A weekly news summary covering all aspects of the house building industry from Pierre Williams, available to members only.
Booming Barratt Shuns “Too Expensive” Acquisitions”
Housing shortages and cheap mortgages have helped Barratt achieve a 31% jump in pre-tax full-year profits to £288m. The future looks equally rosy with record forward sales of £800m. The company said: “We have an unrivalled track record in the industry and we are in a good position to continue our growth. The market across the country remains sound and sufficient.” Completions rose 9% during the year with a strong brownfield performance. It was Barratt’s eleventh consecutive year of growth, a result helped, according to CEO David Pretty, by the decision not to get involved in the expensive sector consolidation but instead go for organic growth and favour oven-ready sites. (All media)
“Four-Homes Prescott” Battles to Keep Flat
Despite having a selection of four homes to choose from, John Prescott is refusing to vacate a union flat he rents for a fraction of normal market rent. Ironically, union bosses want Prescott out as the site has been allocated for affordable homes. But despite being the Minister in charge of planning and a strong advocate for more affordable housing, he refuses to budge from the flat owned by the RMT, which has now started legal action to evict him. Union leaders are baffled, especially as they have offered Mr Prescott another nearby flat so that re-development of the site can go ahead. A union official said: “We’ve no idea why he’s doing this. You’re asking us to get into the mind of John Prescott – but that’s rather difficult.” (Times, Guardian)
Buy-to-Let Investors Still Keen
Buy-to-let investors are still flooding into the market despite stalling prices, according to figures from the CML. The money lent to landlords jumped to £7.7bn in the first half of the year – up from £6.7bn during the previous six months. The average loan also rose from £94,000 to £102,000. According to the CML, investors still see residential property as a safer haven than the stock market (FT, Sunday Times)
HBF Note: Although not mentioned by CML the recent recovery in lettings market prompted by the absence of FTBs has no doubt helped encourage the BTL market
Labour Plans Tax on Rural Housebuilding
Planning permissions for greenfield housing could be hit by a new Government windfall tax. Ministers are considering taking a portion of the huge rise in land values that follow the granting of planning permission. It is thought that Kate Barker will recommend such a tax when she publishes her report on the reasons for housing undersupply next month. However, it is also thought the government will do everything in its power to boost housebuilding. This is likely to result in more of a “central command” approach to planning – an issue fraught with danger as local authorities fight back against a reduction in their powers. (Guardian)
House Price growth at 18-Month Low
House prices rose just 1% last month – the lowest rate for 18 months – according to the Nationwide. But evidence is emerging that momentum is once again returning, with an increase in sales. However, this increase in sales is not translating into increased prices and the bank expects growth to have slowed to 13% by the end of the year and says this could even slow down to zero in some areas over the next two years. This view is echoed by the Bank of England, which added that the price slowdown in the South East would not necessarily follow in the North. As expected, the latest Nationwide figures show the North has done much better than the South, with annual growth for the third quarter at 31.6%. Yorkshire and Humberside grew by 28.7% over the same period, while prices in the Wirral and Oldham have leapt by as much as 40% over the year. (All media)
Labour’s “New Deal” for Cities Flops
A £2bn Government flagship scheme to fund inner city regeneration has been branded a flop after allegations of mismanagement, waste and nepotism. The New Deal for Communities, set up four years ago by Gordon Brown and John Prescott, was geared to distributing regeneration funds to local boards for rejuvenation of sink estates. However, clashes between board members on how to spend the money and allegations of serious mismanagement have forced the Government to suspend three of the boards. Shadow Local Government Minister, Eric Pickles, said: “This is yet another example of a much-hyped Labour project that has proved to be all spin and no delivery.” (Sunday Telegraph)
Dorset Tops Price Hike League
According to the Halifax, Dorset has topped the house price inflation league over the past 10 years with a 218% rise. This compares to a UK average of 138%. A surprise leader is County Armagh which recorded the third-strongest growth in the UK. (FT, Express, Times, Guardian, Mail)
1,600 New Homes for Key Workers
Some 60 sites in the South East owned by English Partnerships have this week been selected for the fast-track building of 1,600 affordable homes using pre-fabrication techniques. The first of these could be ready in spring. The scheme is also aimed at encouraging the housebuilding industry to embrace pre-fabrication so that the government’s big housebuilding programme for the South East can become a reality. (Guardian)
Urban Exodus
People are continuing to leave Britain’s cities in their desire to live in the countryside according to the latest national statistics. Last year, Manchester, Birmingham and Bradford saw substantial net outward migration. Rural areas seeing the greatest inward migration included Lincolnshire, Cornwall, Norfolk, Dorset and Devon. (Mirror)
South East Must “Build Itself Out of Crisis”
The South East needs 250,000 new homes every year for the next decade if it is to effectively tackle its housing shortage. An HBF supported TCPA report launched this week called for a re-balancing of the debate on housing. The report, Home Truths, said: “It is time that the interests of those who need housing are put on the agenda alongside the views of those who are already well-housed.” (Trade press)