Hampshire Trust

Housing minister Grant Shapps yesterday announced a ‘new deal’, which will see the government team up with the National House Building Council (NHBC).

The partnership is intended to help ministers gain a greater understanding of how measures to stimulate house building are affecting the industry.

Shapps claims that the partnership between the government and the NHBC will provide ministers with an insight into the details of housebuilding, including information on construction and the building process, which will help them to further boost the industry.

Both the Mortgage Indemnity Scheme and the Get Britain Building fund are among the measures already introduced by the government to try to restart delayed development projects and to provide better incentives for private builds. However, Shapps insists the ‘new deal’ will help the house building industry even further.

Announcing the partnership, Shapps said, “The NHBC have long worked closely with Government to ensure our numbers are as accurate as possible. I know that today’s new partnership will broaden and deepen both our understandings of cause and effect in the housing market and bring new ideas and insights to the fore.”

The NHBC’s chief, Imtiaz Farookhi, added, “High quality data plays such an important role helping the government to assess the progress of its housing programme.”

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The Federation of Master Builders (FMB) has claimed that it will be a good few months until house building gets back on track.

The director of external affairs at the organisation, Brian Berry, said that the impact of government moves to stimulate house building will not be seen until the second half of the year. He added that this improvement will only be seen if the government follows through on its plans outlined last year. He stated, “We are not very optimistic – and that depends on the government sticking to the original proposals.”

Referring to the National Planning Policy Framework Mr Berry added, “With planning proposals, it is not going to be until March when the government is going to respond initially and even if it responds positively it will still take months to actually feed through into the economy.”

Mr Berry also spoke about the general condition of the housing market, adding that it was still tough for first time buyers to get onto the housing ladder and that large deposits are still needed to gain many mortgages.

Young men are the best savers in the UK, according to a survey carried out by National Savings and Investments (NS&I).

The average put away in savings accounts or savings bonds by males aged 16-24 is 7.8 per cent of their income, totalling an average of £104 per month. This compares very favourably to the 6.7 per cent saved by 45 to 54-year-olds.

The average overall, for the entire nation is £88 per month, but the savings priorities were found to differ hugely depending on the age group of the saver. For example, for those aged between 25 and 34, almost half are saving for a house deposit and claim that the future is far more important than saving for a holiday. However, once savers reach the 45-54 age group, only 20 per cent are still saving for emergencies, such as increased mortgage interest rates or redundancies.

Young men though, are the best savers, focusing largely on material goals, such as buying a car or a home.
NS&I’s Savings Spokesperson, John Prout, said, “Setting specific targets is a good way to stay motivated, and even if it’s only a small amount being set aside each month the savings soon mount up.”

The National House Building Council (NHBC) is putting renewed pressure on the government to keep up house building numbers after data showed a trail-off at the end of 2011.

The total number of new homes built in 2011 was just 115,020, slightly down on the 115,458 registered in 2010, which disappointed the NHBC. Despite calls to increase house building in order to reduce the housing shortage being felt around the country, the number registered in 2011 was drastically down on pre-recession high of 200,7000 recorded in 2007.

NHBC’s Chief Executive, Imtiaz Farookhi, said, “Independent reports predict housing shortfalls over the coming years and a decline in the wider construction sector during 2012. Such figures are therefore a cause for concern and place even greater pressure on the successful delivery of the Government’s Housing Strategy.”

The number built in the final quarter of 2011 was down to 21,152, significantly less than the 27,626 registered in the same period the year before, showing the shortfall worsened as the year progressed.

There is a still a major lack of awareness among savers that the compensation total has stood at £85,000 for over a year.

According to research from the Financial Services Compensation Scheme (FSCS), only one in five (21 per cent) of savers were aware of the new compensation limit, which increased on 31 December 2010.

Despite a comprehensive advertising campaign, awareness is still extremely limited, according to the FSCS. The organisation is now looking into the option of requiring banks and savings account firms to display the new compensation limit in branch or online.

FSCS’s Chief Executive Mark Neale explained the situation: “Although there have been no high profile failures over the last 12 months it is important for financial stability that savers are aware of the protection that is available to them.”

The news that savings are now covered up to a limit of £85,000 would be welcomed by most savers, who may still be uncertain about the level of protection they would get should their savings account provider collapse.

“The £85,000 limit is good news for every saver in the country, with 99 per cent of accounts now covered,” added Mr Neale.

According to the Institute for Public Policy Research (IPPR), the government’s housing strategy needs to do more to boost the struggling sector.

The current strategy does not make the best use of house builders, and the government is risking a ‘lost decade’ of house building, the institute says in a new report.

Entitled ‘We must fix it: delivering reform of the building sector to meet the UK’s housing and economic challenges,’ the report accuses the government of ‘subsidising stagnation,’ by not asking enough of house builders in exchange for state support and funding.

Nick Pearce, IPPR director, calls for an urgent shift in policy, arguing that England is facing a shortfall of 750,000 houses by 2025. He adds that 250,000 new homes need to be built each year in order to close the gap.

“Our construction industry has for too long prioritised trading land over building homes. This has to change. The Government’s new housing strategy does not make sufficient demands of the house builders. Instead it offers them public land, money and guarantees and without a serious quid pro quo,” Mr Pearce told Money Marketing.

Housing minister Grant Shapps detailed the housing strategy planned by the government last month, which included a £400 million investment fund which would support developers who required finance.

It also included the opening up of land owned by the public sector to allow developers to construct new homes on it on a ‘build now pay later’ basis.

However, the IPPR confirmed that the number of new homes constructed in the year to September 2011 was below 100,000, and that more needed to be done in order to remedy this shortfall.

The biggest financial regret from 2011 for British people was not putting enough cash into savings accounts, according to new research from First Direct.

Some 52 per cent of British people admitted that they thought they had not saved enough during the year, which was a much higher percentage than the 33 per cent who regretted not paying off enough of their debts.

Some 13 per cent of those questioned said their biggest regret was not paying into a pension. Some of the other top regrets were borrowing money from family and friends, spending too much on a partner or paying for a pricey holiday they couldn’t really afford.

The statistics illustrate how important saving is from a psychological point of view, as well as from a financial health point of view. First Direct’s head of saving, Bruno Genovese, said, “Ensuring that you plan your long term spending is extremely important as good organisation can help you pay off debts more quickly, increasing disposable income for saving and allowing your money to work for you more effectively.”

One of the UK’s largest house building firms, Barratt Homes, has welcomed the relaxation of mortgage lending terms, and particularly the emergence of the 95 per cent mortgages on new build homes.

“The key thing about the return of 95 per cent mortgages on new-build homes is that people will no longer need huge deposits of up to 20 per cent of the price of the property,” explained Regional Sales Director, Gary Patrick. He added that this allows many more first-time buyers to get onto the housing ladder, which, in turn, boosts the wider economy.

New build homes are now being snapped up much more quickly than before the 95 per cent loans were launched, added Mr Patrick: “Now the banks have agreed to start lending again on new-build homes at 95 per cent loan to value, so homebuyers will only need a deposit of five per cent.”

The five per cent deposit scheme is part of the wider effort to increase access to housing for those who previously thought they might not ever have enough of a deposit to buy a home. For a number of years it been difficult to even find mortgages offering 90 per cent loan to value terms.

New figures show that the construction industry expanded in November as a result of an increase in housing construction for the first time in six months.

The increase was measured on the CIPS/Markit Purchasing Managers’ Index, which showed a figure of 52.3, indicating expansion in the market. New house building orders rose and more people were employed in the house-building sector than at any time since May 2011.

Deutsche Bank’s George Buckley spoke to the Financial Times about the increase in activity, stating: “We can take heart that it doesn’t look as though we’re going to see a contraction on the scale seen in 2008 and 2009.”

IHS Global Insight’s analyst, Howard Archer, also spoke to the FT, stating, “It’s a relief in the current environment to see any evidence that part of the economy is growing.”

However, although the market for house building and construction does seem to be expanding, the Purchasing Manager’s Index showed that the November score was down from the October score, showing that the growth fell slightly, despite the house building increase.

Bridging lender and mortgage broker Fastmoney has been fined £28,000 by the Financial Services Authority for treating customers unfairly.

The firm arranged mortgage contracts and bridging loans between 2005 and 2010 and has been found to have arranged 18 regulated bridging loans in that time. The FSA said they found problems with Fastmoney’s sale process in that they failed to convey the risks of taking the products out to their customers.

They were also found to have failed to outline the full costs to their customers and did not inform them about all their options in a fair way.

These failings were seen as severe as the customers Fastmoney was lending too tended to be more vulnerable with poor credit ratings and less understanding of financial issues and responsibilities. Some were desperately in need of funding to stop their homes being repossessed.

The FSA said that bridging lenders have a responsibility to their customers to “Ensure communications with customers are clear, fair and not misleading and that they do not sell a product which is inappropriate for that customer.”