A weekly news summary covering all aspects of the House Building Industry, from Pierre Williams
Housing Market Shows Signs of Recovery
Despite recording another slight fall in house prices during May, the Rics says confidence is returning to the market. The rate of price falls slowed last month and more surveyors are predicting sales to pick up in the near future. There is some evidence that the London market is showing signs of recovery and an expectation this will spread to the Home Counties. However, other market watchers are not so sure. Cambridge Econometrics is forecasting a 10% fall in prices by the year’s end as the extent of the rapid decline in first time buyers starts to make itself felt. (all media)
Chancellor Looks to Denmark for Market Stability
A Treasury review of how to achieve housing market stability is studying the Danish mortgage market for inspiration. Professor David Miles, who is heading the review, is considering ways of encouraging lenders to offer long-term fix rate deals which also offer minimum exit penalties. Such a scheme would need the backing of a government-sponsored company – as in Denmark. This is likely to interest the Chancellor who has been searching for a way of getting fixed but competitive rates. (FT)
McCarthy Takeover Approach Cheers Sector
News of a potential bid for McCarthy & Stone has not only boosted its share price but those of other major house builders too. Taylor Woodrow, Barratt, George Wimpey, Wilson Connolly and Bovis all saw gains as investors speculated on a new round of consolidation. In a comment piece, the Times praised McCarthy for having the right credentials and expertise – an aptitude for successful high-density brownfield development coupled with knowledge of how to use social housing to secure planning permission. (Times, FT, Independent)
Drop in Inflation Raises Rate Cut Hopes
A steep drop in the new harmonised European (HICP) measure of the UK’s inflation rate has fuelled expectations of a cut in interest rates. Using the existing RPIX index, which excludes mortgage payments, Britain’s inflation rate stayed above the Chancellor’s 2.5% target. The Bank of England now has to decide whether to use the new way of measuring inflation as an excuse to lower rates. (Times)
Liverpool to Boom as European Capital of Culture
Within hours of being announced European Capital of Culture, Liverpool saw prices of city centre flats jump by up to 15%. With the city now being seen as on the cusp of a new era of trendiness, property investors are getting excited. Quite apart from its new culture status, the city has been experiencing a considerable boom. In 1995, 31 properties were sold in the city centre. By last year this had jumped to 668. Its new enhanced status can only help that trend. (Guardian)
Please Note: HBF Weekly News Summary returns on July 2
Pierre Williams
House Builders Federation
June 18, 2003