A weekly news summary covering all aspects of the housebuilding industry from Pierre Williams, HBF's head of media, available to members only.
House Prices Rocketing Once More
House prices surged again in April according to both Halifax and the Nationwide. The building society claimed average prices rose 2.1% over the month - more than 100 a day - whilst the Halifax put the rise at a slightly more moderate 1.8%. If correct, these figures push annual price rises to almost 19% - the highest level since June last year. Meanwhile, approvals for new home loans have also hit their highest level for almost two years, according to the latest bank data. The rise has sparked more warnings of a crash in future, with the National Institute of Economic and Social Research saying there is now an evens chance of a crash within two years. (All media)
Barker Attacks English Partnerships Development Role
Kate Barker has attacked the governments decision to give English Partnerships the lead role in developing surplus public sector land. She told a urban regeneration conference: I am slightly concerned by the tendency of the government to think that EP is the way to get the goods for the public sector. I am not convinced that having to go through EP is going to be efficient. She went on to urge government to think of more innovative ways of involving the private sector in bringing forward sites rather than EP. Barker also expressed her irritation that government had already published its Planning Bill before she was asked to carry out her review of housing supply. (Times, trade press)
HBF Note: A timely observation by Barker given last weeks diktat by government that EP would be charged with developing/disposing of 1,650 hectares of ex-NHS sites.
Bank Raises Base Rates Again
Mortgage lending at a record levels, a resurgence in High Street sales and a manufacturing revival all left the Bank of England with little choice but to raise base rates by 0.25% to 4.25% today. This triple whammy of buoyant economic indicators all point to more rate rises ahead. Most analysts expect they will climb to about 5% within 12 months and could reach 5.5% by the end of next year. (All media)
Prescott to Bulldoze Through 200,000 Extra Homes
John Prescott has started to push through his plans for 200,000 extra homes by 2016 in the Midlands and South East. A new urban development body is being set up to oversee growth and assume responsibility for development control in Milton Keynes and the south Midlands. The Government has also said it expects to set up another UDC later this month for another part of the growth area covering Northampton, Towcester and Daventry. The CPRE has reacted as expected. Its planning spokesman Henry Oliver, said: People are beginning to wake up to the fact that the Governments Sustainable Communities Plan is overriding local planning authorities and bulldozing everything through. (Telegraph)
Prescott Plans Huge Schemes
In an effort to kick-start major regeneration schemes, the Government is considering granting planning permission for up to 15,000 homes a time to individual housebuilders. The first looks likely to be in the Thames Gateway and Bellway is well-placed to take advantage of this given its joint venture with EP at Barking Reach. These large schemes is increasingly being seen as necessary to provide the incentive to get modern methods of construction underway. (Sunday Telegraph)
HBF Note: There is some question as to whether this story is in fact news. Further investigation is underway.
Tories Jump Aboard Nimby Bandwagon
The Conservatives have leapt on Prescotts push for new housing to claim the government is concreting over the countryside. Michael Howard, speaking from Ashford in Kent, said: Welcome to what John Prescott calls an urban growth area. If he has his way this beautiful countryside at the heart of the Garden of England will become almost as ugly as those words of the Deputy Prime Minister.
HBF Note: Disappointing that the Tories should go for such an overt piece of political theatre. But in reality, their policies on housing are not yet formed. In all probability, if they are returned to power, they are likely to adopt a more realistic and pragmatic approach.
Wilson Bowden Buoyant
Wilson Bowden has announced excellent results with reservations up 50% in the year to date and selling prices up 10% per square foot. Chairman David Wilson told shareholders that trading had continued well with forward sales strong and healthy. The company added that it would be disappointed to see any deterioration on its margins which stood at 21.4% for 2003. Investors reacted in typical fashion to the excellent news - the share price slid 20p to 10.95. (FT, Express)
Bank of England Criticises Buy-to-Let
The buy-to-let craze is starving small firms of investment capital, the Bank of England has warned. In a study of business start-ups, the Bank blamed a growing trend for rich individuals to ignore entrepreneurs and opt for investment in rental properties instead. Investment in start-ups has fallen for the fourth consecutive year while the number of buy-to-let mortgages secured by individuals has leapt from 28,000 in 1998 to 408,000 last year. (Times)
Generation Piled Under the Same Roof
Extended families of three generations are becoming more common as financial pressures mount. Soaring house prices and student debt for the young combine with pension under-funding and the soaring cost of residential care homes for the elderly. Building society research into the situation concludes that these extended financial families (EFFs) will increase from an estimated 75,000 today to 200,000 in the next 20 years. Although still a small proportion of the total number of households, EFFs are likely to become an important niche market accounting for one in 50 households in 10 years time and one in 25 in 20 years. (Times)