 Olympic Games.
London Mayor seeks partner for 'zero carbon' development
Mayor of London, Ken Livingstone, confirmed that he is planning London’s first zero carbon development and that he is seeking a development partner to work with him and the London Development Agency to take the project forward.
The London Development Agency has selected a three acre site at Gallions Park in the Albert Docks in the Thames Gateway. The chosen partner will build 200 high quality new homes that incorporate the best of modern construction and energy technology to ensure the development produces virtually zero carbon emissions. The expectation is that the standard set for Gallions Park will be applied to other housing sites in the Albert Docks. The Mayor commented: `This development aims to demonstrate that 'zero carbon' developments can be commercially and financially viable in the UK. To tackle climate change we have to ensure that all new developments are both designed to be as energy efficient as possible and generate as much energy as possible from renewable sources.”
<http://www.london.gov.uk/view_press_release.jsp?releaseid=8728>
TCPA report increase in authorities seeking on-site generation
A new survey by the Town and Country Planning Association (TCPA) has revealed an increase in on-site renewable energy policies being developed by local authorities.
Key findings in the TCPA survey show that more than 171 local authorities are working up policies to require developers to generate energy on-site in new developments. So far 80 councils have developed target-led policies in line with the ‘Merton Rule’, which was pioneered by the London Borough of Merton. - an approach requiring 10 per cent of energy demand in new developments over a certain size to be met through on-site renewable sources. The TCPA state it is expected that 100 such target-setting councils could create an annual market for micro-renewable technologies worth around £650 million (as compared with the current market of £30 million). tcpa.org.uk
Housing Market Intelligence 2006
October 10, Business Design Centre London N1
Now in its fourth year, Housing Market Intelligence has been tracking and predicting the trends and opportunities in housebuilding through one of the most dynamic periods of change and uncertainty in the industry’s history.
This year HMI aims to help delegates and readers in ‘building profits in housebuilding with greater certainty’.
The Conference will be chaired by NHBC Chief Executive Imtiaz Farookhi. The line-up of speakers includes:
John Callcutt, English Partnerships
Stewart Baseley, HBF
Richard Donnell, Hometrack
John Stewart, HBF
Professor Melanie Howard, Future Foundation
Yolande Barnes, Savills
Christopher Hill, ABN, Amro
For further details please email events@hbmedia.co.uk or call the Events team on T: 020 7960 1646
Consultation/Key Publication Dates
Code for Sustainable Homes Implementation Autumn
Home Information Packs (HIPs) Revised Regulations published 14 June
HIPs - 10 to 12 planned trials Autumn 2006
HIPs Introduction 1 June 2007
Consultation on DCLG structure June 2006
Implementation of new DCLG structure September 2006
Housing and Regeneration Review Extended to autumn
Housing and planning incentives To 17 October
HBF Events
HBF Annual Planning Conference 14 September
Housing market Intelligence 2006 10 October
For a full list of HBF events please visit HBF Events & Meetings
For details of HB Media events click here
John Slaughter
Director of External Affairs
Home Builders Federation
Housebuilding 2006
10 and 11 October 2006, Business Design Centre, London N1
Now in its third year the exhibition, housing market intelligence conference, management conference programme, free briefings and the Housebuilding Innovation Awards bring together all that is new in the housebuilding industry.
Visit http://www.housebuilding2006.com/ for more information.
Pre-register today to be entered in to a prize draw to win two trips to the Ashes Down Under (match tickets, flights and accommodation)