A weekly news summary covering all aspects of the house building industry from Pierre Willaims, available to members only.
Tories Ridicule “Communities Plan”
The Conservatives have promised, if elected, to complete a key element of the Thatcher revolution by allowing housing association tenants to buy their homes. The proceeds would be ploughed back into a housebuilding programme. The party also attacked the Communities Plan as “putting the cart before the horse”, insisting it was not possible to put developments in areas without tackling infrastructure needs first. Instead, the Tories would build “organically” on existing communities so housebuilding would take place where people wanted to live. Responding to restrictions already imposed on right-to-buy in London, shadow local government minister David Davis, said: “We will put a stop to Labour’s politics of envy to give tenants in London what is every tenants birthright.” The aim is to sell off 30,000 housing association properties per year providing cash for the building of 15,000 more. (Guardian)
Wimpey’s Bespoke Service to Homebuyers
Wimpey is to open a chain of Options Centres allowing customers to buy fittings to upgrade their homes. The move follows the success of a pilot scheme in Edinburgh that started in May. Since that time, average customer spend has soared from £5,500 to £10,500. CEO Peter Johnson said the aim was to sell homes for a basic price and then give buyers the option of chosen upgrades fitted before they moved in. (Independent, Express)
HBF Note: Good move by Wimpey. New homes surveys show buyers want a “blank canvas” which they can then fit out to their taste. From an industry point of view it must also help the fight to overcome the ‘identikit’ image.
Wimpey’s “Driving Force” to Retire
Keith Cushen, the man widely regarded as the driving force behind Wimpey UK, has decided to retire at the end of the year. The 56-year-old has been head of the UK division, which generates 80% of group profits, for three years. He has transformed the business with the acquisitions of McAlpine and Laing. CEO Peter Johnson said Finance Director Peter Redfern who had worked closely with Keith throughout the recent restructuring, would be his successor. The company has also appointed a former chairman of the Housing Corporation as a non-executive director. Mr Johnson explained: “As government policy has a growing impact on the industry, her experience will be of considerable value.” (Telegraph)
Builders Have “Held Back” on Prefabrication
Housebuilders’ preoccupation with reducing risk has held back the use of modern methods of construction. Kate Barker, the Bank of England economist looking at the reasons behind low levels of housebuilding, told the Housing Market Intelligence conference she was looking at ways to cut this perception of risk. She said both the planning system’s failures and market volatility were factors. Meanwhile, Housing Minister Keith Hill accused the industry of being sceptical about modern methods and also attacked landbanking. (FT)
HBF Note: The Barker review should provide firm evidence and views on both modern methods and claims of landbanking. Given the ceaseless coverage of the housing crisis and the government’s continuing failure to address it, perhaps ministers’ attempts to lay the blame elsewhere should come as no surprise.
nterest Rates On Hold
As expected, the Bank of England has kept base rates on hold at 3.5%. Weakening exports have added to analysts’ calls for rates to continue on hold until the long expected - but still absent - economic recovery materialises. However, the situation remains not if, but when, rates will rise. (All media)
Top Spot: Widnes
Widnes, the Cheshire town famous for its chemical plants, is now the UK’s number one property hotspot with prices rising by 68% over the past year. Its rise has been put down to its formerly very low prices, proximity to commutable cities including Manchester, and Cheshire postcode. (All media)
Country & Metropolitan Aims Low
Northern brownfield housebuilder Country & Metropolitan, which has announced a 72% increase in full-year pre-tax profits, is aiming to move into low-cost housing in the South East. The company said it would target the Thames Gateway. CEO Stephen Wicks, said: “We would like to go against the trend and push selling prices lower. There has never been a time when affordability has been so stretched in the South East.” (Times)
Halifax - Prices Up 19%
The Halifax claims prices across the country have risen 19% over the past year - putting paid to fears of an imminent crash. The bank says that, as expected, rises have been greatest in the North. But it also claims London and the South East are recovering, with Greater London prices up an average 8.6% and strong performances in Kent, East Sussex and the Isle of Wight. (All media)
God Bless America
John Prescott has found inspiration for his housing plans from the new town of Seaside, Florida. Following a two-day walkabout of the town, Prescott told its planners he would like to import some of its concepts to England - a statement that confused the town’s founder, Robert Davis, who said: “It is remarkable that a country we think of as having more efficient planning legislation would look to America for techniques that improve the quality of the built environment.” (Guardian)