showhouse.co.uk offers free adverts to redundant housebuilders

“The slump in the new homes market has seen a lot of outstanding industry professionals lose their jobs. Individuals, looking for new jobs and opportunities in the housebuilding sector and its ancillary services, can, subject to content being approved by Show House, list their credentials for free online at www.showhouse.co.uk," said Rupert Bates, editorial director of Show House.

Please send your advertisement together with your name, email and contact telephone number to at@globespanmedia.com. If you have any industry friends or former colleagues out of work who do not receive our newsletter please forward this opportunity.

OFT to demand housebuilders sign code
Housebuilders will be forced to sign up to a code of conduct for dealing with customer complaints following an OFT investigation.

But the really good news is that year-long inquiry into the housing industry, which is due to be published next week, will otherwise give the industry a clean bill of health.

The OFT launched the “market study” last summer to investigate continuing low customer satisfaction levels, and the industry’s failure to build enough to keep up with demand. In June, the OFT published a preliminary investigation that seemed to clear the industry of hoarding land to drive up prices. Now sources suggest the final report will find that the industry is not to blame for stubbornly low customer satisfaction.

The NHBC started to work on a code of conduct last November in response to fears that the OFT would impose an external regulator on the industry. The OFT is now set to endorse this code, which is likely to be policed by an independent company and financed by the industry.

One housing industry source said: “The hope is that the code can be introduced in early 2010. There is now a year to get the contractual details in place. Overall, it is a good outcome for the industry – the OFT looked at the disputes and decided harm to customers was negligible.”

This year’s industry customer satisfaction survey showed that 75 per cent of buyers were happy with the quality of their new home, a figure unchanged in the past three years.

SH Note: All in all, this is an excellent result – provided it comes to pass. 

House prices show sharpest monthly fall since 1992

The FT House Price Index has recorded a drop of 1.3 per cent in August, the single largest monthly fall since October 1992.

The decline marks the sixth consecutive monthly drop and mirrors the trend seen in the other major indices. But the year-on-year decline in house prices shown by the index – a drop of 2.2 per cent – is far more modest than that suggested by other indices. According to the FT, house prices peaked in February 2008 and are currently four per cent below that.

However, the data is broadly similar to the Land Registry which tends to lag the lenders’ indices. And because Land Registry data – a component used to calculate the FT Index – is reported on a lagged basis, there may be a difference in the time it takes to report changes in house prices.
 

“This takes the market average price back to where we were in May 2007,” said Peter Williams of Acadametrics, which compiles the Index on behalf of the FT. “This is not a problem for the vast majority of households – nor is it market transforming in affordability terms.”
 

The survey also shows that London continues to buck the trend, with average annual growth over the last three months of 1.8 per cent. The south east of England and the north also recorded modest rises in house prices over the last three months of 0.9 per cent respectively.
 

The region most hard hit by house price falls is Wales, were prices have eased by 3.7 per cent on average over the past three months, followed closely by East Midlands where the decline is 3.0 per cent over that time period.

SH Note: The FT says two per cent, Galliford Try (below) says 20 per cent. I know which I believe – and it isn’t the FT

House Prices Falling off a Cliff, says Galliford Try
Galliford Try has admitted prices of its new-builds have "fallen off a cliff", dropping 20 per cent since their peak in May last year.

The company said it managed to keep pre-tax profits steady at £60m by selling a large number of houses at the lower market price and increasing its emphasis on public sector housing. However, the shares fell almost five per cent – to 62p – on concerns about a gloomy outlook.

"Our hybrid model of construction and housebuilding is operationally working really well, but the share price is disappointing," finance director Frank Nelson said.

Chief executive Greg Fitzgerald said the company's quick reaction to the property slump had helped reduce debt, cut costs and save profits.

"While housebuilding has been affected by the severe downturn in the housing market, its effect has been mitigated by our early adoption of a policy of aggressive selling, our strengths in affordable housing and our concentration on managing our debt," he said.

The company said housing in London and the South East is still outperforming the rest of the UK.

New Fall in Mortgage Approvals
Mortgage lending has plunged to its lowest level in three years. New figures show that the amount advanced for mortgages had fallen by 36 per cent since this time last year. Just £21.8 billion was advanced during August, 12 per cent less than during July, according to the CML.

This is the lowest monthly sum lent since April 2005, and the lowest level for the traditionally busy month of August since 2002. Remortgaging has also been lower than anticipated.

CML director general Michael Coogan said: “These figures reflect the heightened uncertainty for both lenders and consumers in the mortgage market at present.” 

Bank of England cannot save mortgage market, warns Mervyn King
Britain's stricken mortgage lenders cannot rely on the Bank of England to support them through the credit crisis, Governor Mervyn King has warned.

The warning will disappoint bankers who were hoping the BoE would intervene with funding to kick-start the mortgage-backed security markets, which have been effectively closed for 13 months.

Mr King said that although his plan to allow banks to swap newly-issued mortgages against liquid instruments would help, there would be a far stricter time limit on these swaps, preventing institutions from depending on the Bank for permanent support.

The new arrangement will kick into action when the special liquidity scheme (SLS), which is thought to have been used by banks for as much as £200bn worth of funding, closes on October 21.

Mr King also cautioned the government against guaranteeing mortgages, warning that this would put taxpayers' money directly at risk. His message will come as a disappointment for lenders, who had been hoping for an extension of the SLS. Instead, Mr King said the SLS had been a "one-off, exceptionally generous long-term facility" that will soon close.

"The objective of the new facility will be to provide short-term liquidity insurance to smooth the adjustment of financial institutions hit by unexpected shocks," Mr King said. "But it is not the purpose of central bank liquidity insurance to provide a source of long-term funding to the financial system – indeed it cannot do that. Only private savers or taxpayers via the government can provide such funds.

"So I hope everyone will understand that the proposals to be published next week, important though they are, will not and cannot solve the shortage of funding to finance bank lending, including mortgage lending."

Mr King will publish a consultation document on the new liquidity scheme next week. It will replace the so-called Red Book – the system the Bank previously followed in providing cash to City institutions.

SH Note: That’s the position King is holding for now. But with the chaos in global banking seen this week, anything could yet happen.

Big-Scale Unemployment: Coming Soon to the UK
Britons should brace themselves for a "horrible surprise" in unemployment this autumn, according to Monetary Policy Committee member David Blanchflower.

He warned that the jobless total could increase at a monthly rate of 60,000 from October onwards, taking the total unemployment level to 2m by the end of the year. He said: "My view certainly is that we are going to see a large increase in unemployment. The October numbers are going to start to see a big kick-through that will be an unpleasant shock."

SH Note:  Just why soaring unemployment should be a “surprise” is beyond me. It was obvious from the moment the market started to turn. The only surprise is that anyone in authority has had the guts to admit it…

BPF Launches Planning Manifesto
The British Property Federation has unveiled proposals to improve the town planning system which it has criticised as complex and expensive.

Its new Planning Manifesto proposes developers contribute resources to help local authorities deal with planning applications, and councillors receive formal training to enable them to take more informed decisions.

At the moment, only councils are allowed to contribute resources because of fears over issues of probity, and councillors receive no mandatory training.

Other suggested measures include reducing the information required to support planning applications, smaller applications being dealt with by planning 'technicians' – leaving qualified planners free for major schemes in communities – and councils outsourcing work to private consultants or forming partnerships.

Sue Willcox, chair of the BPF's planning committee, said: "We need to reform the way we work. We've seen examples of developers having to re-submit entire applications simply because of very minor changes. Councils demand far too much information out of fear of judicial review of decisions – this is something the government needs to amend. Ultimately, we need to stop trying to rewrite the system and concentrate on improving what we have."

Berkeley says housing market needs return of 'feel-good' factor
Berkeley Group says sales are 50 per cent below the "historical average”. However, it said it entered its current financial year – which began on May 1 – with forward sales of £1.2bn, a "well-bought" land bank, gearing of less than one per cent, that its performance for the six months to October 31 were in line with expectations, and that it was "confident of its ability" to maintain operating margins.

In June, when the company announced its full-year results, it was interpreted as calling the bottom of the residential land market by deciding to spend up to £360m on buying land rather than returning the cash to shareholders.

Berkeley confirmed that shareholders agreed with this strategy, which will see the final £3-per-share of a scheme of arrangement returned as a series of dividend payments and opportunistic share buy-backs with the target end-date deferred by three years to 2014. The company reaffirmed its desire to consider opportunities to buy land.

However, events in the US over the weekend may affect Berkeley's plans. In its interim management statement, the company said the two critical factors required to boost the housing market would be a "return of liquidity to the mortgage market and the return of the feel-good factor". These are two factors which are likely to have been negatively affected by the collapse of Lehman Brothers, the problems for Merrill Lynch and AIG, and this week’s fall-out in the global stockmarkets.

London Market Shows Signs of Movement
A snapshot of activity from a leading independent estate agency in London shows that confidence may be returning to the ordinary property market – as long as the price is right.

“House prices have come down across the board and as a result, we are seeing a slight increase in activity,” said Kinleigh Folkhard and Hayward.

The firm claims the market will improve further as buyers return from their summer holidays and that it has seem a resurgence in let-to-buy.

Does Inflation Rise Thwart Hopes of Rate Cut?
Inflation is now running at 4.6 per cent – a 16-year high, and is set to continue to rise far above the government's two per cent target. The rise is mostly down to increased fuel and food prices.

Although this should, in theory, massively reduce the chances of a cut in interest rates, the chances are that the BoE will have to abandon its inflation-fighting stance in order to deal with the more pressing problem of the collapsing economy. That, at least, is the view of an increasing number of commentators who have echoed the CBI’s call for a rate cut as soon as possible.

Abbey to cut mortgage rates again
Abbey is one of a number of lenders competing more vigorously. It is now providing cheaper fixed-rate deals for those able to provide a 15 per cent deposit, rather than the 25 per cent previously required to secure the best deals.

SH Note: This was what was reported at the start of the week. However, with inter-bank lending rates soaring on the back of the Lehman’s collapse, whether this will still be the case is far from certain.
 

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