The HFI | News and Events

15 AUG 2019

HFi Today, 15.08.19

Time to Break Free from the Long Shadow of the Financial Crisis

With an Autumn Brexit Budget looming, the HFi's Chief Executive, Natalie Elphicke, has written an article for Conservative Home, on the need to break free from the long shadow of the financial crisis.

Natalie argued that growth is too low, our economy is too unbalanced and too often different groups in our society are set against each other in arguing over the slices of a cake that simply haven't been growing fast enough.

The scale of the financial crash could have all but overwhelmed the country's housing and social systems. Reviews of previous housing crises demonstrated the social and economic futility and destruction in the system of mass repossession, house price collapse and re-homing/re-jobbing/re-schooling. But bad debt is like a poison, it needs to work its way out, to wash through the financial system. The long journey over the last decade has been one intended to purge the system, but to do so through a slower and softer landing rather than a sharp and catastrophic one.

However, the cycle of economic shocks has also traditionally brought economic rejuvenation. Avoiding the worst of the shock has meant that the economic rejuvenation has been more muted than might otherwise have been the case. That is a problem that we are still today grappling with, where large parts of our economy remain subject to economic drift.

Click here to read Natalie's article in full.

Building Better, Building Beautiful Commission

Recently, the Building Better, Building Beautiful Commission released its first interim report entitled 'Creating Space for Beauty' with a speech by commission chair, Nicholas Boys-Smith.

Nicholas is well known as the head of Create Streets and a passionate advocate for building smarter, with an efficient use of land to deliver good quality homes the country needs. At the launch, Nicholas gave a fantastic overview of the need to include beauty when considering long-term placemaking for sustainable growth. As we at the HFI might say - let's build more beautiful homes, faster! Nicholas will be co-chairing the next phase with former chair Roger Scruton. We wish the Commission the best of luck in their work moving towards publishing their final report.

Click here to read the Commissions interim report in full.

Financing and Innovations in Housing Delivery

The third annual Housing Delivery Summit has taken place with a first-rate panel on financing and innovation in housing delivery. Joining Natalie, who chaired the panel, were: Michela Hancock, Greystar Europe Holdings Ltd; Shamez Alibhai, Man GPM; Mark Davie, M&G Investments; Ian Fletcher, British Property Federation (BPF); and Sophie White, Homes England.

The panel discussed innovation in financing, making social housing an attractive investment, the long term view of investment and how best to attract institutional investors into the residential housing market.

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Housing Delivery Snapshot August 2024

Housing Delivery Snapshot - August 2024

• The Bank of England cut interest rates to 5% in a move expected to begin to boost confidence. The close 5-4 vote of the MPC came with a cautionary message that the Bank was not going to cut “too quickly or by too much”.

• Mortgage lender Nationwide released its latest UK house price index report, with an annual growth in house prices of 2.1% in July, its fastest pace since December 2022.

• The latest NHBC housing pipeline figures for Quarter 2 2024 show the scale of the current housebuilding slump with a 23% fall in new registrations compared to the same quarter in the previous year.

• Latest MHCLG data reported a significant fall in residential Planning Permissions over 30%, another key housing pipeline indicator.

• Following the General Election, the new Government confirmed its 1.5 million new homes target for this Parliament.

• The Housing Secretary took immediate action to impose compulsory housebuilding targets on councils, with a warning of direct intervention if housing targets are not met.

• The Housing Minister confirmed on BBC Radio 4’s Today programme on 31 July that the Government’s New Towns programme is not expected to deliver any completed homes this Parliament.

Housing Pipeline cause for concern

HFI Housing Delivery Newsletter - August 2024

The Bank of England’s rate cut was a ray of light, but the housing pipeline remains a cause for concern. At the Housing & Finance Institute, we look at the latest news and developments in housing since the election, including in the Housing Spotlight and Delivery Snapshot.

Rate Cut Boost

Amid a challenging year for housebuilding and mortgages, there was a ray of light on 1 August, with the Bank of England announcing a long-awaited interest rate cut to 5%. The close 5-4 vote of the Monetary Policy Committee came with a cautionary message that the Bank was not going to cut “too quickly or by too much”.

Ahead of the rate rise, the mortgage lender Nationwide released its latest UK house price index report, with an annual growth in house prices of 2.1% in July, its fastest pace since December 2022.

The latest Bank of England announcements will provide a little relief for some current mortgage holders and those needing to refinance. However, many first-time buyers are facing a continuing double challenge of finding money for a deposit while meeting stringent affordability criteria. So while generally mortgage market confidence may begin to rise off the back of the Bank of England interest rate cut, access to home ownership remains difficult for many, given the affordability and home deposit challenges.

Housing Pipeline Concern

However, housing pipeline figures remain a cause for concern with the latest NHBC housing pipeline figures showing the scale of the current housebuilding slump. Latest MHCLG data reported a significant fall in residential Planning Permissions, another key housing pipeline indicator.

Housing Policy Interventions

Following the General Election, the new Government has confirmed its 1.5 million new homes target for this Parliament. Immediate action has been taken by the Housing Secretary to impose compulsory housebuilding targets on councils, with a warning of direct intervention if housing targets are not met. However, the Government’s New Towns programmes is now not expected to deliver any completed homes this Parliament, the Housing Minister told Radio 4’s Today programme. This raises questions as to how the 1.5 million new homes target will be delivered, without these major new developments coming forward at pace.

Further Government intervention on the demand side to support new buyers and home deposit savers is likely to be necessary over the next period to reverse the current housebuilding slump, together with far-reaching interventions for skills and building materials to meet a housing target that hasn’t been met since mankind first landed on the moon over 50 years ago. The HFI’s purpose is to support increased housing supply, back councils and businesses working together to build more homes and promote new ways to finance housebuilding.

Do get in touch if you would like to share ideas and suggestions on building the homes our country needs.

Best regards

Natalie Elphicke Ross
Head of Housing Delivery

natalie@hfi.org.uk

HFi Today, 15.08.19

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