A weekly news summary covering all aspects of the house building industry from Pierre Williams, available to members only.
Mortgage Lending Soars to New Record
New figures show mortgage lending jumped 12% to reach a new peak of 25 billion last month prompting the Bank of England to warn that the borrowing spree was unsustainable. Analysts are increasingly worried that consumers will be hit hard if the Bank is forced to raise rates, although there is little sign of it doing so in the foreseeable future. (All media)
Sellers Gain Upper Hand as Buyers Return
A shortage of homes on the market has given sellers the upper hand according to the latest survey from the Rics. The feared collapse in prices has receded as a result. More surveyors have reported a rise in buyer enquiries with interest higher in all regions apart from the midlands. A large majority of surveyors expect prices to continue rising over the next three months, despite prices being at a standstill at the moment. Pierre Williams for HBF said: The real problem is undersupply, the cumulative effect of local authorities who say We need more housing but not here. Martin Ellis for the Halifax, said: The shortage of housing has added fuel to it all. There hasnt been a supply-side response, mainly because of planning constraints. Increasing supply of housing is a policy we would definitely be in favour of but it would take a long time to feed through. (All media)
RICS Calls for More Housebuilding but Condemns Landbanking
Thousands of Britons have been relegated to a housing underclass as housing undersupply has stopped them buying their own homes, the Rics has told the Kate Barker Review on housing supply. The organisation called for more affordable housing as the solution and, while accepting commercial constraints had an effect, blamed house builders for exacerbating the problem through landbanking. (Guardian)
HBF Note: The comment on landbanking was not supported by any evidence which HBF understands will be forthcoming in a London Residential Report published at the end of the month.
Government Betrays Homeowners
Rocketing Council Tax bills, a doubling of estates subject to Inheritance Tax because of rising house prices since Labour came to power, together with Stamp Duty increases, has been branded a betrayal of the middle classes by much of the media. Despite the increase, the Inland Revenue said Inheritance Tax affected only around 5% of the UKs estates and pointed out that the exemption threshold was still above the average house price. (All media)
Thames Gateways Limited Scope
A report for the Office of the Deputy Prime Minister suggests that the Thames Gateway project will fail to deliver as many new homes as the Government hopes. The report by Roger Tym and Partners and Llewelyn Davies, said the Gateway could realise 120,000 homes by 2016 rather than the 158,500 expected by the Government. (Times)
US Housebuilding Reaches 17-Year High
New house building in the US has reached a 17-year peak of 1.87 million despite rapidly rising mortgage rates. The results have surprised analysts who had been expecting a decline in completions. HBFs American equivalent, the National Association of Home Builders, said according to its figures, the rise in mortgage rates had stimulated home buying. (FT)
Critics Blast ODPM Housing Statistics
The latest figures from the ODPM showing a slight increase in home starts should not be taken as an improvement in the housing crisis. HBF and the Liberal Democrats said that due to the high rate of household growth, the marginal improvement in numbers was still failing to close the gap between supply and demand. Lib Dem Shadow ODPM secretary Edward Davey, said: Despite the rhetoric from the Deputy Prime Minister, his goals are a long way off. Pierre Williams for HBF, said: The notion that a couple of thousand extra completions helps things is a complete fallacy. We need 230,000 a year just to stand still. (Trade press)
Prices Double in Seaside Boom
Seaside resorts have become the new property hotspots with prices having increased by up to 103% in the past two years - more than three times the national average. The rises have been fuelled by the rush for second homes and because of city-dwellers downsizing to the seaside. The boom shows no sign of abating with plenty of people aspiring to a life on the coast. The biggest increase has been Padstow, (103%) according to a new Halifax survey. But others have also fared well including Penzance (83%) Pwllheli (85%) Sandwich (74%) and Brancaster (74%) (Sunday Times)
Long Predicted Slump May Never Happen
Doomsday predictions for the housing market by Prof Andrew Oswald of Warwick University, the firm Capital Economics and even the International Monetary Fund, are all likely to prove false, according to the Sunday Times. The decline in London is levelling out while all northern regions and Wales are still seeing prices rise. Low levels of house building and an economy that continues to perform reasonably should underpin prices. (Sunday Times)
Housebuilders Strengthen FTSE
The FTSE has been buoyed by the house building sector with Crest Nicholson, Berkeley, Bellway and Westbury all seeing share price growth. Crests takeover speculation by Heron lifted prices by 4.1%. Berkeley added 2.5% to 863p, Bellway was up 2.2% and Westbury up 2%. In a separate editorial, the FT questions whether consolidation in the sector is a good idea given concerns over the state of the housing market but concludes that acquisitions are not over yet. One analyst said an acquisitive firm had three possible opportunities in the current market: spotting cheap opportunities to buy a land bank; increase scale of operations, or that its potential buyout had an expertise in a certain field. Some analysts believe all companies outside the top four are potential bid targets. (FT)
Persimmon Perks Up
Persimmon has beaten its own upwardly revised profit forecast. The company made 151.7 million in pre-tax profits in the six months to June with average prices having increased from 134,431 last year to 154,110. Group Chairman Duncan Davidson, said: The market has resumed a more normal trading pattern and we are continuing to achieve price growth in all markets apart from London. (Standard)
Tokyo Nimbies Tackle Towers
Nimby Tokyo residents are threatening the success of prime minister Junichiro Koizumis urban renaissance by launching legal action against what they see as buildings that interfere with and destroy the natural landscape Helped by confusing planning zoning laws, residents triumphed in a landmark case in December when the Tokyo District Court ordered a condominium developer to remove the top floors of a tower complex after ruling it had destroyed the local scenery. The company was also ordered to pay compensation to local residents. More cases have now been started against other high rises for blocking out sunlight. (FT)