News on house building and policing City awaited
A TREASURY White Paper on reforms to financial regulation will be the highlight of this week, which will also bring news from a host of housebuilders.
More clues on the health of the UK property market will be offered when a trio of builders give updates from the sector.
Hopes have been mounting of a recovery in house prices, so the market will be looking for any confirmation of this in comments from firms including Bovis Homes, York-based Persimmon and Newcastle’s Barratt Developments.
Nationwide’s June property value figures added to the optimism when it said prices had risen 0.9% to average £156,442 – the third increase in four months.
Recent updates from other builders have also suggested it may not just be a blip.
Taylor Wimpey, the UK’s biggest housebuilder, said last month the market should avoid a severe downturn as it reported a 73% rise in forward orders since the year end.
Newcastle group Bellway and Redrow have both recently given upbeat outlooks, while many are now beginning to dust off mothballed projects.
Persimmon will update tomorrow when its debts will also come under the spotlight, with analysts looking for further reductions from the £905m seen last June. Numis Securities said it expected net debt now to be below £600m and it saw the group as “one of the most attractive housebuilders”.
Barratt’s update on Thursday comes less than two months after it last offered a pep-up for the industry with news that visitor numbers and reservation rates were improving. Bovis is last up, on Friday, and Numis is forecasting an equally rosy picture from the group, expecting higher sales and broadly stable prices.
Chancellor Alistair Darling is set to lay out his plans for the future of banking regulation during the week.
The report will finally answer speculation over a power struggle between those responsible for policing the financial sector.
The Bank of England, Treasury and Financial Services Authority (FSA) have reportedly been at loggerheads as regulators vie for a meatier role, although all three have played down rumours of a spat.
City minister Paul Myners has said the tripartite system will remain, with “macro-prudential regulation” a joint effort. Lord Myners has dismissed reports of a rift and said both the Bank and FSA were likely to see their responsibilities grow.
The Bank of England’s clamour for a greater role has risen in volume in recent weeks as governor Mervyn King called for an extension to the powers it gained under the Banking Act.
But Mr Darling has already hinted that the Bank might lose some of its influence and the FSA would take on extra powers, such as to restrict short selling.
Whatever the details of the White Paper, the seemingly conflicting positions of the key players means the regulatory landscape could well be littered with debate and disagreement for some time to come.
