A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Morgan announces new Welsh Cabinet
First Minister in the new Welsh Assembly Government, Rhodri Morgan, has announced the new Welsh Cabinet. In a slimmed down Cabinet of 7 members, housing and planning responsibilities have again been shared between Ministries. Key Ministers for HBF will be:
Minister for Social Justice and Public Service Delivery, Andrew Davies - responsible for child poverty, housing, public service delivery, local government, the Spatial Plan and community safety
Minister for the Economy and Transport, Dr Brian Gibbons - responsible for economic development; transport and regeneration, and;
Minister for Sustainability and Rural Development, Jane Davidson - responsible for climate change, sustainable development, environment, agriculture, energy and planning
In addition, Leighton Andrews has been appointed Deputy Minister for Social Justice and Public Service Delivery with special responsibility for housing.
Rhodri Morgan commented:
"The virtue of the new Cabinet is that it represents a major refresh of almost every portfolio with roles occupied by Ministers completely new to those roles. They will bring a new impetus and energy to driving forward our policy programme in co-operation with others across the Assembly where we are of like mind. I am confident that this approach will receive a positive response from parties who have expressed a need for greater co-operation because it is in the interests of Wales."
Following the distribution of the HBF's manifesto to all candidates in the recent elections, we will seek meetings with Ministers and other key Assembly Members who have expressed an interest in discussing housing issues with us.
While Plaid Cymru calls for affordable housing to be a priority
Plaid Cymru has immediately drawn attention to housing problems following announcement of the new Cabinet. Plaid cited Assembly Government figures showing that the social housing stock declined from 21 per cent of total stock in 1990-91 to 17 per cent in 2005-06, and that the number of house purchases by first time buyers in Wales fell by 20 per cent between 1995 and 2005, from 18,800 to 15,000 purchases.
Plaid's Deputy Assembly Leader Rhodri Glyn Thomas said:
"Affordable housing has to be a priority for the National Assembly's third term. These figures confirm why Plaid made first home grants one of our 7 for '07 key pledges at the last election. Young people must have the right in the future to own a home in their own communities. We must give our young the security to succeed. Plaid will seek to draft legislation to create a First Time Buyer's Grants so the next generation get the chance they deserve. We are calling for a repeal of the ‘Right to Buy' in housing hot spots where there is a shortage of rented accommodation."
Department of Communities and Local Government launches Planning White Paper summary to aid consultation
Department of Communities and Local Government has published a summary of last week's Planning White Paper, including all the consultation questions, to aid consultation responses.
View summary and consultation questions
The consultation period ends on 17 August 2007, submissions should be sent to planningreformconsultation@communities.gsi.gov.uk
HBF will be discussing the proposals with members at forthcoming meetings, including our regional Managing Directors' dinners and regional planning meetings.
The Department of Trade and Industry release more microgeneration grants for householders
The DTI announced that applications for grants from people who want to install micro-wind turbines and solar panels on their homes would be accepted again from 29 May.
Following the addition of an extra £6m funding in the Budget, applications for the remaining £11.9m in the Low Carbon Buildings Programme (LCBP) can now be made. The DTI said that since it launched in April 2006 the LCBP has directly funded 2175 installations on homes. This includes 242 mini-turbines, 313 Solar PV projects and 1467 solar thermal heating systems.
Proposed changes to the North East RSS
Proposed Changes to the Regional Spatial Strategy (RSS) for the North East were published for public consultation by CLG on Tuesday 29 May 2007. The Proposed Changes take into account the Panel's recommendations and also the views of everyone who has commented so far, as well as changes in Government policy since June 2005. The revised RSS supports a continuing level of economic growth. There are also policies to address climate change, transport, waste management and environmental issues. Key issues from the Proposed Changes document are a new policy on climate change, an increase in the total number of additional new dwellings in the region from 107,000 to 112,000 over the period to 2021 in line with the Panel's recommendation, a revised statement of future major transport priorities and new policies on 'green infrastructure'
There is a request for more information from the North East Assembly and others on the Panel's recommendations to reconsider housing allocations to some districts (Easington, Sedgefield and Blyth Valley) - this includes an invitation to take into account the latest population and household projections, which show the possibility of increased growth in the region.
Ruth Kelly has also announced that because some of the proposed changes involve new proposals by Government, and because she is asking the North East Assembly for more information there will be two rounds of consultation. The first will last for ten weeks, until 6 August 2007. After Government has considered all comments, a further set of Proposed Changes will be published for a second consultation, lasting eight weeks. After considering any further views, the Secretary of State will publish the final revision of the RSS.
HBF briefings on the Yorkshire and Humber and North West RSSs
Briefing notes on the recent Yorkshire and Humber RSS Panel Report and the North West RSS Panel Report are available on the HBF website.
View Yorkshire and Humber Briefing
Bank of England figures point to cooling of market
The latest Bank of England figures show the number of new mortgage approvals in the UK fell to a 12-month low in April. Mortgage approvals totalled 107,000 in April, down from 111,000 in March and the third monthly decline in a row.
Mortgage lending rose by £8.9bn, much less than expected, and the weakest rise since September.
Nationwide expect slowdown too
Nationwide's latest figures show the average price of a UK home rose by 0.5 per cent in May, pushing the year-on-year rate of increase up from 10.2 to 10.3 per cent. The price of a typical house now stands at £181,584, almost £17,000 higher than a year ago. However, the three-month on three-month growth rate eased to 1.8 per cent. Nationwide said a further weakening could be expected in the months ahead.
Fionnuala Earley, Nationwide's chief economist, said: "We now expect there is a strong chance that [interest] rates will be increased once more this year, to 5.75 per cent. Higher rates clearly present risks to the housing market, but providing the economy, and particularly the labour market, remain in good shape, we should still be able to expect a measured cooling."
The latest Land Registry house price index shows the largest divergence between London and the regions in the last two years
Headline figures in the April index are:
Current index 218.8
Average price £179,935
Monthly change 0.6%
Annual change 9.1%
The April data shows the current rate of increase for London house prices is over six per cent per annum greater than that of England and Wales as a whole. This is the largest divergence in the last two years, when London lagged behind the rest of the country by approximately six per cent. The divide in annual growth between London and England & Wales has averaged 3.6 per cent over the last six months.
The average price for Greater London in April 2007 stands at £333,785 whereas the average price for England and Wales is £179,935.
NAEA survey finds market stable over Easter period
The National Association of Estate Agents' latest monthly survey found the housing market stable nationally in April with a healthy supply of properties coming on to agents' books in many areas. However, supply in London and the South East remained poor. The average difference between asking and selling price decreased to 2.7%, compared with an average of 3.4% in April 2006, which NAEA see as a sign of greater realism on the part of vendors. Looking at future prospects, NAEA immediate past President, Charles Smailes, commented:
"I believe there will be a huge increase of properties flooding onto the market despite the impending HIPs legislation having being postponed until 1st August. The anticipation of HIPs will have definitely meant that the May housing market report will see an influx of properties being placed onto the market which will have allowed them to defer from the added expense and time of setting up a HIP. However, since the announcement I anticipate that there will be a significant cooling in the last week of May."
Researchers at the Universities of Aberdeen and Loughborough claim the housing boom is threatening the life chances of the younger generation
The University of Aberdeen has published research by the two universities which highlights the social divisiveness of the current housing affordability problem and claims the impact of buy-to-let on the property market is having a negative impact on housing affordability. It cites the following reasons as lying behind the current housing boom:
the rise of Buy-to-let
growing opportunities to borrow money
the lack of restrictions on the multiples of income people are permitted to borrow
The authors attack the ‘crude form of capitalism' which they believe the housing boom represents, and claim that the solution is legislation, although they do not specify in what area.
Co-author of 'On the Treadmill', Dr John Bone, said "Many young couples and families are now assuming levels of debt that will render them little more than bonded labourers, particularly in a rising interest rate environment, to the financial institutions that once 'helped them out' with huge advances in terms of their incomes."
Workshops on how to use its Section 106 financial viability tool, are being held by the Housing Corporation in the South East of England
Designed by property consultants GVA Grimley and Bespoke Property Group, the tool aims to speed up negotiations to agree the amount of affordable housing built under Section 106 planning rules.
HBF discuss HIPs arrangements with CLG
HBF has met officials at Communities and Local Government to discuss the revised arrangements for the introduction of Home Information Packs (HIPs). Revised regulations will shortly be presented to Parliament. We are continuing to discuss detailed arrangements for the provision of Energy Performance Certificates for new homes with officials and will brief you on the final details when these have been confirmed.
Rachael Pymm