However, the latest Rics survey shows a slight rise in buyer demand [...]]]> A growing proportion of surveyors and estate agents believe that economic uncertainty is holding back housing market activity.This was considered to be a bigger reason than the availability of mortgages and worries about house price falls, the Royal Institution of Chartered Surveyors (Rics) said.

However, the latest Rics survey shows a slight rise in buyer demand and sales in November with price changes continue to show regional variations.

New buyer enquiries “increased modestly” for a third consecutive month, the Rics survey showed.

The average number of sales per surveyor branch climbed to 15.4 in the three months to the end of November, compared with 15 a month earlier. This was the highest level since last September.

Slightly more surveyors expected sales to increase in the coming months than the number who expected sales to fall.

However, these slight rises were coming after a sustained period of subdued activity. More surveyors expect prices to fall in the coming months, than the number who expected prices to rise.

Annual house price changes

• England: down 0.2%
• Wales: down 0.5%
• Scotland: down 1.5%
• Northern Ireland: down 12.1%

“A meaningful recovery still seems some way off,” said Alan Collett, Rics’ housing spokesman.

On a regional basis, London registered a rise in annual house prices of 3.9%, whereas prices dropped by 4.6% over the same period in the north east of England.

The announcement came as Kingfisher reported [...]]]> Kingfisher plc- the owner of B&Q and Screwfix has announced that it is creating 1,200 jobs across the UK this year.Kingfisher said that its growing business would take on 230 staff at 29 former Focus DIY stores. One thousand new jobs are also being created at trade tools supplier Screwfix.

The announcement came as Kingfisher reported sharply higher profits.

Pre-tax profits at the group rose 24% to £439 million in the six months to the end of July.

Kingfisher said it was investing £130 million in the UK this year, four times the previous year.

That includes £20 million it is spending refurbishing the Focus DIY stores it bought earlier this year.

It has already opened 13 new Screwfix outlets this year. It expects to have opened another 40 by January 2012.

“Although the economic outlook is uncertain, this investment demonstrates our confidence in the UK’s longer-term growth prospects,” said Kingfisher chief executive Ian Cheshire.

Shares in Kingfisher jumped 5% at the start of trading on Thursday, as markets responded to the unexpectedly strong profits figure.

The company saw a 6% rise in profits at its UK and Irish Republic business – including a 25% jump at Screwfix – despite a 1% fall in sales in its home market.

Kingfisher’s overseas business was even more robust, with profits in France up by a quarter, and Germany, Spain, Turkey and Poland all putting in a strong showing.

“With around two-thirds of our profit coming from outside the UK, these results clearly show the value of geographic spread,” said Mr Cheshire.

“Looking ahead, economic uncertainty throughout Europe is likely to impact consumer confidence, meaning conditions will remain challenging for retailers.  However, our plans already assumed little help from our markets.”

Stripping these charges out, the company made [...]]]> Barratt Developments, the country’s largest homebuilder, says it has had its best result in three years helped by a rise in average selling prices.It reported a pre-tax loss of £11.5 million for the year to June, including £54.2 million of exceptional charges relating to financing and reorganisation.

Stripping these charges out, the company made an underlying profit of £42.7 million for the year to June.

Its average selling price rose 2.3% to £178,300.

Barratt said it expected to make further progress in a tight UK housing market.

The company’s chief executive, Mark Clare, said: “This has been a further year of recovery for the group.

“We have made considerable progress in rebuilding profitability – by optimising selling prices, improving operational efficiency and securing new higher margin land.”

The company said the mortgage market was holding back demand for newly built properties, saying that there was a limited number of lenders and that borrowers were typically being asked for a 20% deposit, rather than a 10% deposit for older properties.

It said the outlook for the housing market remained challenging, particularly outside London and the south east of England.

It warned those on lowest incomes were likely to [...]]]> Household budgets could be squeezed for the next 10 years as the impact of tax rises and cuts is felt, the Institute for Fiscal Studies (IFS) has warned.Its survey suggests families have seen the biggest fall in living standards in 30 years in the last financial year.

It warned those on lowest incomes were likely to suffer a further significant reduction in their spending power.

The IFS cross-country study found that UK households had been relatively insulated from the immediate impacts of the recession, partly because of state welfare systems and increases in state financial support.

It said much of this protective effect was concentrated on households in the bottom half of the income distribution.

But it said earnings, state benefits and tax credits had all fallen in real terms in the UK over the past year.

IFS researchers estimated this was likely to have led to a fall in median net household income of 3.5%, the largest single-year drop since 1981, returning it to its 2003-04 level.

The pain of the recession had been delayed rather than avoided, they concluded.

Robert Joyce, a research economist at IFS and a contributor to the report, said: “The current economic downturn began more than three years ago, and may seem like old news.

“But, as in other developed countries, the most severe consequences of the recession on UK living standards have only just begun to be felt, and will continue to be felt for years to come.”

Previous IFS research has shown that the decline in average living standards looks set to continue until at least 2013-14.

There have been a growing number of calls in recent weeks from opposition politicians and some economists for the government to rethink its programme of spending cuts in the light of weak economic growth, not only in the UK, but also in Europe and the US.

The latest report found that the fall of 6% in UK GDP from peak to trough during the recession lies somewhere in the middle of the international experience.

The Irish Republic, Japan and Sweden had experienced sharper falls, whereas countries such as Canada saw smaller falls.

The rate of employment fell by a good deal less than GDP – by 1.6 percentage points between 2007 and 2009, the IFS said.

Again, this was roughly in the middle of the global experience. Over the same period, the employment rate rose in Germany, was almost unchanged in France and fell by more than four percentage points in the US.

It is the lowest reading since the construction sector returned to growth [...]]]> Growth in the UK building sector slowed further in August  while the housing sector shrank again, builders suggests.The Markit/Cips Construction PMI index – based on a monthly survey of building firms – fell to 52.6, from 53.5 in July. Levels above 50 indicate growth.

It is the lowest reading since the construction sector returned to growth eight months ago, and comes amid worries of a renewed recession.

Meanwhile, separate data showed a sharp fall in new construction orders.

New orders in the second quarter dropped 16.3% versus the first three months of the year, according to the Office for National Statistics (ONS).

This brings the total volume of new orders below the trough registered during the 2008-09 recession, to its lowest level since 1980.

The drop in business appeared to have been driven by government cuts.

Public sector housing and non-housing orders both dropped over 30% from the previous quarter, the ONS data showed, while infrastructure spending was down by a quarter.

The ONS new orders data is typically volatile, showing big swings from one quarter to another.

However, the latest drop is unusually large, and the level of new orders has consistently remained about a quarter below pre-recession levels since 2008.
‘Reality bites’

The two sets of data will fuel worries that the UK – and global – economy may be dipping back into recession.

Equivalent PMI surveys for the manufacturing sector released on Thursday suggested that factory activity in the UK and other major economies shrank in August.

The latest UK construction sector PMI pointed to a continuing downturn in new orders, with respondents reporting that competition among firms was becoming tougher.

Meanwhile input cost rises accelerated in the month – blamed on higher fuel and raw material prices – putting further pressure on profit margins.

With confidence reported to be at an eight-month low, firms said they continued to cut back on employment and sub-contractor usage.

“Reality is continuing to bite in the UK construction sector, as worries over wider economic conditions contribute to a slower rate of output growth,” said David Noble, chief economist at the Chartered Institute of Purchasing and Supply, which commissions the surveys.

“Though overall activity is still in growth territory, there may be some questions about whether this will continue for much longer.”

But while activity in the housing sector continued to shrink, and in civil engineering slowed sharply, there was a small pick-up seen in commercial construction, the survey found.

The typical home now costs £165,914, the lender [...]]]> House prices fell slightly in August with values expected to stay the same or drift modesty lower for the rest of 2011 Nationwide says.The building society said that property prices were 0.6% lower in August than in July, and 0.4% down on the same month a year ago.

The typical home now costs £165,914, the lender said.

It also warned that prices could be pushed down further if more workers were laid off.

“For some time now the residential property market has been moving sideways, as weak demand for homes co-existed with a situation where relatively few homes were coming on to the market,” said Nationwide’s chief economist Robert Gardner.

“A further fall in employment would be likely to upset the relatively delicate demand-supply balance and put downward pressure on prices.”

However, he said that threats to UK economic growth meant that interest rates were expected to remain on hold until well into 2012, providing support for homeowners and domestic spending.

The Nationwide data is based on a sample of the lender’s own loans during the month.

Other house price surveys include figures from the Land Registry which, although they lag behind the Nationwide data, provide a regional breakdown of prices.

The most recently published Land Registry figures showed that prices in the North East of England fell by 8.8% in the year to July. There was also an annual drop in prices in every area of England and Wales, except London.

The lender explained that over the last three months prices had been 0.5% higher than in the [...]]]> House prices have gone up for the third month in a row according to the Halifax mortgage lender.Its latest monthly survey says they rose in July by just 0.3%, leaving them 2.6% lower than a year ago at £163,981.

The lender explained that over the last three months prices had been 0.5% higher than in the previous three.

That was the first such increase in 14 months, indicating that prices were stabilising, according to its housing economist Martin Ellis.

“Overall, there has been little change in either the level of house sales or the number of properties on the market for sale since late 2010,” he said.

“These steady market conditions have helped to stabilise house prices in 2011 following last year’s modest decline.

“This pattern is expected to continue over the rest of the year with little genuine direction in either house prices or sales,” Mr Ellis added.

As well as plumbing problems, it dealt with drainage and electrical failures, and provided gas safety checks.

Some 10,000 customers [...]]]> The Homecall Plus company which provided cover for plumbing, heating and other emergencies in the home has collapsed.
Homecall Plus of Furthergate, Blackburn, has been put into compulsory liquidation after a creditor petitioned the Official Receiver in Blackpool.

As well as plumbing problems, it dealt with drainage and electrical failures, and provided gas safety checks.

Some 10,000 customers who bought policies up to 3 December 2010 should still receive cover.

The service was a form of insurance, described by its website as a warranty and “a comprehensive extension of the cover provided by your household insurance”.

Those policies were underwritten by Brit Insurance, which is honouring them.

However, there is concern that any customers who signed up after 3 December last year could be left without cover.

It is uncertain whether they would be able to make a claim to the Financial Services Compensation Scheme (FSCS). The FSCS has yet to decide whether the policies would be eligible.

The claims hotline to Homecall Plus was still in operation on Thursday. Customers were being diverted to Brit Insurance, if appropriate.

Others were informed of the company’s failure and were advised to cancel any direct debits.

Homecall Plus charged £126 a year or £11 a month for a call-out service.

The Insolvency Service has transferred the case to its public interest unit because of the number of people who could be affected.

The data was weaker than expected and helped send the Pound to a 13 month low against the euro.

The euro [...]]]> Growth in the UK construction industry slowed sharply in April weighed down by a contraction in housing activity, data has shown.
The Purchasing Managers’ Index (PMI) for construction fell to 56.4 in March to 53.3 in April.

The data was weaker than expected and helped send the Pound to a 13 month low against the euro.

The euro rose to 90.28 pence, while the Pound also fell against the dollar to trade at $1.6467. Sterling did later recover against both currencies.

Analysts had expected a more modest slowdown in the index to 55.5. A figure above 50 indicates growth in the sector.

Although the Office for National Statistics (ONS) said the UK economy returned to growth in the first quarter, construction remained a particularly weak spot, with the sector shrinking by 4.7%.

But David Noble, chief executive at the Chartered Institute of Purchasing and Supply (CIPS), who collects the PMI data with research group Markit, said the sector was in better shape than the ONS figures suggested.

“Whilst growth in the construction sector has lost its pace compared to the start of the year, the PMI figures indicate that the situation is nowhere near as sluggish as latest ONS figures suggest,” he said.

But he added: “Low activity levels in the housing market, tighter government purse strings, rising input prices in fuel and materials, as well as poor cash flow in some cases, are clearly a worry.

“Confidence amongst UK constructors remains at a historically low level as the number of jobs continues to drop.”

The Markit/CIPS data showed weaker performances from both the housing and civil engineering subsectors.

The consultation will also cover mobile payments, tipped to be the main replacement for [...]]]> Banks are asking consumers for their views on new payment technologies that will replace cheques by the end of the decade.
The Payments Council, which oversees UK payments strategy, is seeking views for the blueprint on how cash, cards and electronic payments operate.

The consultation will also cover mobile payments, tipped to be the main replacement for chequebooks.

Banks want to phase out all cheques in 2018 under the Council’s plans to save money.

The 10-year plan for payments was launched in 2008 and is now being updated.

“Payments are sometimes described as the plumbing behind the economy. They are an essential part of our lives and rightly regarded as a critical national infrastructure so it is important that they do what we need them to do,” said Gary Hocking, acting chief executive of the Payments Council.

“Public consultation is a crucial part of updating the plan and we are looking for input from as wide a variety of organisations and interests as possible.”

Your opportunity to stop the end of cheques is open at:
http://www.paymentscouncil.org.uk/who_are_we/our_strategy/national_payments_plan_2011_consultation/

They returned £7 billion in the final three months of the year, [...]]]> UK homeowners paid off more of their mortgage borrowings last year than they had done in any other single year official Bank of England figures show.
Mortgage borrowers paid back more than £24 billion to lenders in 2010, the highest since records began in 1970.

They returned £7 billion in the final three months of the year, a record amount during any quarter since the Bank started collecting the figures.

The figures also include money paid as deposits by homebuyers.

Lenders demanding higher deposits and rationing home loans would also increase the financial stake that homeowners have in their properties.

In the boom, people used extra mortgage borrowing to cover other spending. From July 1998 to March 2008 homeowners borrowed an extra £328bn against the rising value of their homes

This is known as housing equity withdrawal. Homeowners cashed in on the increasing value of their homes to buy cars and holidays.

Now the opposite is happening, as families try to reduce their debts and lenders demand higher mortgage deposits.

Borrowers have also taken advantage of low interest rates to pay back more of their home loans while mortgage costs are low.

There has been an injection of housing equity for 11 quarters in a row, the figures show.

Homeowners have now collectively injected £57.4 billion into their housing equity since the second quarter of 2008, when the trend switched from withdrawal.

Lenders demanding higher deposits has also increased first-time buyers’ financial stake in their homes.

The latest figures show that households spent the equivalent of 2.7% of their post-tax income on reducing their mortgages.

During the boom times, equity withdrawal was providing homeowners with the equivalent of a 9% post-tax boost to their incomes.

Mortgage rationing through demands for higher deposits has contributed to the trend in equity injection.

Chancellor George Osborne said in [...]]]> Business Secretary Vince Cable has said tax on high value properties may have to rise – if the 50p tax rate is axed.
Nick Clegg told the Financial Times it would not be a return to the Lib Dem “mansion tax” policy but could include looking at council tax or stamp duty.

Chancellor George Osborne said in the Budget that the 50p rate would be temporary but the government would look at tax on “very high value” properties.

Mr Osborne said high personal tax rates “crush enterprise, undermine aspiration and often undermine tax revenues as people avoid them”.

Mr Cable said he agreed with the chancellor that the government had to move away from “extremely high rates of tax on income” if it turned out to be “counter-productive”, but at a time when people were suffering hardship that tax had a “political purpose”.

There was a “strong argument” for having a “proper base for taxing property”, he said.

In the Budget, Chancellor George Osborne said he agreed with his Labour predecessor Alistair Darling, who introduced the 50p tax rate, that it should be temporary – but now was not the right time to remove it.

He said he had asked HM Revenue and Customs to look at how much it was actually raising, but said the wealthiest should pay more and the government would be “redoubling our efforts to find ways of ensuring that owners of high value property cannot avoid paying their fair share”.

A Treasury spokesman said the chancellor had been referring specifically to tax avoidance and evasion, and not to new ways of taxing property.

In 2009 while in opposition, Mr Cable conceded that he should have consulted more widely in his party after his “mansion tax” proposal for a 0.5% charge on properties worth more than £1m prompted criticism from some fellow Lib Dem MPs.

The party later raised the threshold to £2m, a policy which was in the Lib Dem manifesto last year.

He said: “Why do banks in [...]]]> Banks are trying to maximise short-term profit at the expense of customers, the Bank of England governor has said.
Mr King said that, over the past two decades, too many people in financial services had thought “if it’s possible to make money out of gullible or unsuspecting customers, that’s perfectly acceptable”.

He said: “Why do banks in general want to pay bonuses? It’s because they live in a ‘too big to fail’ world in which the state will bail them out on the downside.

“We’ve not yet solved the ‘too big to fail’ or, as I prefer to call it, the ‘too important to fail’ problem. The concept of being too important to fail should have no place in a market economy.”

He also said there was “too much weight put on the importance and value of takeovers” and that “it doesn’t make sense to destroy a company with reputation” in the hunt for short-term profits.

He went on to draw a contrast between manufacturing companies, which he said largely cared about their workforces, customers and products, and the banks.

“There’s a different attitude towards customers. Small and medium firms really notice this: they miss the people they know,” he said.

The Bank of England will monitor whether [...]]]> A long awaited banking agreement with the largest UK banks on lending, pay and bonuses has been announced entitled Merlin.Under Project Merlin, banks will lend about £190bn to businesses this year – including £76bn to small firms – curb bonuses and reveal some salary details of their top earners.

The Bank of England will monitor whether loans targets are being met.

However, Chancellor George Osborne formally ruled out imposing a bonus tax.

Mr Osborne acknowledged that the package would not be enough to assuage public discontent with the banks’ role in the financial crisis, saying: “The anger will remain”.

Treasury sources said that the time had come to move on from “retribution to recovery” – focusing on the lending boost from banks rather than issues over bonuses.

However, groups representing small businesses said that despite the increased lending, they feared the cost of borrowing would remain prohibitively expensive for many firms.

HSBC, Barclays, Royal Bank of Scotland (RBS) and Lloyds Banking Group have signed up to the Project Merlin agreement, while Santander has agreed to the lending parts of the deal.

Other pledges include providing £200m of capital for David Cameron’s Big Society Bank, which is supposed to finance community projects.

However, while banks have also been asked to show restraint in bonus payments, these are expected to total more than £6bn this year.

Banks loaned £179bn to businesses last year and the government wanted a commitment that this would increase.

They are also going to be providing £1bn of risk capital over three years for small businesses in parts of the UK worst hit by spending cuts.

The government said that the measure of whether banks were providing the promised credit to business would be among the performance targets used to determine bonuses of bank chief executives.

The £76bn to be loaned to small business is up 15% from 2010 levels.

However, the provision of credit to UK businesses will be on commercial terms.

Government cuts are making matters worse, it added, with more than half of builders [...]]]> Small and medium-sized builders in the UK are facing their fourth consecutive year of recession, according to the Federation of Master Builders (FMB).
One-third of builders are expecting to cut staff over the next 12 months as output continues to fall, it said.

Government cuts are making matters worse, it added, with more than half of builders reporting a fall in public repair and maintenance work.

The rise in VAT will also cost 7,500 jobs in the sector, it forecast.

The FMB added that cuts to social housing are also having a big impact on its members.

“Two-and-a-half thousand construction firms went under last year and the Construction Products Association has said it expects no growth at all in this sector until 2013,” Richard Threlfall, UK head of building and construction at KPMG, told the BBC.

“This is a market that is in deep, deep trouble.”

He said the VAT rise, increases in costs of materials due to rising commodity prices, and government cuts were all hitting builders hard.

However, Mr Threlfall said growth would return to the industry.

This would come from the waste sector, the government’s Green Deal and underlying demand for social housing.

The Green Deal, which is designed to help people make their homes more energy efficient, would “be a godsend to the small builder industry”, said Mr Threlfall.

And the fact that there are five million people on the waiting list for social housing means that demand will pick up, he added.

Quantitative Easing (QE) is the Bank’s policy of putting new money into the financial system to try [...]]]> Last week the Bank of England’s Monetary Policy Committee (MPC) voted to keep interest rates on hold with no increase in Quantitative Easing.But re-mortgager asks with rising unemployment and government cutbacks- should more be done to stimulate the economy?

Quantitative Easing (QE) is the Bank’s policy of putting new money into the financial system to try to stimulate the economy.

Mr Posen- a member of the MPC wants an extra £50bn to be added to QE programme.

Economists have warned that while putting up interest rates may help reduce inflation, it would also restrict the spending power of homeowners with tracker mortgages and people repaying other debts – further endangering the recovery.

Consumers’ spending power is already being squeezed, because pay packets are not keeping up with inflation – with a report by Vocalink on Thursday suggesting that the growth of take-home pay had fallen sharply in the past three months.

Consumers have also been faced with record petrol prices in recent weeks, and VAT rose from 17.5% to 20% on 4 January pushing up the cost of many goods and services.

Recent data has suggested that manufacturing is the only section of the UK economy to be showing signs of strength.

Official figures released on Thursday showed that growth in car production and food processing had helped manufacturing increase by 0.6% in November – a little faster than expected. However industrial output was slower than predicted, according to the Office for National Statistics.

Meanwhile, business group the CBI said the Bank would come under pressure to increase rates later this year “as its anti-inflation credibility comes under greater pressure”.

It was also the lowest total in the month of November for a decade.

Lenders said [...]]]> Mortgage lending fell 5% in November compared with the previous month and was down 10% on a year ago, lenders say.
Gross mortgage lending stood at an estimated £11.1bn – the lowest figure since April, the Council of Mortgage Lenders (CML) said.

It was also the lowest total in the month of November for a decade.

Lenders said the relatively low level of mortgage lending in the UK was likely to continue in 2011.

The sharp drop compared with November 2009 was the result of a “distortion” in lending a year ago, the CML said.

A year ago there was a temporary lift in lending as buyers entered the market prior to the end of the stamp duty concession.

However, the CML said mortgage lending remained weak owing to a lack of interest from buyers and rationing of home loans from lenders.

“The fall in gross mortgage lending in November reflects the usual seasonal slowing of activity at this time of year, and reinforces the picture of a continuing flat market,” said Bob Pannell, the CML’s chief economist.

“It is difficult to see any significant change in this pattern of activity in the mortgage market in the short term with both demand for mortgage borrowing and the supply of funds for lending remain heavily constrained.”

England’s planning system is being turned on its head with an unprecedented amount of power being transferred to communities. It has [...]]]> Nimbyism is stopping many new housing developments on the drawing boards.
The idea is that instead of Whitehall bureaucrats deciding what gets built, local communities should have the freedom to decide what their area looks like.

England’s planning system is being turned on its head with an unprecedented amount of power being transferred to communities. It has huge implications for housebuilding.

But the big question is – if you leave it up to locals to decide on the often thorny issue of development, will enough homes get built and, crucially, in the right places?

Under the old system, regions were set housebuilding targets on what they had to build for in the next two decades. Labour said three million new homes were needed by 2020.

But the coalition government said these targets did not work and immediately swept them away.

It is fair to say these targets were never terribly popular among many local authorities.

Since May, many of them have had a rethink and are scaling back on developments. The reductions have been dramatic.

So far, 44,510 planned homes have been ditched by the four local authorities that make up the greater Bristol area. That’s a third of the entire total they had been told to plan for.

In fact, according to the national planning consultancy, Tetlow King, just over 200,000 planned homes in many parts of England are no longer going ahead.

The worry is that localism will end up as a Nimby’s charter, with local authorities shrugging off their housebuilding responsibilities.

At the heart of the government’s new approach is a cash bonus to councils to financially reward those councils and communities that deliver new homes and businesses to their area.

It amounts to equivalent of six years’ worth of council tax for every new home built.

But for every opponent of development, there is someone crying out for somewhere to live. Resolving the tensions between those who have homes and those who do not has never been easy.

The coalition government is setting out on a radical new path. These planning reforms are being billed as the building blocks of the Big Society, so that local people can shape their own towns and cities.

“We need to take action to get Britain building again,” says Housing Minister Grant Shapps. “Years of centrally imposed, top-down targets pitched developers against communities, with councils caught in the crossfire, and last year, housebuilding fell to its lowest level for any peacetime year since 1924.

“That’s why we’ve set aside almost £1bn for a New Homes Bonus, which will ensure that those communities going for growth reap the benefits of development not just the cost. Councils who build more homes will start benefiting immediately from extra cash, which they can use to improve their local area.”

Re-Mortgager wonders quite how the 250,000 new homes that the country needs building every year will be built, given that there is a property price recession and new untested planning laws that pander towards inertia and inactivity.