A weekly news summary covering all aspects of the house building industry from Pierre Williams, HBF's Head of Media, available to members only.
Prospect of December Rate Rise Fading?
The likelihood of another rise in interest rates in December was initially receding with the Bank of England admitting it would “move cautiously” on the issue. There has been growing criticism from business that last month’s quarter-point rise was unnecessary given the slowdown in consumer spending and (as of last month) steadying of house prices. However, the latest figures already indicate that these claims of a slowdown may be premature, with new figures showing a renewed surge in consumer borrowing and mortgage approvals for home purchases rising to 123,000 - a 14-month high. (All media)
And…Prices Bounce Back in Pre-Christmas Surge
The housing market has bounced back with figures from the Hometrack index indicating a 0.4% increase in average prices during October. The survey also claims that for the first time in 15 months no price falls were recorded anywhere in England and Wales except for tiny falls in Southampton and Swindon. The North and especially Cumbria, recorded strong growth while London and the South East also bucked recent trends with growth of 0.4% and 0.3% respectively. More worryingly, however, the proportion of first time buyers has fallen further to just 10%. Consumer confidence in the housing market also reportedly down and, according to the Rics, sales volumes are sharply down by more than 11% on the same period last year. (Times, Express, FT, trade press)
Brown Insists Economy is On Track
The Chancellor has appeared to rule out any further tax rises in the near future, insisting that the Government is on course to meet its fiscal rules. Gordon Brown did, however, give a clear signal that the Bank of England had his approval to raise interest rates any time it felt the need to do so in order to keep inflation on track. (All media)
HBF Warns on One-Size-Fits-All Policy
HBF says housebuilders have embraced the Government’s ambition to improve design and quality and are keen to turn the vision of sustainable communities into reality. However, it believes the notion that good design can only be achieved with high density is wrong and that true sustainability will only be achieved with a broad mix of housing types. Pierre Williams for HBF said: “We should have learned from the past that one size of housing does not fit all. People aspire to having a family home with a garden and we cannot ignore that.” (BBC R4, Independent)
London Bridge Tower Approved
The long-planned 1,000ft London Bridge tower has finally been granted planning permission. With construction due to start in 2005 and completion in 2009, the tapering glass tower will be Europe’s tallest building and comprise of offices, a hotel and residential units. John Prescott granted permission after a six-month inquiry that saw strong opposition from English Heritage. (All media)
Boom is Over Says Savills
Making a fortune from buying property is no longer a foolproof route to riches, says FPDSavills. The company said the boom was finally coming to an end and predicted prices would increase by just 4% next year - compared to the 53% leap in prices over the past three years. Savills also predicted still slower growth in the future with rises of 2.5% in 2005 and 3.5% in 2006. Savills’ Head of Research, Richard Donnell, said the market was entering a “low-growth phase that could last several years” and predicted the best performance from the top end of the market and for the North to outperform the South. (Telegraph)
Gazumping Returns to London
Backing up comments made by Savills is the re-emergence of gazumping at the middle to top end of the market in London. A shortage of homes available in the £600,000 to £700,000 bracket is to blame. This in turn is causing an increasing number of those living in £400,000 to £500,000 homes to hold off putting their homes on the market as their efforts to move up are thwarted. (Times, Guardian, Independent)
Safe Areas Command £30,000 Premium
Home buyers are paying a premium of about £30,000 to live in safer neighbourhoods according to a new report based on government figures. The research by an Internet mapping site suggests properties in low crime areas cost an average £32,700 more than their crime-rife equivalents. However, if London is taken out of the equation, the difference is much greater, with average prices a massive £63,800 higher in safer areas. The website, www.upmystreet.com, has now produced a table of locations showing the best and worst locations on a crime/house price basis. (Telegraph)
Leeds - The Best Place to Live in UK
Leeds has the most contented city dwellers in Britain, according to a new survey. Its residents have the most balanced quality of life, followed by those in Birmingham, Liverpool, Manchester and Sheffield. London, however, manages to hang onto sixth place. The detailed study by Henley Management College looked at the work and leisure time of more than 1,000 people across eight cities and took into account their views on issues ranging from public transport to street cleanliness and entertainment choice. (Independent)
Prescott Unveils Gateway Scheme
John Prescott has outlined plans to build up to 11,000 homes in Barking Reach set off by a partnership between Bellway and English Partnerships. This will effectively be the first public/private partnership of its kind. Prescott made the announcement during a speech launching the government’s new “urban code” which entails the setting of strict design criteria that planners and developers will sign up to achieve consistent, high-quality design in larger developments. The intention is that with prior knowledge by both local authority and developer of what can be expected of new development, the granting of planning permission will be speeded up. (Independent, FT)
Property is The New Pension
A new survey reveals that property ownership is overtaking other traditional forms of pension saving. While 27% of respondents favoured a company pension, 40% said they saw bricks and mortar as the best route to funding a comfortable retirement and just 15% thought the government’s stakeholder scheme was the most attractive deal. The survey suggests Britons feel “cheated” by the string of pensions and endowment scandals together with poor stockmarket performance. In particular, those aged 25 to 34 are putting their spare cash into the housing market, despite warnings from some financial commentators that continued buoyancy of the market is far from certain. (Mail)