A weekly news summary covering all aspects of the house building industry from Pierre Willaims, available to members only.
Greenfield Housing Helps Wildlife
English Nature has called for the building of more new homes on greenfield sites to protect and enhance wildlife. It said new low-density housing would provide the habitat needed by much of the country’s wildlife. Talking of John Prescott’s proposed house building programme, a spokesman said: “The first thing you see on the news is an environmentalist standing in front of a piece of countryside saying we cannot concrete over it. When you actually look at what they are standing in front of, it is wall-to-wall arable intensive farmland with virtually no wildlife to speak of. If we get this right, it’s not just biodiversity that benefits. People can have larger gardens, more attractive surroundings and there will be less stress around because of the nicer environment.” Pierre Williams for HBF said: “This report is very refreshing - one of the first times we have heard the truth spoken. We want a balance between high and low density. The aspiration to live in a decent house with a garden hasn’t changed.” (All media)
“Official” Price Index Launched Today
The government’s long-awaited “official” monthly house price index has been launched today and puts the average UK house price, as of July, at £156,273 - up from £153,605 in June. It set annual house price inflation for July at 14.6%.
However, the index, published less than a week after the FT set up its own index, has come under immediate criticism from mortgage lenders and other market watchers for being three months out of date.
HBF Note: That the new index has been attacked by its commercial competitors comes as no surprise. Yes, the information is three months old but the data used is certainly the most comprehensive and factual - despite still not including cash purchases - and might help a genuine picture emerge out of the mass of indices that currently show annual inflation running anywhere between 9.1% (Rightmove) and 19.1% (Halifax)
(All media)
And…Prices Are Now Falling
As if deliberately targeting the new government index, Rightmove, the least optimistic of all indices, now says prices are falling across the country with the North no longer immune. It said prices fell nationally by 0.6% with a 2.8% drop in London; prices static in the South East and the previously most buoyant areas of the North and North West seeing their first, albeit small, drops. It said the more falls seen in future, the less “soft” the landing for the market would be. (Guardian, Mail, Telegraph, Times)
HBF Attacks North West Planning Moratorium
HBF has attacked the moratorium on new homes planning consents adopted by an increasing number of LPAs in the North West. Pierre Williams said the Government must take immediate action, adding that the misuse of revised Regional Planning Guidance that resulted in the spread of the moratorium was a surrender to nimbyism that would have serious social and economic consequences for the whole region. (BBC, trade press)
Prescott’s Drive Will Trample Small Firms
John Prescott’s regeneration drive will result in the decline of the small house builder says Bovis Chief Executive Malcolm Harris. He said house builders valued at less than £100m would have trouble raising the capital needed for major projects on Prescott’s Communities Plan and told Building magazine: “A lot of big regeneration projects are capital-intensive. If you were a bank, you would be happy to give capital to a large company where the project would be a small part of the portfolio, but if it was a small firm you would be worried it was the major part of its portfolio.” If Harris is proved right, he predicts more firms to be swallowed up through consolidation. (Building)
Merger Talk of Redrow and Bovis
The latest rumour stalking the stock market is of a merger of Bovis and Redrow. True or not, the talk has boosted both firms’ share price, bucking a rather negative trend in the wider industry sector over the course of the week. Malcolm Harris’ earlier comments in Building, talking of the need for more mergers as a response to Government planning policy, was boosted by the announcement of excellent interim results. The group reported a 10% rise in pre-tax profits and a 15% increase in its dividend. (Independent)
Buy-to-let Yields Increase
Yields on residential lettings have risen by 7.5% since April according to the latest buy-to-let survey from Paragon Mortgages. Average annual rental income is now £9,354 and has risen 3.3% during the past month. Meanwhile the price of the average BTL property, which was £119,587 in August, has risen a further 3.27% (Sunday Telegraph)
Sellers Packs Hit New Problems
The Government’s much-hyped “solution” to provide certainty to the home buying process - Home Information Packs (HIPS) - has hit serious problems during a three-month pilot. Around 40 agents testing the packs said the information in them seemed to put buyers off. One agent said: “The pack highlights problems that, even if minor, can come across as being worse than they actually are.” Two months ago a select committee expressed doubts both about the packs and the way they were tested. They are however, still on schedule to become mandatory in 2006. (Sunday Telegraph)
Teacher Homes Built on School Land
The head teacher of a Tunbridge Wells school who built a block of pre-fabricated affordable flats on the school’s grounds, appears to have paved the way for similar projects. Moat, the local housing association, has already signed up a deal with Kent County Council to build 100 more flats for teachers on similar sites throughout the county. The idea is expected to spread across the country. (Guardian)