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VOLUME 2

June 2009 INSIDE THIS ISSUE

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House buyer enquiries and sales continue to rise New house buyer enquiries and sales are continuing to rise with available housing stocks reducing according to the RICS’ UK housing market survey. The number of Chartered Surveyors seeing an increase in new enquiries edged up again in May, with 48 per cent reporting a rise rather than a fall, the seventh consecutive monthly gain.

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Lack of new homes nudges up house prices

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House prices have continued a tentative recovery with the average cost of a UK home rising 1.2 per cent in May driven by a lack of supply of new homes coming onto the market.

Sales also rose, albeit from very depressed levels, indicating that the increase in footfall of potential buyers is steadily improving activity in the housing market. HTTP://WWW.CNPLUS.CO.UK/5203178.ARTICLE

Nationwide said that it was too early to call the bottom of the housing market, as unemployment continues to rise and credit remains scarce. HTTP :// WWW .CNPLUS .CO.UK / SECTORS / HOUSING / LACK -OF -NEW -HOMES -NUDGES -UP HOUSE -PRICES /5202698.ARTICLE

Britain out of recession by end of year says CBI “The improvement in house price trends is consistent with signs of stabilisation in several other economic indicators and suggests that any further price declines may occur at a less rapid pace than in 2008.” Martin Gahbauer, Nationwide Building Society Chief Economist

The Confederation of British Industry (CBI) has downgraded its recession forecasts and has said Britain could come out of recession by the end of the year with a slow growth in 2010. The recovery will be “slow and gradual”. CBI director general Richard Lambert said it seemed that the worst of the recession was “behind us” but warned that extensive talk of green shoots may be premature. He said "For positive growth to return, lenders need to feel more confident so that credit can start flowing again." HTTP :// WWW .SHARECAST.COM /CGI -BIN/ SHARECAST/ STORY .CGI ?STORY _ID=2833199

DBD Cottura continues growth DBD’s premium furniture division Cottura enjoys further growth with the order to supply and install kitchens to Belstone Homes latest development of five and six bedroom homes. WWW .COTTURA .CO.UK


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Housebuilder news Housebuilders creak into action as they run out of unsold stock Most major housebuilders are now starting to open up new sites, as prices stabilise and the builders run through their unsold units, according to research conducted by Building. “The housebuilding sector won’t recover to the level of building 170,000 houses per year for some years. There will need to be a lot of demothballing and rerecruitment first.” Stephen Stone, CE Crest Nicholson

Bellway switches focus from debt reduction to building again. Bellway will change its focus away from reducing debt to building new homes once again in areas of the country where demand is strongest. The Newcastle-based house builder said conditions vary across the UK with southern based divisions experiencing a stronger market. It is envisaged turnover in the southern divisions will be much higher by the year end than the northern based divisions whose markets still remain fragile, particularly in the Midlands, Yorkshire and North-west. HTTP :// WWW .CNPLUS .CO.UK / SECTORS / HOUSING /BELLWAY -SWITCHES -FOCUS -FROM -DEBT-REDUCTION-TO BUILDING -AGAIN/5203048.ARTICLE Barratt goes back to houses over flats Recession-battered builders scale back flatted developments in favour of traditional housing. Barratt chief executive Mark Clare has signaled a return to traditional house building, saying tower blocks will soon be a thing of the past. Barratt has resubmitted a number of planning applications for flatted developments over recent months to build houses instead. The recession has made house builders rethink the tactics that have seen flats make up more than half the industry’s output over the past decade. HTTP :// WWW .CNPLUS .CO.UK / SECTORS / HOUSING /BARRATT-GOES-BACK -TO-HOUSES -OVER FLATS /5202545.ARTICLE

Crest turnover to fall by one-third in 2009

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Stephen Stone, chief executive of Crest Nicholson, has said the recession will slash turnover by a third in 2009. Speaking after the housebuilder released its results for 2008, Stone said last year’s figure of £544m would drop to below £400m this year. This reflects sales volumes at the company falling from 2,825 in 2008 to below 2,000 this year.

HTTP://WWW.BUILDING.CO.UK/STORY.ASP?S TORYCODE=3141016


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Supplier News The New Zealand Herald has reported that US private equity company Texas Pacific Group had a casual look at buying a stake in Fisher & Paykel Appliances. The whitegoods maker confirmed recently that Chinese manufacturer Haier would buy a 20 per cent stake through a placement and $189 million capital raising. Arcelik, which owns the Beko brand in the UK, is seen as being a potential partner as F&P already buy front loading washing machine products from them for the Australian and New Zealand markets. HTTP :// WWW .UKWHITEGOODS .CO.UK / MODULES .PHP ?NAME =N EWS &FILE =ARTICLE &SID=2299 It has been confirmed that 305 jobs at the Hotpoint washing machine factory in Bodelwyddan. At it's peak Hotpoint/Indesit employed more than 2000 workers at Llandudno Junction. Manufacturing at the site will be switched to Poland. Staff were called to a meeting earlier today and told their jobs were being transferred to Poland and the closure will begin next month despite months of campaigning by politicians and union bosses.

“On the whole, BSH has proved to be more resistant to this crisis than many other manufacturers. This shows once again that with our value-driven management strategy we are on the right track.” Dr. Kurt-Ludwig Gutberlet, CEO of BSH

Indesit Company UK blames the market requirement for washing machines, which the site manufactures, continuing to decline, and reductions in the factory's output, combined with increasing manufacturing costs. HTTP :// WWW .UKWHITEGOODS .CO.UK / MODULES .PHP ?NAME =N EWS &FILE =ARTICLE &SID=2300 BSH is manufacturing several cutting-edge prototypes of microwave, refrigerator and washing machine with integrated UHF- reading devices and antennas. The appliances will be tested by potential users throughout the summer months in Spain, as well as in Wales. Prototypes are to be integrated into “smart homes”, and by using several unique technologies, will be able to communicate with the user in everyday life. FIND OUT MORE Electrolux, the world's second-biggest home appliances maker, sees no signs of improvement in its European appliances markets, its chief executive told Reuters in an interview. "In Europe it started to fall by about 20 percent (this year) and it has been around 15 and 20 percent (down) since. So it is more of the same," Hans Straberg said on Monday, adding the German market was still holding up well. HTTP :// WWW .GUARDIAN.CO.UK / BUSINESS / FEEDARTICLE /8547387

Unwilling to give up the potentially huge ice box market in China, Whirlpool, the biggest white home appliance maker in the world, has returned to the charge by unveiling 24 new models of refrigerators under four categories in Shanghai, putting itself in direct competition with Siemens, Bosch and Samsung. After going through ups and downs in this country, this time Whirlpool is fully prepared. It has joined hands with Chinese home appliance heavyweight Hisense to tap into the local washing machine and ice box sectors. HTTP://WWW.TRADINGMARKETS.COM/.SITE/NEWS/STOCK%20NEWS/2366358/

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Statistics UK Plots England & Wales plots DBD Plots

9,452 8,320 974

DBD Market share

11.71%

UK House-Building Decline Begins to Stabilise Following the first quarter-on-quarter rise in applications to start new homes in almost two years in quarter one this year, NHBC's latest statistics indicate that the decline in UK house-building is stabilising. HTTP :// WWW .NHBC.CO.UK /N EWSANDC OMMENT/N AME ,38010,EN.HTML

DBD England and Wales Snapshot Apr 08 13,700 882 10.89% 11,435

Plot Completions UK DBD plots completion DBD UK market share Newbuild starts

Apr 09 9,452 -31.01% 974 +10.43% 11.71% +7.53% 6,379 -44.22%

UK New-build sales, registrations and completions

“While it is still too early to assume that these are definite signs of a recovery, some positive indicators are emerging which suggest that the severe downturn in house-building activity may be beginning to turn a corner.” Imtiaz Farookhi, NHBC Chief Executive

Apr 08 466 8,443 10,552 2,992 3,139

Average daily sales Private registrations Private completions Housing association registrations Housing association completions

Apr 09 349 3,590 6,091 2,789 3,201

-25.11% -57.48% -42.28% -6.78% -1.98%

DBD Market Share England & Wales 15.00% 10.00% 5.00% 0.00%

DBD Market Share Rolling 12 month ave NAVIGATION

10.00% 8.00% 6.00% 4.00% 2.00% 0.00%

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15000

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Appliances to date fiscal year

5000 0 2005/6

2006/7

2007/8

2008/9

2009/10


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New Developments Bidding hots up for £320m Kickstart Housing programme The Woodberry Down scheme in Hackney received HCA funding to kickstart development, with work now underway by Berkeley to build 116 homes thanks to £16m of HCA funding.

This response [to the Kickstart programme], and the sector’s wider support for our initiative… told us there is an opportunity here to do something different. To maintain momentum and make the most of the current favourable market conditions we now intend to move quickly… on HCA schemes and other developments across the country Chief executive of the HCA, Sir Bob Kerslake

Bids have flooded in from housing associations and private house builders for a slice of a £320 million package to kick-start stalled housing projects. The Homes and Communities Agency had received scores of bids ahead of the Monday 8 June deadline for its Kickstart Housing Delivery programme. The funding will provide an extra 10,000 new homes over the next two years, with HCA chief executive Bob Kerslake saying he wants 80 per cent of the budget to be spent this year. Bids have been submitted by many of the major housebuilders, including the UK’s three biggest - Barratt Homes, Taylor Wimpey and Persimmon. Significant projects include a £200 million Barratt Homes and David Wilson development called Blake’s Mead in Felpham, Bognor Regis, to build 700 homes.

This is the latest incarnation of Rafael Viñoly’s proposals for Battersea Power Station in south-west London, which will include 3,700 homes and 1.5 million ft² of office space.

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The London Thames Gateway Development Corporation has given planning permission for this creative quarter in Barking, including the restoration of granary building The scheme, designed by Schmidt Hammer Lassen and submitted by Rooff Holdings, is designed to hold 7,000m2 of work space for artists, 220 homes, offices and cafes.


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Comment and Analysis Comment “The country is facing an unprecedented housing crisis. The number of new homes being built this year is expected to slump to an 88-year low, while waiting lists for affordable homes have hit record levels.” David Orr, National Housing Federation CE

Residential looking brighter In recent months, various initiatives such as those led by the Homes and Communities Agency (HCA) together with the recent Rugg review of the private rented sector (PRS) should provide some fillip to housebuilders. It is pleasing to see that the HCA has been quick to act by introducing initiatives such as ‘HomeBuy Direct’ and ‘Kickstart’. HomeBuy Direct has been designed to provide equity loans to help first time buyers get a foot on the housing ladder and purchase selected properties from one of the HCA’s selected development partners. Kickstart is a £400 million programme announced in the last Budget targeted at housing associations and private developers holding schemes of at least 50 units with detailed planning consent. HTTP :// WWW .CNPLUS .CO.UK / SECTORS / HOUSING /RESIDENTIAL-LOOKING BRIGHTER /5203132.ARTICLE The ever-changing housing minister John Healey will be the fourth housing minister in about 18 months, and while ministers moving on is a reality of political life, it is a frustrating one. Yvette Cooper was in post for long enough to fully understand the policy detail and repercussions and develop an increasingly pro-active stance taking these on board. But Caroline Flint's and Margaret Beckett's shorter tenures meant that we needed to reinvest in relationships at a very challenging time. HTTP://WWW.BUILDING.CO.UK/STORY.ASP?SECTION CODE=749&STORYCODE=3142377&C=2

John Healey is the new Minister for Housing following the resignation of Margaret Beckett.

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Council houses: return to a golden age? The government has made £100m available for councils to start building homes again. So is this the start of a glorious return to a golden age?

The growing sense of déjà vu has been heightened by the somewhat implausible return of council housebuilding. At the start of May, the housing quango, the Homes and Communities Agency (HCA), launched a £100m scheme that should enable councils to build about 900 homes. It’s a far cry from the 116,300 built by English councils in 1975, but is nevertheles double the number they produced in 2008. HTTP :// WWW .BUILDING .CO.UK / STORY .ASP ?SECTIONCODE =32&STORYCODE =3142095&C=3


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Finance It was this time last year that housebuilding stocks began their descent in earnest. By October shares had dipped to their low point in the wake of the Lehman collapse. A year on, amid tentative talk of a recovery, there are signs that housebuilders’ shares are on the mend. In fact, with the exception of volatile old Taylor Wimpey, which investors could have made a killing on if they had bought in at the right time, most have recovered to the shaky levels of a year ago

Persimmon

Taylor Wimpey

Flats to go in fire sale after bank pressure A new build block of 167 flats is to be offloaded in a half price fire sale. All 167 flats at the Galliard Homes built Wharfside Point South in Canary Wharf are up for sale th tomorrow ( 13 June) and Sunday for a minimum discount of 30 per cent, the majority being over 50 per cent reduced.

Barratt

Galliard decided to hold the discount sale after being told it must repay the bank by the end of this month. HTTP :// WWW .CNPLUS .CO.UK / SECTORS / HOUSING /FLATS -TO-GO-IN-FIRE -SALE -AFTER -BANK PRESSURE /5203420.ARTICLE Major investors look to fund UK private rented housing ING Real Estate, Schroders, Legal and General and Wellcome Trust all express interest in funding the formation of a private rental sector in the UK.

Galliford Try

Private investors have put forward expressions of interest in helping the HCA develop a model for a new private rented housing sector in England. The major firms all expressed their interest in time for the deadline set by the HCA of 1st June HTTP :// WWW .CNPLUS .CO.UK / SECTORS / HOUSING /MAJOR -INVESTORS -LOOK -TO -FUND-UK PRIVATE -RENTED-HOUSING /5202952.ARTICLE Banks accused as construction firm Harry Lynch is forced under The Civil Engineering Contractors Association has accused banks of being short-sighted after one of its founding members went under last week. Building and engineering firm Harry Lynch was placed into liquidation by administrators KPMG, making 21 staff redundant. The West Lothian based firm had failed to pay a bill of £24,131.97 to a builder’s merchant after being hit by the collapse of Scottish housebuilder MCA Homes in November, for which it was carrying out civil works at a housing development. MCA’s collapse meant it defaulted on a £97,000 debt to Harry Lynch. Bosses at Harry Lynch say they arranged several meetings with the firm’s lender, the Bank of Scotland, in a bid to ease the cashflow problems. But Bank of Scotland refused to grant extra funding to the £1.5 million turnover business READ MORE

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On the lighter side Our regular collection of Health and Safety Frighteners courtesy of WWW.BUILDING.CO.UK Casual work Thanks to Mr J Clark for this picture of a job in Bournemouth He writes: “The operative had no hat, no goggles, no boots, no gloves and communicated with the van driver by tapping on the roof with his right foot. The petrol filler cap is on the side below the sparks …” Workers, rising Milton Robinson took this photo in Sharjah, UAE

Women and children first Chivalry is not yet dead for the good folk of Bolton. Dave Billinge snapped a digger driver who, realising his bucket was blocking a footpath, kindly lifted it out of the way. Seems he can’t look either...

As hot air ballons do not work in the UAE due to the heat, this is the next best thing. The gentleman with a head for heights is apparently on his way back to work, having hitched a lift to the ground for a tea break. Must be tasty tea...

Brooming heck What this fellow is actually attempting to do with that broom is not entirely clear, but whatever it is appears distinctly unwise This unseemly set-up was snapped in Birmingham by Dave Scarborough, who comments: “I particularly like the way he's resting his weight on the broom so as to reach just that little bit further! My colleagues and I stood watching them for a while, and his mate slid down the roof with the tub so as not to shake the ladder the chap was standing on!”

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Extra resources Extra resources

HSBC ONLINE PUBLICATIONS News Resources: WWW.BUILDING.CO.UK WWW.CNPLUS.CO.UK WWW.HOUSE-BUILDER.CO.UK WWW.NHBC.CO.UK WWW.FT.COM HTTP://WWW.BUILDERANDENGINEER.CO.UK/NEWS

Recommended this month… CBI ECONOMY FORECAST HOMES AND COMMUNITIES AGENCY

Feedback To subscribe to this newsletter, or to send feedback, news or requests for further information, please email NEWS@DBD.CO.UK About this document. DBD News is available on request as a PDF file. If you are reading the PDF edition of DBD News, you will need Adobe Acrobat Reader version 7 or later on your viewing device. You may need to adjust the security options on your version of Adobe Acrobat reader to allow the use of the internet and navigation links. For Adobe Reader 9, go to Edit > Preferences > Document > and look for the setting that displays the document in PDF/A mode. This needs to be “Never” To get the latest Adobe reader, visit HTTP://GET.ADOBE.COM/UK/READER/

About DBD DBD Distribution Limited is the UK’s number one appliance distributor to the housebuilding sector, supplying and installing white goods, gas fires and shower enclosures. Also part of the DBD family is Cottura Kitchens, supplying premium grade kitchen furniture, design services and installations to the luxury housing market. For more information visit WWW.DBD.TEL

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DBD News June 2009  

Latest housebuilding market news from the number one domestic appliance distributer in the UK

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