A weekly news summary covering all aspects of the House Building Industry, from Pierre Williams
House Prices Fall at Their Fastest Rate for 8 Years
House prices fell at their fastest rate for eight years in April but there are clear signs that confidence is returning to the market says the RICS. In all 31% more surveyors reported price falls than increases. At the same time, the latest Hometrack survey said the boom is definitely over with average prices falling 0.1% in May - the third successive month of static or falling prices. But leading commentators continue to claim there is little risk of any significant downturn. (FT, BBC News)
Housing Affordability Crisis Spreads from London to South West
Serious problems getting a foot on the housing ladder have spread right across the entire south of the country according to a Joseph Rowntree Foundation report. The South West has been most affected with the disparity between prices and earnings now making it the least affordable area outside London. In North Cornwall the average price of a three-bed semi is 160,000 while average earnings are just 18,744. Other areas where prices of smaller homes are five times or more average salaries include East Dorset, the Cotswolds, Torbay, Salisbury and north Devon. The author of the report entitled Can Work - Cant Buy says that as a result of these findings, the sustainable communities plan needs rethinking. (All media)
Stamp Duty is Crippling the Market
The rebound in the market has been strongly focussed on regions where there is the greatest proportion of zero rated Stamp Duty housing - dwellings under 60,000. This has prompted speculation that Stamp Duty increases are to blame for the failing upper end of the market, although the increasing lack of affordability is almost certainly as much to blame. (All media)
St George to Build Londons First Train Station for Decades
The Strategic Rail Authority has approved St Georges plans to build a new rail station at Imperial Wharf. The huge project should deliver 18,000 homes, leisure and office space. St George will put up 1.75m to build the station although it will ultimately belong to Network Rail as owner of the land and operator of the train services. The building of the station was a S106 condition for the development. (FT)
Re-Mortgaging Surge
Mortgage lending surged to its highest level in April since October last year. But 51% of it was for re-mortgaging while loans for purchases only inched upwards from March to April. The CML said all this was further evidence of the gradual cooling of the market. (Express)
Prescotts Strategy Doomed to Fail
A key seminar headed by Professor Michael Ball of the Society of Property Researchers has concluded that John Prescotts Communities Plan is doomed to failure and that the Nimby thing is spreading. The society also poured scorn on the Chancellors hopes that long term fixed rate mortgages would end the boom/bust cycle of the market. The Communities Plan of concentrating development in particular areas would simply reduce supply where demand was greatest - pushing up prices in these areas still further. Its about the politics of the local environment. The Nimby thing is spreading, said Prof Ball. (Times)
Home Working Soars
The number of people working from home has increased by 65% since 1996 to more than one million and is likely to increase even more rapidly. A report from the Work Foundation says working from home boosts productivity, benefits local economies and has other major social and environmental benefits. The trend is certain to increase demand for live-work units and family homes spacious enough to allow for an office or study. (Times)
Fosters Whole Town Tower Blocks
Architect Norman Foster has again promoted his idea for tower blocks three times the height of Canary Wharf to house up to 55,000 people. They would be designed as self-contained cities in the sky encompassing a wide variety of flats from starter homes to sprawling properties for the super-rich. However, rival architects have said such ideas are not possible in a country where a house is a castle and the garden is king. HBF said: People should be free to choose what sort of properties they want to live in. (Sunday Times)
Singletons Make up for Lack of First Time Buyers
The number of first time buyers is continuing to fall and their average age is increasing with just 14% under 25. However the impact this has on the market is being offset by the number of people choosing to buy alone. In London, more than 50% of sales are to singletons and this is a trend expected to spread across the country. (Express)
Phone Masts Knock Sales
Anecdotal evidence suggests close proximity of mobile phone masts can knock between 15 - 25% off the value of a home. The number of campaigns against the spread of these masts is increasing and for the first time a group of residents has won compensation from a local council after a mast was put up in their street. Campaigners have hailed this as a landmark judgement and a flood of similar claims is now expected. (Observer)
Central London Land Values set to Fall
Central London landbanks recently acquired by housebuilders are set to fall in value according to research by Seymour Pierce which says a 5% fall in house prices would equate to a 20% reduction in land prices. By its reckoning, developers with big exposure to the London market could be forced to write down some of their land stocks and work in progress if the slight falls in the market worsen to a slump. (EG)
Electricity Shortage Could Halt Thames Gateway
There is not enough electricity capacity to supply the 200,000 homes proposed for the Thames Gateway. Developers are struggling to strike affordable deals with suppliers who are baulking at the cost of putting the necessary infrastructure. A spokesman for the Thames Gateway London Partnership said: We need to reassure suppliers that they wont be left holding the baby after such a large capital investment. Sewage, water and gas will all face similar problems. (Housing Today)
Pierre Williams
House Builders Federation
May 27, 2003