A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
Government News
Gordon Brown's 2007 Budget
On Wednesday Gordon Brown announced the budget for the year. The main points on housing were as follows:
Planning-gain Supplement - the local share of PGS would be paid directly to the Local Planning Authority, with the Mayor of London directly receiving the London share of PGS revenues
Barker Review of Land Use Planning & Planning White Paper - Planning White Paper will include measures to give a more explicit role for market signals to inform plans and planning decisions, and also to speed up appeals cases
Empty property relief - empty property relief will be limited to six months for industrial and warehouse properties, and three months for all other types
Housing & Planning Delivery Grant - following consultation, a new Housing & Planning Delivery Grant is being set up
Shared equity - a new shared equity competition is being inaugurated with the help of the Housing Corporation
Zero carbon homes - as announced in the pre-Budget report, new homes which are zero carbon and worth up to £500,000 will be exempt from stamp duty up to 30 September 2012. Those in excess of £500,000 will receive a reduction in their stamp duty bill of £15,000. The Government will review the exemption before the end of the time limit with a view to extending it and amending the qualifying criteria as necessary.
Microgeneration - Ofgem is being asked to look at ways green homes can benefit more from the prices paid to them when they become not just sources of clean energy for themselves but sell it back to the grid.
Brownfield land tax incentives consultation - in line with the Lyons Inquiry recommendations a consultation on proposals to improve the effectiveness of the two tax incentives for cleaning up contaminated land, land remediation relief and the exemption from landfill tax for waste from contaminated land. The consultation covers:
Long term derelict land
Improving the development focus
Timing issues in land remediation relief
Japanese Knotweed
The landfill tax exemption for waste from contaminated land
The deadline for responses is 14 June 2007.
Low Carbon Buildings Programme - an extra £6 million has been made available for phase one (households) of the grant scheme to help the installation of microgeneration
Included in the Chancellor's speech, but curiously not in the detailed documentation, was this statement on mortgages for investment in energy efficiency:
"I have been consulting with the major banks and building societies and encouraging them to create a new market - mortgages for immediate capital investment in energy efficiency that cuts consumption and cuts bills that in the end not only pays for itself but increases the sale value of the home."
Publication of the Lyons Inquiry into the reform of Local Government
Sir Michael Lyons has published the final report from his independent Inquiry into the future role, function and funding of local government - Place-shaping: a shared ambition for the future of Local Government
The report has come up with the following pertinent recommendations:
Business rates - local authorities should have the flexibility to set a local business supplement to increase investment in local infrastructure
Brownfield & derelict land - The Government should develop proposals for the taxation of derelict property and brownfield land and consult on those with stakeholders (see above)
PGS - If the Planning-gain Supplement is introduced, the Government should:
Design it primarily as a local revenue source, with a regional share of an appropriate scale, not as a national source which may or may not be allocated to authorities. It is imperative that a transparent and predictable link between local development and local resourcing exists if development is to take place, or incentive effects are to be realised
Consider whether in two-tier areas, it could be managed through plans jointly developed and implemented by county and district authorities.
"Four pillars" for sustainable housing growth announced by Environment Agency
Attention must be given to the "four pillars" for sustainable housing growth or essential environmental services, such as water and sewerage infrastructure and flood protection, may begin to fail, according to the Environment Agency.
In two related reports released this week, the Environment Agency sets out the need for the Government, regional assemblies, local authorities and developers to follow the "four pillars": get the location right, plan for the longer term, reduce demand for new infrastructure, and secure funding for environmental infrastructure early.
The Environmental Audit Select Committee publishes its Pre-Budget 2006 and Stern Review report
The report expresses concerns that the upper limit of a target of 550ppm greenhouse gas concentration by 2050, proposed as a guiding principle in the Stern Review is excessively dangerous and that a prudent approach would be to aim for 500ppm or below.
The Committee believes that there are many ways in which Stern's projected figures for the costs of global warming are likely still to be underestimates, and calls for the Government to publicise more strongly the size of the challenge summarised in the Stern Review.
The Report also expresses disappointment in the Treasury's failure to incorporate the findings of the Stern Review into its Pre-Budget Report.
On energy policy the Committee arrives at the conclusion that the Pre-Budget Report's announcements were welcome, but only small steps in the right direction. The report calls for swifter and bolder action on energy efficiency.
Prime Minister reinforces need to build more homes in the South East
During Prime Minister's question time on Wednesday Tony Blair responded to Anne Main, Conservative MP for St Alban's concerns on new homes being built in the area:
Anne Main: We all want to be cleaner and greener, and have a cleaner and greener environment, but in Hertfordshire, we have massive road congestion, groaning infrastructure and high pollution. St. Albans has one of the largest CO2 footprints in Hertfordshire, so will the Government listen to my residents' concerns, and stop ratcheting up the housing totals that are imposed on us?
The Prime Minister: I understand why the hon. Lady raises that concern, but the truth of the matter is that we need more homes in the south and elsewhere, particularly for couples and first-time buyers who need to get a foot on the first rung of the housing ladder. We will not be able to deal with the housing problems of an expanded number of households unless we build new homes. We will protect the green belt-in fact, we have increased it. We have dramatically increased the amount of new build on brownfield sites, but it is not a realistic policy, I am afraid, to say that there will be no more house building in the south-east.
HIPs promotional campaign due to be launched
According to the HIPs Government newsletter ‘Progress' a national promotional campaign for HIPs is due to be launched at the end of March. Full-page adverts will be appearing in national newspapers from Sunday 25 March and a direct marketing campaign to estate agents and solicitors has also commenced with a series of direct mail shots:
Further mailings to estate agents and solicitors are planned to follow the laying of the HIPs Regulations next week. Other mailings will include a starter pack of marketing materials for estate agents and others to use to promote packs and products which will help them explain HIPs to their customers.
HBF landmark policy conference achieves record turn out
Over 200 delegates attended the HBF Spring Policy Conference entitled 'A new Agenda in Homebuilding' to be briefed on the full spectrum of new Government housing and planning policies introduced at the end of last year and their implications for the future of home building.
Held in Central London on Tuesday 20 March, the conference was led by HBF Executive Chairman, Stewart Baseley, and supported by a number of senior figures from the industry including the recently appointed Chairman of The Review of Housebuilding Delivery, John Callcutt, and Imtiaz Farookhi, Chief Executive of NHBC.
Speaking at the conference, HBF Executive Chairman, Stewart Baseley, told delegates that Britain's home building industry had successfully addressed the key challenges levelled at it in the Barker Review of Housing Supply published three years ago and was now leading and influencing new policy thinking in important areas.
He discussed advances made in:
Customer satisfaction strategy
Modern methods of construction
Skills
Design
Relationship Director David Bruce from the Royal Bank of Scotland, sponsors of the conference, commented "A very informative conference. Good varied speakers highlighting all the key industry issues".
Bill Beyzade at George Wimpey North Thames said "Very Informative. An excellent insight into Sustainability, PPS3 & PGS".
Download policy briefing from the conference (HBF members only)
Download presentations from the conference
Stewart Baseley voices concern over regional assemblies and local authorities seeking to accelerate the timescales towards zero carbon
In a speech to delegates at the joint HBF/EST ‘The house that Bjorn built -towards the zero carbon home' conference in Central London yesterday, Stewart Baseley, alongside Angela Smith MP CLG Parliamentary Under Secretary of State, said that overall he was extremely pleased by the industry's response to the 2016 zero-carbon housing challenge. He thought that general progress was good but raised a major concern which centres on the proliferation of regional assemblies and local authorities seeking to accelerate the timescales unrealistically;
"Having to conform to a multiplicity of targets in different locations, I believe, will pose a very real risk to our ability to increase housing output. Indeed it could lead to output declining in the short term and a range of products emerging that have not been properly tested, will not do what they claim and will lead to consumer frustration, loss of confidence and potential failure. The point is that we do not know how to achieve zero-carbon standards in any kind of meaningful volume. A proliferation of targets will harm our ability to innovate, test, prove and deliver in numbers that we need to. We need to urge caution, counsel against misguided initiatives, and keep focus on the bigger picture rather than short term gesture politics"
Halifax House Price Index reports market strengthening
Average seasonally adjusted prices rose by 1.5% (£3,381) last month as the spring market strengthened and shrugged off fears of another interest rate rise according to the latest Halifax House Price Index.
The Index also reports that this increase provides further evidence of the resilience of the housing market, with buyers continuing to trade in spite of new record price levels, three interest rate rises and the threat of another in the pipeline.
Bank of England's figures, published in its quarterly report, show the housing boom has only brought riches for the older members of society.
The Bank of England's figures published in its quarterly report this week show that older households (aged 55 and over) experienced the largest gains in net financial wealth and the value of their housing assets between 2000 and 2005. By contrast, middle-aged households (35-54 year olds) tended to borrow more over that period, possibly to keep up with rising house prices, while younger households (18-34) have borrowed less possibly because they have not entered the housing market.
Monetary Policy Committee votes 8 to 1 to leave interest rates unchanged
The Monetary Policy Committee (MPC) voted 8 to 1 to leave interest rates unchanged at its March meeting, according to the minutes, with recent financial market volatility influencing the decision. The Bank's latest projections, which build in the market assumption of at least one more bank rate increase over the next 12 months, suggested that the risks to inflation were on the downside in the near term, whereas the medium-term risks were still on the upside. The Committee concluded there were some signs that the housing market might be slowing, quoting in particular the year-on-year drop in net reservations in January recorded by the HBF Monthly Survey and easing in a number RICS survey indicators.
Consumer price inflation and retail sales rise
Consumer price inflation edged up again in February to 2.8%, while headline retail price inflation rose sharply to 4.6%, the highest rate since August 1991.
Retail sales rose by a robust 1.4% in February, the largest monthly increase since January 2005, according to official statistics. This followed a 1.5% fall in January. Sales in February were 4.9% above a year ago.
Housing Market Feels Rate Rise Impact according to NAEA
The National Association of Estate Agents (NAEA) released figures from its latest housing market survey today, revealing that the residential housing market has begun to feel the full effects of the interest rate rises seen in the past few months. The average asking price for a home in February 2007 was £213,259, compared to £217,955 in January.
Both registered buyers and the number of sellers on estate agent's books decreased in February, with housing stock being significantly down from the same period last year.
However, on a positive note the time taken from instruction to completion decreased on average by a week from the same time last year and the number of completed sales remained steady from January 07 and February 06, showing solidity in the market.
Green Issues gather momentum in the UK Housing Market
MORE TH>N insurance revealed research showing that the majority (70 per cent) of homeowners agree that all new builds should be eco-friendly, with just under a fifth (17 per cent) prepared to pay out more for them:
70 per cent of British homeowners want all new builds to be ‘eco-friendly'
One in four have already made environmental improvements to their homes
Just under a fifth of Brits would pay more for an eco-friendly home
A further fifth specifically look for green features in a new home.
Jo Turner