A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Economic News
Interest Rate Rise
As expected, on 8th May the Monetary Policy Committee (MPC) raised Bank Rate by 0.25 percentage points to 5.50%. The rate was last set at this level in April 2001.
Explaining its decision, the Bank said "the margin of spare capacity in firms appears limited and there are signs that businesses are more able to push through price increases. Relative to the 2% target, the risk to the outlook for inflation in the medium term consequently remain tilted to the upside."
The next Inflation Report, which will contain a detailed assessment of the Bank's current thinking, will be published on 16th May.
HBF to hold second zero carbon summit on 6 June
The HBF is organising a second roundtable summit on 6 June in London to share the latest thinking of the 2016 Task Force on how to tackle the issues involved in working towards a zero carbon performance standard for new homes within ten years. The summit will also seek stakeholders' views on the emerging proposals for a policy definition of zero carbon and a public "Concordat" setting out the means by which the main parties involved could demonstrate their wish to work together. We will again be inviting senior HBF members to the summit.
Ed Balls mentions HBF's Callcutt Review submission in Treasury questions
In Parliament yesterday the HBF was mentioned by Ed Balls, Economic Secretary to the Treasury, in a session of Oral Questions to the Treasury. The debate was on issues surrounding Government changes to the rules for the rating of empty properties. As part of a reply to Anne Main MP (Conservative, St Albans), Mr Balls said:
"The Government are working hard to ensure that we provide the right conditions for businesses to grow, for land and property to continue to be developed, and, once developed, for it to be used efficiently. In its submission to the Callcutt review of house-building delivery, the Home Builders Federation signaled the supply of land as the major factor that will determine whether the Government's target of 200,000 new homes built by 2016 will be met. As the Government increase the supply of housing to meet the needs of households across the UK, a tax relief for property sitting empty on developed sites makes neither economic nor environmental nor social sense. That is why this is a principled reform that is overdue and forms part of a positive set of announcements on the future taxation of land and property."
Affordable housing and education are the top issues Labour Party members want the government to address, according to a YouGov poll.
The YouGov survey commissioned by deputy leadership contender Jon Cruddas showed 54 per cent of members thought housing should go to the top of the policy agenda. Second was education, identified by 49 per cent, with pension provision in third place on 35 per cent.
Cruddas said the poll reinforced his manifesto pledges for a serious discussion on policy priorities.
"Tony Blair called last week's [election] results 'a springboard'. Party members take a more sober view of things," Cruddas said. "The poll shows that members think we can still win the next election. I agree with them - we can beat Cameron's Tories. But to do so we need to take a long hard look at the party's current state, adopting new policies that will appeal to a broader range of people in Britain, and new structures which will help us rebuild our party."
HIPs - the arguments continue
It has been another heated week in the public debate between critics of HIPs and the Government. We first survey some of the key contributions to the debate and then summarise the latest parliamentary position.
In a House of Commons Written Answer on 2 May Yvette Cooper confirmed the introduction of Energy Performance Certificates and HIPs on 1 June
Sir Nicholas Winterton: To ask the Secretary of State for Communities and Local Government (1) what assessment she has made of the conclusions and recommendations of the Better Regulation Commission's report Energy Performance Certificates and Residential Property; and whether Home Information Packs will be introduced on 1 June and (2) whether her Department is proceeding with the requirement that Energy Performance Certificates be included in Home Information Packs following the report by the Better Regulation Commission, Energy Performance Certificates and Residential Property, published on 26 February; and if she will make a statement.
Yvette Cooper: The Government have considered the views of the Better Regulation Commission (BRC) as well as the views of a wide range of stakeholders and organisations. We believe that home buyers need up to date energy information on their new home rather than energy information which is up to ten years out of date as the BRC have proposed.
Home Information Packs including Energy Performance Certificates that are no more than three months old at the point of first marketing will be introduced on 1 June. The relevant regulations and supporting regulatory impact assessments were laid before the House on 29 March and came into force on 19 April.
AHIPP claim HIPs could considerably reduce individual and economic stress
Mike Ockenden, Director General of the Association of Home Information Pack Providers (AHIPP), said in a statement: "The high levels of transaction failure and the extended period of uncertainty between offer and exchange of contracts in the current home buying and selling process is one of the most stressful times that consumers will endure in their lifetime."
AHIPP also cited research carried out this year by Your Move, asking a cross section of purchasers who had just completed the home buying process about their experience. Purchasers were asked about the stress associated with the process and if it affected their productivity at their place of work, with over 40% of respondents reporting that they were less productive at work when going through the current process.
Mike Ockenden commented: "Even a very conservative analysis reveals that if a 10% loss of productivity is experienced by 40% of all people involved in the house buying and selling process, the cost to the economy is over £500 million a year. HIPs will significantly reduce the time taken to exchange of contracts - by bringing more information, which can often prove timely to collate, to the front of the process.
"HIPs will undoubtedly have the benefit of reducing stress levels for home buyers and sellers across the UK and as a result, this could potentially translate into a huge benefit, not only for the consumer but for the wider economy."
AHIPP survey shows that there will be more than 3,500 trained and accredited operatives by 1 June
According to AHIPP a survey of 10 leading training and assessment centres for Home Inspectors and Domestic Energy Assessors (DEAs) shows that there will be in excess of 3,500 trained and accredited operatives by 1 June.
AHIIP claim that with Home Condition Reports (HCRs) now being voluntary only around 2,500 full time assessors will be needed to meet likely market requirements in June.
Media Interest
Media comment on HIPs has intensified of late and has been hostile to the proposals.
Speaking to the Daily Express on 7th May, Michael Gove, Conservative Shadow Housing Minister, said: "The Government's incompetence on this issue has yet again been exposed and they must acknowledge their failure for the sake of the stability of the housing market."
The Daily Telegraph has also been critical; in an article entitled "Time to do homeowners a favour", their correspondent writes: "The looming fiasco that is the Government's home information pack (HIP) will serve as a fitting memorial to Tony Blair's 10 years in office. It is pure, unadulterated, 24-carat New Labour - pointless, ill-conceived, spiteful, smug and incompetently delivered."
The Daily Mail published an article entitled "A case of dodgy HIPs" on 4th May, and has been campaigning against their introduction, stating they could damage the housing market and price out first-time buyers.
Update - Latest Parliamentary Position on HIPS
There remain two stages to go through before we know whether or not HIPs will be introduced on 1 June.
There will be a Commons debate and vote next Wednesday, 16 May. This debate is taking place whilst the legislation is still passing through the House of Lords, something of a constitutional peculiarity. It is thought that the Government is likely to win this vote with its Parliamentary majority.
Following this debate, but before 24 May, the Lords are then due to debate the HIP Regulations. It cannot yet be ruled out that the Government might be defeated at this stage, although Government success in the Commons vote would potentially affect the views of the Lords.
The House of Lords Merits Committee has produced a report on HIPs
The report ends 'We cannot but conclude that the Government have not been able to convince the principal stakeholders in the housing market that their proposals as they now stand are sensible or worthwhile, or are likely to be effective for their declared purpose'.
We will continue to update you on the position following the results of these debates.
The Department of Trade and Industry re-open microgeneration grants for householders
Following the addition an extra £6m funding in the Budget, the DTI's Low Carbon Buildings Programme (LCBP) - which has already allocated £6.8m in grants to householders - will re-open for applications for the remaining £11.9m available from 29 May.
The recent temporary closure of the grant scheme due to extremely high levels of demand from householders has led to significant criticism of the Government by Opposition front bench spokesmen and it is likely that the scheme will continue to be seen as under-funded.
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.
CLG have published a summary of research entitled Planning for Housing: Market Signals
On 9 May, CLG published a summary of research undertaken by Atis Real and Sheffield, Cambridge and Reading Universities, entitled Planning for Housing: Market Signals. As part of the Government's response to the Kate Barker report on housing supply (March 2004), the research examined how local and regional planning could be more responsive to market signals in allocating and releasing land for housing. Directed at regional and local planning bodies the research is clearly aimed at supporting the requirements of PPS3 (November 2006) with regard to strategic housing market area and housing land availability assessments.
MPs find fault with water regulator
The House of Commons Public Accounts Committee has criticised Ofwat's weakness as a regulator in a report published on 10th May 2007. It particularly condemns Ofwat's failure to impose fines on companies that failed to stop leaks.
The Committee was also unhappy that Ofwat had no reliable data on water usage or which efficiency measures were effective.
HBF has been saying for some time that the regulator should use the powers granted to it by the Water Act 2003 and we hope that the report will provoke a greater interest in promoting water efficiency for all stakeholders, including housebuilders.
Research by Engage Mutual has revealed first-time buyers expect to buy their first home by the time they are 28
The research revealed that financial limitations are causing under 25-year-olds to delay moving out of the family home by three years, compared to older generations. However, with growing acceptance of debt, and despite escalating property prices, under 25-year-olds anticipate buying their first home almost a year ahead of their grandparents.
Engage Mutual questioned a Great Britain representative sample of 2,300 adults about their aspirations and experiences. The results reveal that, whilst under 25-year-olds may be struggling to move on in life, they are accepting debt to get a foot on the property ladder.
Key Findings:
One third (34%) of Britons under 25 anticipate waiting until they are at least 24 before being able afford to move out of their parents' home. Today's retirees fled the nest three years earlier at the age of 21.
More than eight in ten (84%) retirees moved out of their parents' home by the time they were 25, in contrast just two in three (67%) of under 25 year olds already have or are anticipating moving out of home before they are 25.
Under 25 year olds expect to be able to afford to buy their first home at 28 - on average nine months before their grandparents set foot on the property ladder.
Just over one in two (58%) retirees bought their first home by the time they were 30. Under 25s are more optimistic, with 61 percent already having bought or anticipating buying a first home before they are 30.
The Scots have seen the greatest transformation in their experiences of home buying. Retired generations in Scotland waited until they were 32, longer than any other part of Great Britain, to buy their first home. Today's young Scots are the most optimistic, expecting to buy a home by the age of 27.
Home energy audits could save households up to £230 a year, says the IPPR
Providing every home with a free energy audit could lead to UK households on average saving up to £230 a year on their energy bills and a total carbon dioxide saving of over 30 million tonnes, according to new research published yesterday by the Institute for Public Policy Research. The report says that the energy we use in our homes accounts for around 60 per cent of the average person's CO2 emissions.
IPPR's report says that the Government, working in partnership with the energy companies, should roll out free home energy audits to the UK's 24 million households by 2012. These would offer advice on the most cost effective way for homes to use less energy and could give annual savings of up to £6 billion on energy bills.
Home energy audits provide advice on fitting insulation in cavity walls and loft spaces, installing efficient condensing boilers and other measures. They could also give guidance on installing micro-renewable technology like wind and solar power, which offer further cost savings in the long-term and help to cut emissions. They also help homeowners access the grants that are available to make improvements.
IPPR's report also argues for the Government to accelerate the introduction of an obligation on energy suppliers to reduce energy use, to replace the current commitment to encourage householders to be more energy efficient. The IPPR believe this would incentivise energy companies to help consumers pay for energy efficiency improvements identified in home energy audits.
Rachael Pymm