A weekly news summary covering all aspects of the House Building Industry, from Pierre Williams
House Prices to Double by 2020
John Prescott’s “step change” in housing provision is a “drop in the ocean” and will fail to address the affordability crisis, a think-tank has warned. The result will be that in 2020 the average homes will be worth more than double says the Centre for Economics and Business Research. The organisation said: “Yes it’s laudable that were looking to build in the Thames Gateway and that the ODPM has started to revise up its projections but they still don’t take into account the underlying demand in the housing market.” (Inside Housing)
Northern Gains but Southern Woes
House prices have fallen by up to 3% in the London commuter belt. In contrast prices rose by up to 2% in the North. Surrey, Berkshire, Sussex, Oxfordshire, Gloucester, Wiltshire, Somerset and Devon all saw falls, while Durham, Teeside, and Tyne and Wear all saw gains, according to the Hometrack survey. Overall, prices fell by 0.1%. Nevertheless, average prices are expected to increase by 4% over the year. (Mail, FT, Times, Express)
Interest Rates May Have to Rise says OECD
Britain may have seen the last of its cuts in interest rates the Organisation for Economic Co-operation and Development has said. Although the economic upturn is likely to be “sluggish” it will not require further rate cuts. Britain’s house price rises and level of household debt will also be insufficient reasons not to raise rates over the next year especially as inflation, although low, remains above target. (Times)
First Time Buyer Slump
First time buyers accounted for just 30% of all mortgages arranged in the first quarter of the year – 10% lower than at the same time last year and down from half of all loans in 1999. A general reluctance form most lenders to increase lending to six or even eight times salary is being joined by a reluctance from first time buyers to take on that much debt. (Sunday Telegraph, FT)
Westbury Gets American Investment
Westbury has raised £150m from 10 US institutions at attractive interest rates to restructure its current borrowings brought on by its buyout of Prowtings. The deal demonstrates US willingness to invest in UK house builders. Finance Director John Bennett said: “It gives us the ability to grow. We could have raised more and it shows confidence in Westbury and the UK house building market.” (FT)
Stephen Hawking Turns Nimby
Cambridge academic Stephen Hawking has joined a campaign against plans for 1,000 homes near his home at Grantchester Meadows. The proposed plans are to be examined by Cambridge City Council in June. (Independent)
HBF Rejects Increased Affordable Housing Demands
House builders are prepared to build more homes in London but have rejected increasing the percentage of affordable housing from 30% to 50%. HBF called for a target of 31,900 new homes a year. Mayor Ken Livingstone is meanwhile sticking to his guns by warning he will reject plans to redevelop the Millennium Dome site unless his demands for an increase in the proportion of affordable homes are accepted. (Inside Housing)
Leading Environmentalist Warns of High-Density Solution
A leading environmentalist and member of Unesco’s Urban Forum has warned that Britain’s current passion for “compact” urban development is “dangerously wrong”. In a major article for the New Statesman, David Nicholson-Lord says failure to appreciate that people aspire to living at lower densities will result in failed policies and points out that even CPRE research revealed that urban centres with the highest densities lost the greatest proportion of residents. (New Statesman)
Pierre Williams
House Builders Federation
April 28, 2003