A weekly news summary covering all aspects of the housebuilding industry from Pierre Williams, HBF's head of media, available to members only.
Housing Shortage A Myth Says CPRE
There is no shortage of housing in England according to a report commissioned by the Council for the Protection of Rural England. The study, carried out by the consultancy Europe Economics, claims that Kate Barkers review on housing supply is flawed as its findings do not include 2001 census results showing the population of England and Wales is nearly one million fewer than previously thought. As a result, there is a surplus of dwellings over households. This, according to CPRE, means that government plans for more housing in the South East are also wrong. The report claims the recent surge in prices is down to growing affluence and low interest rates. Neil Sinden, for CPRE, said: As we await the final report of the Barker review, it is critical that the government takes note of the findings of this research. Pierre Williams for HBF dismissed the report itself as hopelessly flawed. (All media)
HBF Note: Desperate stuff from CPRE. Its census claims are correct but this only indicates that matters are not at this moment quite as bad as they will be in future. Their claims rubbish all those who have studied the subject in much greater depth and who in the main have no vested interest in claiming undersupply or not. These include ODPM, Treasury, Barker, JRF and Shelter, as well as HBF. In any event, with household formations at 230,000 per year and completions at 170,000, if were not in crisis now, we soon will be.
Housing Crisis Cannot Be Ignored
The Government has again promised that increasing housing supply is a national priority. The latest statement preceded a report published this week claiming an extra 50,000 homes a year are needed to help people on lower incomes. This report, commissioned by Shelter and carried out by Cambridge University, says the government will need to spend 3.5bn a year to solve the housing problem. Without the money, the South Easts economy will suffer from an increasing shortage of public sector workers. (All media)
Booming Bovis Promises Boost in Volume
Reporting a17.5% increase in full-year pre-tax profits to 123m for 2003, Bovis is on track to deliver a seventh consecutive year of record profits in 2004. Reservations are already 25% up on the same time last year and CEO Malcolm Harris is upbeat and looking to increase volumes in order to maintain growth as selling price increases start to moderate. He said: We are confident we can carry on delivering record performances but we expect volumes, not prices, to be the main driver of the business going forward. (Times, FT, Telegraph, Express)
Rates on Hold For Now
As expected, the Bank of England decided to keep interest rates on hold last week. However, the odds of a rise next month have shortened after figures showed manufacturers margins and retail sales were higher than anticipated in February. Economists are now expecting a quarter point rise to 4.25% either in April or May. (Telegraph, Times)
80% of Towns Now Unaffordable to FTBs
Eight out of 10 towns are out of reach to first time buyers because of house price rises, the Halifax has announced. The banks survey of the UKs 667 main towns, revealed that 531 were out of reach for first time buyers earning average salaries for their area. With the average price now 112,541, this equates to 4.27 times earnings. Just a year ago the figure was 3.64 times earnings. The most unaffordable town is Hemel Hempstead, with properties costing an average 11.89 times the average first time buyers income. (Express)
Doubling of FTBs Paying Stamp Duty
Almost all FTBs in London and the South East are now paying Stamp Duty compared to less than half 10 years ago, according to a report from the Nationwide. The findings hardly come as a surprise but have prompted the building society to issue a urgent call on government to raise the duty threshold for first time buyers from 60,000 to 150,000. Nationally, three-quarters of FTBs are now hit by the tax compared to 18% a decade ago. (FT, Times, Telegraph)
HBF Note: This is a useful, if not surprising, reminder for more government action on the collapse in the number of FTBs the lifeblood of the housing market
Second Homes Market Doubles in Six Years
A survey has revealed the extent of second homes ownership and prompted renewed calls for them to be subject to an increased tax burden. The survey, by FPDSavills, reveals there are now 206,000 second homes worth 40bn a market which has doubled in the past six years. The South West has almost a quarter of all second homes with other hot spots being not surprisingly the East Anglia coast and the Lake District. However, the biggest growth has been in London which has seen a surge in buyers seeking a pied a terre while keeping their main home elsewhere. (Guardian)
Kens Figures Dont Add Up
Ken Livingstones well-publicised demand for 30,000 new homes a year in London is unattainable according to his own calculations. The Mayors London Plan shows only 214,000 homes are planned between 2007 2016, an average of 21,400 a year. Confronted with the discrepancy, a spokesman for Livingstone said higher densities would close the gap. However, more holes are appearing in Livingstones plans. The Mayors gain to stock policy, which calls for increases in office space to be matched with residential including 50% affordable housing would not be viable except in a few high-value areas of the West End and City, according to research carried out by London Residential Research. (EG)
Westbury A Home for Life
Bored at work? Not if you work at Westbury, which has just been rated the 74th best firm in the country by the Sunday Times. Whilst three-quarters of staff say their work is stimulating, 77% feel supported by their managers and 72% feel they have control over their working lives. With a host of incentive schemes and a reasonably balanced male to female ratio, the company keeps staff motivated and largely free of the macho tendency in the building industry. But where Westbury really shines is in job satisfaction with 79% saying they are never bored with their work the eight best ranking of any UK firm. (Sunday Times)