Friday, 25 June 2010 - "Shapps: HCA to escape axe"

A worried man? HCA chief executive Sir Bob Kerslake.

The following excerpts from Jamie Carpenter's, article for, 25 June 2010, give more details about Grant Shapp's plans to streamline the HCA, and place it under local authority. 

Shapps said that the HCA will be "much leaner" and that he saw the agency’s future as an "enabling and investment body".
Shapps told delegates: "I can confirm that the HCA will stay. But I think it needs to operate in a genuinely local way – at the invitation of local people who want to improve their communities."
He added: "It will be smaller, more strategic – with the HCA’s functions being delivered under local leadership. It will be much leaner."
Shapp's announcement clearly shows that the HCA is in for a drastic upheaval,  supporting my earlier article, about the mounting issues awaiting the coalition's Big Society approach to planning and home building. 

(Jamie Carpenters full article can be found here.)

Thursday, 24 June 2010

Big Society - Big Risk?

New plans to give local people more power over the number of homes built in their area, are causing concern among housing experts. The news comes at a time when household formation outstrips house-building, increasing life expectancy, and people remaining single, are all causing demand for social and affordable properties to grow rapidly. Although some accept that action is required, there remain serious questions regarding the short term viability of the proposals.

Public funding for affordable and social housing severely cut.  

The Homes and Communities Agency (HCA), which is tasked with channelling government money into social and regeneration projects, plays a vital role in keeping the housing industry ticking over. For instance, last year, almost three-quarters of housing projects started (64,800), were partially funded by the HCA. Already, cuts have seen the HCA's National Affordable Housing Programme's budget chopped by £230m, while the agency fears that another £610m will be lost from its budget this year. Compounding the issue, is a "three year spending review" of the HCA which due to commence shortly.

In funding housing developers to build affordable housing, the HCA has effectively propped up the industry. Councils, housing associations and private builders will be hard pushed to meet the required levels without this assistance. For instance, The National Housing Federation has already warned Housing Minister Grant Shapps, that the cuts could well see building rates drop by as mush as 65% to 1990 levels.

In light of this, it seems unrealistic to expect housing levels to increase, however that is exactly what the coalition government is hoping the private sector will facilitate.

Housing targets have dropped nationally.

Another element of contention, is the scrapping of house completion targets. The targets, which have been used to assess progress since the late 1950s, are to be replaced by councils deciding for themselves the level of building required in their areas. In essence councils will assume responsibility for setting out localised planning regimes.

However, the government's insistence on placing the burden of delivering the levels of housing needed, on councils raises serious questions. Many councils have seen their budgets slashed, either as the result of failed investments (Iceland anyone?), or as a consequence of Osborne's razor sharp budget. Adding to the conundrum, many authorities have insufficient planning capacity and knowledge to meet the rapidly growing demand.

Perhaps most worrying, is the omittance of a transitionary period for councils to adapt to the changes. The government's desire to abdicate its responsibility, to an unproven planning system is clearly an example of it's Big Society strategy, but this high-risk strategy comes at a time when the industry is still suffering one of the deepest crises in memory.

In summary, with a staggering housing shortage already affecting house prices and builders heavily reliant on state assistance, a delay in increasing production will undoubtedly exacerbate the situation further.

Friday, 18 June 2010

Council of Mortgage Lenders: Mortgage lending up 7%

Amongst all the doom and gloom surrounding the housing market, it's a welcome change to come across a positive news story!
The Council of Mortgage Lenders today issued a press release, showing a considerable increase in gross mortgage lending in the UK. Their figures show a 7% increase for the month of May compared to April, and 10% compared to May of last year.

According to the CML, the mortgage market remains subdued, with turnover marginally below the figures seen at the end of 2009, and gross lending slightly under the CML's forecast of £150 billion for 2010.

CML economist Paul Samter commented: "The ground has been cleared for next week's budget to be the start of an austerity drive to get the public finances onto a more sustainable footing. We do not expect it to include housing and mortgage specific direct tax measures. But the market will inevitably be affected by how policy impacts on the wider economy - particularly on household finances and confidence,".

Should the mortgage market stagnate and lending levels decline sharply, it will be interesting to see which tools the BoE employs from its array of newly gained powers, to regulate and possibly ration the mortgage market.

Thursday, 17 June 2010

"Google goes house-hunting"

Unabashed by recent controversy surrounding the amount of information it stores, Google yesterday unveiled its new property listing service. Adding a house-hunting function to Google Maps UK, it provides all the vital housing-hunting information such as statistics on rooms, distances to amenities, price and location.

The service allows users to select a location and view available properties in that area. Indicated by small circles on the map, properties can then be sorted by price, features and type of property. The feature works in tandem with Google Street View, giving house-hunters the ability to gain a sense of perspective on properties. 

Signifying their serious commitment to the move, Google launched the service with a number of high profile UK partners. Among them are Countrywide, the UK's largest estate agent, Sotherby's Inernational and Spicer and Harrt.  However, one notable absentee form the service is Rightmove, the UK's largest property portal. Unlike Rightmove, Google does not charge agents to appear online. Rather, it intends to generate revenue solely from advertising.

Perhaps the most interesting element of Google's new offering is the inclusion of private sellers. Although a number of small niche services offering this feature exist, Google Property is by far the largest player to date. With the likes of Spicer and Harrt and Tesco offering online estate agency, the trend of property sales moving away from traditional high-street estate agents appears to be growing.

George Osborne outlines plans to hand Bank of England new powers

In his first Mansion House speech, George Osborne outlined plans to give The Bank of England (BoE) far reaching new powers over Britain's financial system. In particular, the BoE will given the responsibility of overseeing the health of the housing market. Citing the easy availability of credit, 100%+ mortgages and low interest rates as key factors behind unsustainable house price increases, the chancellor of the exchequer argued that the BoE's new toolkit will enable it to avoid another housing bubble.

The BoE's new powers will also extend to curbing risky banking practices. This may well constrain the amounts which banks are able to loan to homebuyers, effectively allowing banks to place a cap on the amount homebuyers would be able to borrow. Full details of the new powers are to be unveiled in the emergency budget on the Tuesday 22nd June.

Sources: Channel 4 News | The Guardian

On a separate note - a big hello to newhomesinbirmingham a Birmingham-centric blog featuring all the latest news about housing developments in Birmingham.

Tuesday, 15 June 2010

New Home Prices See Growth In April

Department of Communities and Local Government House Price Index: 

According to the Department of Communities and Local Government's latest House Price Index, annual average house prices paid for new properties in April 2010 were 7.6 per cent higher than a year ago. This is a sizeable increase from the 1.3% increase seen in March. 

In the month to April, there was an increase of 5.6% in the price paid for new properties, a significant increase compared to April 2009 which saw a rise of 0.6%. Meanwhile the annual house price growth rate for pre-owned dwellings remained the same at 10.3 per cent in April, compared to March.

Monday, 14 June 2010

Shortage of Affordable Homes/ Worldwide Property Group: Buyers Still Confident

A new report from The National Housing Federation (NHF) has suggested that the number of affordable homes being built this year could decline by as much 65%.

Changes to the planning system combined with funding cuts could result in as few as 21,000 homes being built. Housing Minister Grant Shapps, warned last week that up to 150 social housing projects were in danger, due to a £610m "black hole" in the government's finances.

In light of their findings, the NHF has contacted housing Minister Grant Shapps to urge the government to honour its spending commitments on new housing developments. The NHF's chief executive David Orr, warned: "The building of affordable homes could potentially grind to a halt this year - with all housebuilding, including private developer construction, falling off a cliff."

However, Shapps responded: "Houses cannot be built by targets that don't work with money that doesn't exist." Instead, he argued that the government is planning to create incentives for new developments, while as part of the Big Society vision, communities would be able to "develop their own vision" for what building would benefit their local area most.

Housebuilders, in both the private and public sectors, have suffered badly during the property market's recession lead slump. The last three years have seen a steady decline in the numbers of homes being built, especially in high demand areas such as London and the South. A preference over the last five years for building flats and apartments, more suited to by-to-let investments rather than new home owners, has further worsened the situation.

Despite the seemingly constant stream of gloom and doom, a new report from Worldwide Property Group, claims that buyer confidence remains high. In the May survey, 84% of respondents felt that the current time was a great time to buy property in the UK, whilst 68% felt that now is also a good time to consider overseas property purchases, with 53% considering purchasing a foreign property. Areas favoured by those looking to buy abroad include the US, Caribbean, Turkey and Spain.  

Interestingly, only 6% said that they expect the UK house prices to fall in the next year, with 61% saying that they were buoyed by historically low interest rates and 49% citing low rates as their motivation to buy UK property.

Given last weeks mixed figures from the various House Price Indices, with one actually showing a slight fall in house prices, and the continuing fall in the strength of the pound, it would be interesting to see if the Worldwide Property Group survey returns similar results this month!

Thursday, 10 June 2010

Low Carbon Building Programme (LCBP) Closed To New Applicants

The Department of Energy and Climate Change (DECC) has announced that it will be closing the  Low Carbon Building Programme, to new applicants. Introduced by the labour government, to date the programme has provided over 20,000 grants, with over half going to applicants seeking to install Microgeneration equipment. 

Citing government cuts of £6 billion to departmental spending over the next year, as the reason behind the move, The Department of Energy and Climate Change has reassured members that outstanding agreements will be honoured.
Meanwhile, it is hoped that £3 million will be saved by immediately closing the programme to new applicants, with further savings being achieved over the course of the year by cutting or slowing down planned expenditure.

Given the challenging and costly agenda of developing renewable heat and decarbonising the heating sector,  the cuts are a serious blow to advocates of green technology.

Tuesday, 8 June 2010

Useful Online Tools for Home Buyers

Whether you are moving to a new home or looking to buy a second home, choosing the ideal location can be an overwhelming task. Fortunately, with the advent of "media rich" websites, house hunters have a wealth of tools at there disposal to make the job less stressful. This post will cover some of the key tools available for house hunting online.

When starting out it's key to remember that one of the most important factors determining a home's value, is the area it's in. Building a profile of the area, based on social and economical indicators, makes it easier to identify suitable neighbourhoods. Indicators include crime rates, school performance, and the provision of amenities and transport links. Additional aspects to check include school catchment areas and flood planes. For example, even if your offspring are outside of school age, its a no-brainer to check where school catchment areas cover, as they typically push prices up. The following sites help users to gain a perspective of possible areas, using a variety of approaches.

1) The Land Registry

Aside from publishing a monthly average house price index (HPI), The Land Registry (TLR) also issues information on singular sales. Completion figures for all properties sold in England and Wales since January 1995 are available here. Got your eye on a specific property and want to know how much it last sold for, and the extent to which the area's been affected by the recession? The Land Registry has the details!

Alternatively, sites such as and offer a free basic price search function!


The Government owned Oneplace site compiles information on crime, education, the environment, health and housing in individual assessments of 152 areas across England. Information gathered by six different inspectorates, is used to rate various indicators for each area on a performance scale of 1 to 4. It's a useful service if you want to compare your current area with surrounding areas or the national average.

3) Environment Agency Information

As mentioned above, it's a good idea to check if an area is vulnerable to any environmental factors. Handily, the Environment Agency provides maps indicating areas at risk of flooding, as well as a number of other maps illustrating local environmental factors such as landfill locations and pollution rates.

4) Google Street View

Arguably the most innovative and indispensable tool available to house hunters is Google's Street View. Offering a 360-degree navigable mosaic, Street View enables you to see a location as if you are there in person. Originally launched in March 2009, as of March 2010 Google Street View covers the majority of the UK from Shetland to Penzance.

5) Housing Portals
Once you've identified a possible area,  housing portals such as are a good next step. Offering details of existing and upcoming properties as well as contact details for developers and estate agents, property portals are now a  key resource when house hunting. Some sites now also offer mobile phone applications for searching properties on the go.

The tools mentioned above are not an exhaustive list, but an introduction as to what's available online. Whilst there is no substitute for sampling your chosen area in person, these tools make drawing up a short list all that much easier.

Thursday, 3 June 2010

HIP's demise the leading cause for a surge in instructions?

Update 03/06/10: Following on from the Telegraph articles (see two posts below) purporting to show 30% increases in houses going to market as a result of HIP's being removed, it seemed prudent to examine other factors contributing to the aforementioned increase.

Firstly, Nationwide's chief economist, Martin Gahbauer has suggested one possible reason. He cites that a looming increase in Capital Gains Tax, has urged many to push for a quick sale to avoid any possible additional cost. Supporting his assertion, this article from the Guardian, published one day before HIP's demise, points to estate agents reporting a deluge of inquiries from landlords about the possibility of selling before the CGT rise is introduced. The proposed CGT increase would far outweigh the money saved by not having to produce a HIP, suggesting it may be a more influential factor, than has been widely acknowledged.

Furthermore, The Bank of England yesterday asserted that mortgage lending increased month on month by £0.5bn in April. This is a sizeable increase compared to the March rise of £0.2bn. Increased availability of mortgages, is likely another factor behind the increase in instructions.

Whilst the removal of HIP's may well have encouraged some to enter the housing market, as shown above there were other contributing factors, which arguably were more influential.

Disparity in UK house price figures from Nationwide, Halifax and The Land Registry

The guardian has collated figures released by the big three providers of Average House Price Indexes. Presented in an interactive graph, covering from Mar 2006 to the present day, it illustrates the variance in figures released by Halifax/Nationwide/The Land Registry.

The graph is updated with each new release of figures, and is often annotated with feature articles, helping to provide perspective on the numbers. For instance, Nationwide's latest figures suggest that Property market's gradual recovery have pushed prices to within 10% below of those prior to the recession.

The disparity between the figures is due to the differing methods used to compile the indexes. Whilst the Halifax and Nationwide calculate their figures based on properties they have agreed mortgages on, the Land Registry index is instead based on all completed sales for that time period.

Wednesday, 2 June 2010

Post HIP-fallout summary

Thirteen days ago, the Lib-Dem Conservative Coalition culled the HIP industry overnight. Thus far, the response from from estate agents has been overwhelmingly positive, with many citing a surge in the number of houses going to market. However, the ten thousand or so workers directly involved in the HIP industry have been left facing bleak and uncertain futures. Below is a brief selection of articles covering varying viewpoints of the fallout.

HIPs are history, but does that help the housing market?
An insightful article featured by My Introducer. It contends that the initial boost gained from the removal of HIP's may be short-lived, as structural, deep-rooted problems still affect the housing market's recovery.

Housing market benefits from scrapping of Hips
Nine days after the abolishment of HIP's, this article from the Telegraph details Countrywide Estate Agent's claim that they have seen a 34% rise in the number of instructions. Is this increase a post-election pick-up or all down to HIP's demise?

Given that Energy Performance Certificates will remain, many HIP's providers might be considering taking up roles as Domestic Energy Assessors (DEAs). Concerned by the likelihood of increased competition, this article from the Institute of Domestic Energy Assessors urges anyone considering training as a DEA to think again.