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NCC call for statutory protection for home buyers...... read
Report recommends South East builds 32,000 homes a year.....read
Land Registry report shows slow growth of property prices...... read
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Better protection urgently needed for UK new-build home buyers, says NCC
According to the National Consumer Council (NCC), consumers have more rights when they buy a kettle than a newly built home.
In a report responding to the Office of Fair Trading (OFT) market study into the home building industry, the NCC says many people face delays when moving in and have to pay for rented accommodation; others get poor after-sales service; and ninety per cent of people are left with snagging problems such as faulty wiring, badly fitting doors or leaking windows when they buy a new property.
The NCC report also claims that consumer satisfaction with new homes is on the decline with more than a quarter of new-build property developments rated ‘poor' quality (although this observation is apparently based on a reference to the CABE housing audit assessment of urban design rather than customer satisfaction data).
The NCC is calling for statutory protection, similar to the Sale of Goods Act 1979, to protect buyers when things go wrong. This they say should be coupled with the introduction of an OFT-approved Code of Conduct for builders and developers to give consumers clear information before contracts are signed. They also propose that the OFT should ensure completion dates are accurate and provide a user-friendly complaints procedure and call for a "fair contract" to be adopted industry-wide, including a definition of the completion date and a minimum period for resolving snagging issues.
View NCC press release and full report
HBF responds to National Consumer Council comments on consumer protection for new homes
In a statement responding to the NCC, Executive Chairman of the Home Builders Federation Stewart Baseley said:
"The NCC's claim that new homes buyers have no more protection than those buying a new kettle is simply wrong."
"New home buyers enjoy a ten-year warranty, which ensures high standards of quality, remedy for any problems covered by the warranty and formal dispute resolution procedures. This is not the case for people purchasing second-hand homes. In addition, all home buyers have the benefit of legal representation."
"HBF is committed to the development of an evolving, long-term and positive customer satisfaction strategy. The first stage has been to establish an extensive annual customer satisfaction survey for new housing and to promote a HBF customer service code of conduct and a set of model contract terms developed in discussions with the OFT."
HBF Media Coverage:
HBF Media Coverage in relation to the NCC report is as follows:
Radio 4 Today Programme Business News, 30th August
Radio 5 Wake up to Money, 30th August
Channel 4 lunchtime news, 30th August
Panel report recommends that the South East of England should build 32,000 homes a year until 2026
The South East Regional Spatial Strategy inquiry Panel Report has recommended a 10% increase to the Regional Assembly's proposals for housing supply to 32,000 new homes a year.
Six Strategic Development Areas are proposed to accommodate up to 5,000 new homes each. There are two in Hampshire at Fareham and Hedge End; two in Milton Keynes to the south west and south east (both are an endorsement of the MK2031 work); and the final two are in south Oxford and south Reading.
Assembly Chairman Cllr Keith Mitchell said:
"The South East is committed to maintaining its position as the UK's economic powerhouse and this report shows we can do that without the need for the massive levels of housebuilding proposed by Government."
The Panel Report largely supported the Assembly's views on the provision of affordable housing in saying that Government funding not mass building was needed to make housing more affordable.
HBF: South East RSS figures woefully inadequate to meet housing need
In a press statement responding to the Panel's recommendations, Stewart Baseley said:
"32,000 new homes per year will not go anywhere near meeting the clear housing need in the region. This is less than required to meet Government household growth projections. There is a clear need for 40,000 new homes per year to meet the accumulated and growing housing shortfall in the South East."
"Without sufficient homes, the social consequences for families in the region will be dire. With housing affordability already stretched to the limit, these woefully inadequate targets will mean more people than ever will be excluded from home ownership."
HBF has argued that to consistently provide the full range of housing needed by communities across the region, taking into account the backlog of previously unmet demand, requires a net addition of some 40,000 new homes a year.
HBF Media Coverage:
HBF Media Coverage in relation to the RSS is as follows:
Targets for south-east 'inadequate' Housebuilding Industry warning
The Financial Times, p2 30 August
Advisers tell Brown to curb building plans in South East
The Daily Telegraph, p11 30 August
Housing report sparks new row over green belt
The Times, p4 30 August
CPRE: South East housing threatens an unsustainable course
CPRE South East has expressed great concern over the recommended increase in housing numbers for the South East suggested in the Planning Inspectors' Report.
CPRE South East Director Edward Dawson said:
‘It is a huge challenge to provide 640,000 new homes in a region where the capacity of the environment is being stretched to the limit. There will be huge pressures on resources and infrastructure, such as water and transport, and large areas of valued countryside, including the internationally important Thames Basin Heaths, are under serious threat. We urge the Government not to accept the proposed increase in numbers.'
Shelter: The question is not whether we build these new homes but where and how quickly
Adam Sampson, Chief Executive of Shelter said:
"Every part of Britain desperately needs more homes, especially the South East where demand is far outstripping supply, leaving thousands homeless, in bad housing or struggling to get on to the housing ladder.
"Yes, we must build a sound infrastructure including roads, schools, hospitals and flood defences and drainage, to support new communities but the question must not be whether we build these new homes, but when, where and how quickly".
HBF response to OFT market study consultation document
We are currently preparing the draft HBF response to the Office of Fair Trading's consultation document for its market study of housebuilding - to be submitted by 7 September. Members can access the draft response via the link below. Please feed back any comments to HBF Director of Economic Affairs, John Stewart (john.stewart@hbf.co.uk), by first thing on Thursday 6 September at the latest to enable us to comply with the OFT submission deadline.
HBF meet with CITB to discuss grant scheme
Members of the HBF Careers, Skills and Training Committee met CITB-ConstructionSkills this week to discuss proposals for changes to the future structure and operation of CITB grant support for company training and skills development activity.
Against the background of the recent Housing Green Paper and CITB-ConstructionSkills' plans to further increase the total funding available for its grant schemes, ensuring that home builders' requirements are fully reflected in future grant arrangements will be important if the industry is to achieve a satisfactory return on and benefit for its levy payments.
If you would like more information about the proposals or to discuss this issue, please contact John Slaughter.
Financial market turmoil poses risks for the housing market says Nationwide
The latest figures from the Nationwide House Price Report show:
House prices are unlikely to be significantly hit by market turmoil in the short term
But dependence of UK economy on financial services poses a longer term risk
Unexpectedly low inflation and financial market unrest has reduced the risk of a Bank Rate rise to 6%
Commenting on the figures Fionnuala Earley, Nationwide's Chief Economist, said:
"The rate of house price growth lifted a little during August, but the annual rate continues to moderate. Prices increased by 0.6% during the month, but the annual rate fell to 9.6% down from 9.9% in July. A typical UK property cost an average of £183,898 in August, £16,177 more than one year ago.
Link to full Nationwide House Price Report
Land Registry report slow growth of property prices
House prices in England and Wales increased by 0.1 per cent in July - the lowest rate of growth since June 2006 in the Registry's series. It raises the average house price to £181,460.
London continues to lead the rest of the country in terms of house price growth with an increase of 1 per cent for the month, taking the average London house price to £342,936 in July.
The annual change in house prices is 8.8 per cent for England and Wales. In London, the figure is 15.5 per cent, showing that for the fourth month in a row the rate of increase for London house prices is approximately 6 per cent greater than that of England and Wales as a whole.
For the Land Registry's monthly House Price Index for July please click here
CML Market Commentary - September
The CML have released their latest market commentary for September. This shows that:
Over the past three weeks, financial markets have become more concerned about borrower defaults and credit losses in the US sub-prime mortgage market. Most of these loans have been packaged as mortgage backed securities (MBS) and sold to investors. And these investors will bear the credit losses. But a lot have been repackaged into collateralised debt obligations (CDOs) and distributed widely throughout the world's financial system. There is concern that some purchasers of these may not be fully aware of the assets that back them and of the degree to which these assets may be impaired.
Potential credit losses from US sub-prime lending are likely to be on a scale that is manageable by the world's financial institutions without major consequence. But uncertainty over where the losses are likely to be distributed has been an important factor weakening global stock markets and has made banks more cautious about to whom they lend and at what price.
The rate at which banks are prepared to lend to each other in the London money market for periods of up to fifteen months have risen sharply since the end of July. And spreads over Bank rate, which has remained unchanged at 5.75%, have widened. In the case of three month money, the spread is now around 0.75% compared with 0.2%.
Bank of England - Lending to individuals: July 2007
Latest figures from the Bank of England show:
The increase in total net lending to individuals in July (£10.3 billion) was in line with the increase in June. The twelve-month growth rate fell, by 0.1 percentage points to 10.1%. The three-month annualised growth rate increased by 0.2 percentage points to 9.5%.
Within the total, the increase in net lending secured on dwellings (£9.2 billion) was below the increase in June and the previous six-month average.
The twelve-month growth rate fell, by 0.2 percentage points to 11.0%. The three month annualised growth rate was unchanged from June at 10.2%. The number of loans approved for house purchase (115,000) and other purposes (72,000) were the same as in June; those for remortgaging (101,000) were lower than in June.
The increase in net consumer credit in July (£1.1 billion) was above the increase in June. Net credit card lending rose by £0.2 billion broadly in line with the June increase. Net other loans and advances rose by £0.9 billion, higher than in June. The annual growth rate of consumer credit was unchanged from June and May at 5.3% and the three month annualised growth rate increased by 1.2 percentage points to 5.7%.
Mortgage demand holding up, consumer credit subdued says BBA
British Banking Association has reported the following figures on mortgage lending and credit card borrowing:
July's gross mortgage lending of £21.3bn was 12% higher than last year. With annual house price inflation below this rate, the stronger figure reflects higher levels of re mortgaging activity in the month.
Underlying net mortgage lending (gross lending minus repayments and redemptions) rose by £5.7bn. Although this was higher than June's increase and the recent average (both £5.4bn), annual growth remained at around 14%.
There were 182,950 mortgages approved (for all purposes) in July with an aggregate value of £21.5bn. The average loan approved for house purchase was £156,900, some 13% higher than a year earlier.
Credit card borrowing fell by £0.1bn (net) in the month, while borrowing on personal loans and overdrafts rose by £0.2bn.
CBI: summer sales fail to reverse slowing growth in the High Street
According to the latest CBI Distributive Trades Survey, although retail sales increased over the year to August, as expected, the annual rate of growth was the weakest since November. The slowing in High Street demand has meant retailers are less able to push up prices. Following the strong acceleration in average selling prices in the last quarterly survey, the rate of growth has eased over the year to August and is now back in line with the long term average. Looking ahead, retailers expect sales growth to continue at a similar rate in September, and price inflation in the retail sector to soften further.
Jo Weston