A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Political News
Stamp duty exceeded £1bn in the second quarter
The Government received just over £1bn in revenue from stamp duty from homes sales in the second quarter of the year, a 30% increase from the first quarter, according to research from Portman Building Society based on Land Registry data. The average amount of stamp duty paid per property was £3,735, significantly higher than the £3,184 in the first quarter of 2005, the last quarter before the thresholds for the tax were increased. (Portman Press Release)
In response to Portman’s study, Shadow Chief Secretary to the Treasury Theresa Villers said: “This is further evidence of how hard Gordon Brown's tax increases are hurting first-time buyers. His stealth taxes are penalising young people trying to get on the property ladder. The increasing stamp duty bill faced by Middle England is just one of the Chancellor's many tax rises to hit hard working families." (Conservative Press Release)
Economic News
Interest rates left unchanged
Following last month’s increase to 4.75%, the Bank of England’s Monetary Policy Committee decided to leave the repo rate unchanged at its September meeting, as had been widely anticipated by market analysts. The majority of commentators are predicting one more 25 basis point increase this year, with the November meeting seen as the most likely time for this rise. (Bank of England Press Release)
Corporate News
Wilson Bowden reports Interim Results
Wilson Bowden reported interim results for the six months to 30 June, with operating profits from David Wilson Homes at £74.2m compared to £90.2m in the same period a year ago, on turnover of £443.3m. The company increased its land bank from 18,269 plots to almost 20,000, and expects a strong second half of the year, with visitor levels rising and reservations per site up 20% from the same period a year ago. (Wilson Bowden Interim Results)
Linden Homes put up for sale
The Financial Times (5 and 6 September) reported that joint owners Chief Executive Philip Davies and Chairman Andrew Sells have put Linden Homes up for sale at an asking price of £300m. (Financial Times)
HBOS backed bid set for McCarthy and Stone buy out
A cash offer for McCarthy and Stone by Mother Bidco, a group involving HBOS, property traders David and Simon Reuben and Scottish Entrepreneur Sir Tom Hunter, of £10.75 per share has been recommended by McCarthy and Stone’s board. A rival bidding Consortium Mars Bidco (which involved Permira and Barclays Capital) announced that it would not increase its offer of £10.30 per share. (Mother Bidco Offer Update 6 September, Financial Times 5 September)
Galliford Try reports full-year results
Galliford Try reported results for the twelve months to 30 June, with profits on housebuilding operations (excluding acquisitions) 14% higher than in the previous year at £35.6m. The company completed 1,054 homes, compared to 853 a year earlier, 75% of which were on brownfield lad. All homes sold in the South East were on brownfield land. Following the acquisition of Chartdale, Galliford Try’s landbank stands at 4,115 units, compared to 2,065 last year. (Galliford Try Annual Results)
Housing Market
House prices rise in August
House prices rose by a seasonally 1.0% in August according to Halifax, taking the annual rate of growth (on a three month average basis) slightly lower to 8.2% down from a recent peak of 9.4% in the second quarter. HBOS offered a fairly upbeat view of the market, describing it as “underpinned by sound fundamentals”.
However Chief Economist Martin Ellis expects the rate of house price inflation to ease: “The further substantial increases in utility bills that have been recently announced are expected to put pressure on householders' finances, curbing housing demand and causing consumer spending growth generally to ease. Higher mortgage rates following the Bank of England's decision to raise official interest rates last month and the increase in fixed rates that has already occurred since the spring are likely to dampen housing demand. These developments, combined with the historically high level of house prices relative to average earnings, are expected to constrain housing demand and moderate house price inflation over the remainder of the year.” (Halifax August House Price Index)
Other News
10th anniversary of buy-to-let mortgages
A Council of Mortgage Lenders (CML) paper to mark the 10th anniversary of the introduction of buy-to-let mortgages highlighted the revolutionary provision of mortgage finance to the private rented sector over the last decade. Over 750,000 such loans were outstanding by mid 2006, valued at £84 bn. The CML believes the outlook for the sector is positive, with demographic changes pointing to an increasing need for private rented accommodation. The largest concern comes from increasing regulation, with the CML urging the Government to “ensure that regulation recognises that most landlords are small businesses with limited resources to keep up with new regulation”. (CML Buy-To-Let Article)
HBF Events
HBF Technical Conference 2006: Codes and Regs – The Way Forward 9 November 2006, Nottingham Belfry Hotel, Nottingham
For those not attending Housebuilding 2006, the HBF Technical conference offers the opportunity to catch up on the technical issues of the moment. This parallel conference will be once again looking at the hot topics of the Code for Sustainable Homes and Building Regulations, and will address any further developments since HB06.
Current speakers are included from the following organisations: DCLG, LABC, HBF, Robust Details ltd.
For further information please contact events@hbmedia.co.uk or 020 7960 1646. To register your place on-line visit www.hbmedia.co.uk
Consultation/Key Publication Dates
Code for Sustainable Homes Implementation Autumn
Home Information Packs (HIPs) Revised regulations 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
HBF Events
HBF Annual Planning Conference 14 September
Housing Market Intelligence 2006 10 October
Housebuilding 2006
Business Design Centre, London N1 10 &11 October 2006
For a full list of HBF events please visit HBF Events & Meetings
For details of HB Media events click here
Paul Samter
Senior Analyst - Economic and Policy 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 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)