A weekly news summary covering all aspects of the house building industry from Pierre Williams, HBF's Head of Media, available to members only.
Truth Emerges From Treasurys CGT Shock
As expected, last weeks front page news that the Chancellor was planning to levy Capital Gains Tax on principal homes, looks to have been a plot to lessen the pain of a new increase in Stamp Duty. A storm of protest from the media prompted the Treasury to deny the possibility of CGT in the strongest possible terms, but it refused to rule out big Stamp Duty rises. Even if rises are not introduced, the number of homes falling into higher Stamp Duty brackets is rocketing as prices increase. (All media)
HBF Note: Industry will not welcome the news that the Chancellor is looking to collect more tax from homeowners but there is a growing consensus among economists that the market has been too good for too long and that an economic stitch in time might save a lot of pain later and help deliver the hoped-for soft landing
New Retail Boom Fuels Rate Rise
Interest rates or taxes - and probably both - will have to rise as the deficit in public finances continues to worsen. The hole in the Treasurys budget is 9bn higher than a year ago. An analysis by the Institute of Fiscal Studies found the Government was spending more than rising tax receipts could cover. The CBI has urged the Bank of England to resist a rate rise, warning that an early rise could choke off the hoped for recovery in the economy before it has even started. (All media)
Housebuilder Stocks Take a Knock
News on Wednesday last week that the Bank of Englands monetary Policy Committee is close to raising interest rates, prompted share price falls across the housebuilding sector. Persimmon fell 38p to 499p; Barratt 32p to 504p; George Wimpey lost 24p to 348p; Redrow was 16p lower at 302p and Bovis off 24p at 460p. Responding to the falls, HBF said that speculation of rate rises was nothing new and the narrow vote by the MPC of keeping rates on hold for now was probably prompted some profit taking. A stockbroker interviewed on the same program said he had capitalised on the falls as a great buying opportunity. (BBC R5, Telegraph, Guardian, Times)
Housebuilders Take Government to Court
Seven housebuilders have teamed up and taken the government to court over its plans for reduced housebuilding in the North West. George Wimpey, Redrow (Lancs), Redrow (North West), Linden, Westbury, Bloor and Morris, say regional planning guidance introduced by Prescott would cut the number of homes built in the region by 100,000 over the next 13 years. The seven want the High Court to quash a number of changes over which they say they should have been consulted but were not given the opportunity to do so. The draft guidance discussed at public examination last year calculated a need for 357,400 homes. But the final guidance introduced by Prescott lowered this to 256,000. Opening the case, Andrew Gilbart QC, said: The final RPG contains policies which are in a substantially different form from the policies in the draft. (EG)
House Price Indices Paint Confusing Picture
It depends who you believe. According to the Rics and the estate agents Hometrack index, the housing market sprung back to life in September with mortgage lending reaching a record high and renewed buyer confidence. The Council of Mortgage Lenders backed up the lending figures. However, according to more accurate but less recent figures from the Inland Revenue, the market has slowed to its weakest level in six years. In the three months to September, 369,000 homes changed hands - a fall of 27% over the same period a year ago. (All media)
Commercial Sector Eyes Up Housebuilding
Commercial developers will be forced to become housebuilders or lose out on major schemes, according to Estates Gazette. The Governments wish for more housing in the South East should make planning permission for housebuilding easier. But this will increase competition between commercial and residential developers. LandSec is already planning a move into residential. (EG)
Prescott Attacked at Better Buildings Conference
It wasnt what Prescott wanted from his Better Buildings conference. Instead of being able to trumpet his revolution of the housebuilding industry, the Deputy Prime Minister found the media more interested in wondering why, as champion of affordable housing, he has four homes of his own. Prescott reacted with fury, calling the veteran ITN reporter who raised the question, a silly girl and demanding to know why she was asking stupid questions. Not surprisingly, his angry response completely overshadowed other coverage of the conference. There was, however, some coverage in the Times and FT of Prescotts demands for more prefabricated housing to solve the shortage. Pierre Williams for HBF responded that the industry was keen but would be even keener if proposed changes to planning law provided some certainty that the homes would actually be granted planning permission. (ITN, Times, Mail, Guardian)
17,000 Key Workers Want to Leave London
More than 17,000 nurses and teachers a year want new jobs outside London because of the steep cost of housing, according to a new study by the Keep London Working group. Public services in the capital are worsening rapidly because the turnover of these staff has doubled in 10 years. About 9,500 out of Londons 45,000 nurses and 8,000 of its 58,000 teachers have decided they cannot stay in London under current circumstances. (FT)
Taylor Woodrows possible Sale of Docklands Development
Taylor Woodrow has started talks to sell its showpiece St Katherine Dock development for 300m, according to the Times. The company is said to have agreed terms with REIT Asset Management. (Times)
Thames Water Plans for South East Housing Growth
Thames Water is planning a 700m reservoir and a 100m desalination plant to increase water supply for the South Easts planned housing growth. The four square mile reservoir would be built in Oxfordshire. The desalination plant on the Thames estuary is only being planned as a contingency measure because the company believes it could take 20 years to get planning for the reservoir. (Guardian)