A weekly news summary covering all aspects of the housebuilding industry. Available to members only.
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Housing will have a voice in Brown's new Cabinet...... read
HBF meet OFT to discuss study of house building...... read
Latest figures from Nationwide show June house price growth...... read
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Yvette Cooper to remain Housing Minister with a voice in Brown's new Cabinet
Yvette Cooper is to continue as Housing Minister in Gordon Brown's new Cabinet and Ministerial team. The importance of this role has been recognised by the Prime Minister's announcement that Yvette Cooper will attend Cabinet.
New Leader underlines the importance of housing
In his acceptance speech on becoming Labour Party Leader, Gordon Brown set out the importance he attaches to housing: -
"Half a century ago, housing became a national priority and there was a promise of a property owning democracy, but then unfortunately it was just for a few.
Now in 2007, housing will be a priority. The Housing Minister will attend Cabinet and will lead the national debate on the new homes we must build. And this time the promise of a property owning democracy must be open to all those wanting to get on the housing ladder for the first time.
And because we need to build new homes not just to own but to rent, we will bring together the private sector, housing associations and local authorities to renew the promise of social housing for our communities.
By building new eco towns and villages we will show Labour on the side of aspiration, that new housing can respect our environment too, and that by involving and engaging the British people in a national debate about the future of housing we can make affordable housing for all one of the great causes of our time"
The announcement comes after Stewart Baseley, Executive Chairman of HBF, called on Gordon Brown to mark his commitment to building new homes by creating a new role of 'Secretary of State for Housing' with a seat in cabinet. The proposal was part of a ‘mini-manifesto' setting out five measures which HBF believes the new Prime Minister should prioritise in order to tackle the shortage of housing facing the country.
View Gordon Brown's full acceptance speech
View Gordon Brown's full change of Government and Cabinet statement
Blears takes over from Ruth Kelly as Communities Secretary
Hazel Blears has been appointed Secretary of State for Communities and Local Government as part of Gordon Brown's first Cabinet. Prior to this, she was Minister Without Portfolio and Party Chair. She takes over from Ruth Kelly who has moved to a new position as Secretary of State for Transport.
HBF welcomes new Ministerial team
HBF issued a press statement welcoming the new Ministerial team at Communities and Local Government following its call for housing to have a seat at the Cabinet table.
Commenting Executive Chairman Stewart Baseley said: "HBF called for the Prime Minister to give housing a seat at the Cabinet table in its recent mini-manifesto and I am delighted that the Minister for Housing, Yvette Cooper, will now be attending Cabinet alongside Communities Secretary Hazel Blears. At this vital time for the industry, we also welcome the continuity that Yvette Cooper's reappointment brings.
"Increasing housing supply is one of the most important tasks facing Gordon Brown's new Cabinet. A seat at the Cabinet table is a welcome step forward in the drive to deliver much-needed new homes."
Energy assessors commit to making HIPs live
According to new figures released by Communities and Local Government (CLG), there are 1,340 accredited energy assessors now ready to provide Energy Performance Certificates. Energy Performance Certificates (EPCs), provided by a fully trained and accredited energy assessor, will form a part of the Home Information Pack (HIP), which will go live on 1st August for properties with four bedrooms or more.
Paul Broadhead, Deputy Director General, Association of Home Information Pack Providers (AHIPP) said: "According to our own research, in addition to the 1,340 accredited assessors, there are a further 1,200 assessors who have applied for accreditation and will be fully accredited by the end of July. With this in mind, Government will easily meet the 2,000 target that it suggests is needed to provide HIPs for homes with three bedrooms or more."
English Partnerships publish recommendations to Government for first-ever national strategy to tackle 'brownfield blight'
Policy recommendations designed to bring thousands of hectares of blighted land back into beneficial use on behalf of communities have been published by English Partnerships.
It is expected that the recommendations submitted to Government will form the first-ever national strategy to tackle the problem of ‘brownfield blight' in England.
A ‘how to' toolkit, to be used alongside the Strategy, will help local authorities and private and public sector landowners to assess brownfield land in their communities, which could then be used for new homes, business parks, wildlife reserves, or green open public space.
Currently over 70% of new homes are built on brownfield land; while research conducted in 2002 and again in 2005 shows that the amount of medium and long-term derelict land had fallen by 29% over the three year period.
The strategy aims to support further improvements in the efficiency and effectiveness of recycling land. There are around 63,000 hectares of brownfield land on sites in England, but much of this can be difficult to bring back into use.
View the publication from English Partnerhsips
Government response to EAC's Pre-Budget 2006 and the Stern Review Report
The Government's response to the Environmental Audit Committee's report on Pre-Budget Report 2006 and the Stern Review has been published.
Environmental Audit Committee's Report "Pre-Budget 2006 and the Stern Review' stated:
Our main verdict on the PBR's new announcements on energy policy is that these were welcome but only small steps in the right direction, and that much swifter and bolder action is required...
As for the headline announcement on household energy efficiency, that all new homes are to become "zero carbon" by 2016, we note that the PBR refers to this as an "ambition", and that the building regulations which are to make it happen will only be "progressively strengthened". Overall, these measures do not represent the kind of radical acceleration of policies and funding we would expect to see following the Stern Review.
The Government responded to this by saying:
The Climate Change Bill sets out the Government's ambitious targets to tackle Climate Change, and the forthcoming Energy White Paper will set out measures to achieve these targets...
The Government consulted industry closely in reaching the 2016 date for making all new homes zero carbon, which they have said is challenging but achievable. Setting a date for zero carbon standards any earlier than 2016 could jeopardise the number of homes that need to be built. It is important that the building regulations are progressively tightened over time to help the house building industry move towards the zero carbon standards and test out new techniques and technologies. The 2016 timeline is currently an ambition because we needed to consult before we could make it policy. We will be launching our final policy statement later this year, which will confirm the timetable to zero carbon homes.
HBF meet OFT to discuss study of house building
At HBF's request on Wednesday, Stewart Baseley led a first meeting with OFT officials to discuss its market study of the house building industry.
During the meeting the OFT outlined four key work strands:
Planning and Competition
Consumer issues
Warranties and building regulations
Evaluation: the benefits of the study and its recommendations must have a valued of at least five times the cost of the study
A team of full time and part time officials has now been formed to work on the review and a detailed OFT internal planning meeting will be held next week to establish a programme and timeline. HBF will meet the team again following this planning meeting to discuss the conduct of the study.
It is clear the study will cover the whole industry and companies of all sizes as well as commercial developers. The OFT is expecting HBF to take a lead role in co-ordinating and supplying information on behalf of the industry. OFT has said that it sees both customer satisfaction/quality issues and the lack of market response to demand as indications of an imperfectly functioning market which warrant a market study under its general powers.
Labour responds to Conservative concerns over Finance Bill quoting the HBF
Ed Balls MP quoted the HBF in the Report Stage of the Finance Bill in Parliament this week. He was responding to concerns from the Conservatives that the five-year time limit on the exemption of zero carbon homes from stamp duty was not sufficient to allow for the significant capital investment in micro-generation necessary to reduce the cost per unit. Some MPs wanted to renew the regulations annually, with Brooks Newmark MP saying that the 'window of opportunity' for developers was too short to be meaningful. Mr Balls said:
"Let me quote Stewart Baseley, the executive chairman of the Home Builders Federation, another business man:
"We welcome this package of measures in setting both the goal and direction for achieving more and greener homes. Progress will be achieved most effectively through a framework in which Government sets clear objectives, industry is given the space to deliver and consumers are on board."
"That is what we are trying to achieve with these measures. The [opposition] amendments would not only add to bureaucracy, but by moving to an annual basis for making the decisions, they would have the opposite effect to that intended by hon. Members on both sides of the House and the Government, and also the Home Builders Federation."
Planning Appeals - Important ruling on design
Although HBF does not normally comment on individual planning applications or appeal decisions, a recent Secretary of State decision has been brought to our attention and is considered to potentially have wide ranging implications for the industry.
An appeal by Bovis Homes and BAE Systems against the refusal of outline planning permission for 2,200 dwellings, 66,000sq m employment, 1,500sq m retail and supporting infrastructure and community buildings on a large site at Filton Airfield, Bristol (Ref: APP/P0119/A/06/2019118) was dismissed by the SoS, overturning the Inspector's "minded to grant subject to S106" report.
The appeal turned on 3 main issues; the level of affordable housing provision; the delivery mechanisms of the proposed infrastructure and, most interestingly, whether the submitted illustrative material would give the assurance that the development would achieve a high quality of design.
The interest of this case lies in this third issue, principally due to the Inspector's (and the SoS) lengthy considerations of the submitted Design and Access Statement (DAS) as required by Circular 01/2006. Although the Inspector acknowledged that, in an outline application, details such as layout and appearance did not need to be "fixed", the DAS should demonstrate how it will guide the principles to be followed by subsequent reserved matters applications.
Obviously, as always in such cases, there were a number of site specific issues involved in the appeal decision and the refusal did not turn on the aspect of design alone. However, it is a notable shot across the bows of the industry in terms of how the Planning Inspectorate may well view the content and approach of DAS in the future.
Members are, therefore, advised to re-read Circular 01/06 to ensure that their own DAS meet the requirements as set out in therein.
Nationwide call on Gordon Brown to make a difference
Nationwide Building Society has challenged Gordon Brown to put hard-pressed home buyers and savers at the top of his agenda through real reform that will make a genuine difference. Nationwide believes there are some major concerns that still need to be addressed and called on Gordon Brown to:
Ensure fair tax treatment for all child savers
Provide more help for hard pressed home buyers
Increase the limits on annual ISA savings
According to Nationwide, over the last decade affordability of property in the UK has deteriorated significantly - house prices have increased by 215% and initial mortgage payments, as a percentage of take home pay, have more than doubled (around 22% in 1997 compared to 45% today). In addition to this, the cost of stamp duty has increased enormously. Nationwide would like to see more help for hard-pressed homebuyers and called on the Prime Minister and Chancellor to link stamp duty limits to house price inflation. They say that if the stamp duty threshold had been raised in line with house price inflation since 1993 it would now stand at £210,000, instead of the current figure of £125,000.
Berkeley Chairman Roger Lewis to retire
Berkeley Group Chairman Roger Lewis has announced his intention to retire at the end of July, following 16 years on the board, eight as its Chairman. Roger was also Chairman of the HBF Planning-gain Supplement Working Group.
Lewis will stay on for 12 months in a consultative capacity, as Victoria Mitchell, currently a Non-Executive Director and Chairman of the Consultative Committee, will succeed Lewis as a Non-Executive Chairman.
Rain fails to stop play in June's housing market
The latest figures released from Nationwide show house price growth in June:
House price growth bounced back in June, increasing by 1.1% during the month with the average price of a new home rising from £181,584 in May to £184,070.
Prices increasing more than twice as fast as last year, at the equivalent of £50 a day.
Rate of growth will slow in second half of year; forecast of 5-8% growth in 2007.
Gordon Brown's increased focus on housing is welcome, but the implications of any changes to buy-to-let taxation need to be carefully thought out.
Mortgage lending up - consumer debt down
Latest figures from British Bankers' Association have shown the following: -
May's gross mortgage lending of £19.7bn was 8% more than in May 2006. Though the highest level of new business since November, partly reflecting strong re-mortgaging activity, it follows the usual yearly pattern of stronger lending going into the summer months.
There were 204,800 mortgages approved (for all purposes) in May; just 2% more than in May 2006, with an aggregate value of £24.2bn. The average loan approved for house purchase was £157,100, some 13% higher than a year earlier.
Underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.8bn, well up both on April's increase (£5.1bn) and the recent average of £5.4bn. The annual growth in net mortgage lending continued to stay around 14%.
Credit card borrowing fell by £0.4bn (net) in the month, while borrowings on personal loans and overdrafts also fell, by £0.1bn. Spending on credit cards totalled £7,418mn in May; 3.4% less than in May 2006. After allowing for repayments and seasonal adjustment, underlying net lending decreased by £409mn.
Interest Rate Prospects
The Monetary Policy Committee narrowly avoided a further interest rate rise at its meeting on 7th June, with five members voting against a rise and four in favour of a rise. The minutes make clear there will be a further rise.
Members noted there had been some tentative signs of an easing in household spending and the housing market. However the Bank said house price inflation was higher in the first quarter than in the third quarter of last year in nearly every region of England and in the other countries of the UK.
As well as the persistent strength of house price inflation, the MPC noted a range of other factors signalling the need for higher rates. It said rapid money and credit growth posed a threat to inflation "that would need to be offset by a higher level of Bank Rate". Business investment was strong, the corporate sector was described as "buoyant and confident", the world economy was strong, oil prices had risen and goods price inflation was still high. The MPC believed "the balance of risks to the outlook for inflation was on the upside".
CBI reports second month of slower retail sales growth
Annual retail sales have grown more slowly than expected for a second month running and at a rate significantly below April's three-year high, according to the latest CBI Distributive Trades Survey. The poor weather during June contributed to a sharp annual fall in clothing sales. Household-related items also fared less well in this survey, with sales of durable goods - such as TVs and fridges falling year-on-year for the second month in a row. Furniture & carpet sales fell slightly and growth in hardware, china & DIY sales slowed. Over the year to July, overall sales volumes are expected to increase at a similar rate to this month.
Jo Weston