A big welcome to John Who

The latest cabinet reshuffle has seen yet another housing minister installed. This time it’s John Healey, someone I had never heard of before. I am struggling to remember the holders of this ill-feted post: in reverse order it seems to be Margaret Beckett, Caroline Flint, Yvette Cooper (all within the past two or three years) and before that…..I can’t remember. Or maybe I never knew.

The point is that this office of state is a revolving door. No one stays put for more than a few months. How on earth are they meant to get to grips with their brief?

If this was a school, it would be deemed to be failing. If it was a hospital, it would be dangerous. If it was a business, it would be going bust. But it’s a government, so nobody expects it to do anything anyway.

Pilkington energiKare

I came across one new product at BRE’s Onsite 09 event, which was a new type of energy saving glass being marketed by Pilkington. It’s made in Japan, by Nippon Glass, owners of Pilks, and it consists of a two panes of glass separated by a vacuum gap of just 0.2mm. In this country, it’s being aimed fairly and squarely at the listed building/Georgian sash window market, because you get a very good U value from it (Centre Pane value 1.4) yet you can’t tell it’s not single glazing.

Well actually, you can, if you look closely. You can’t see that it’s two panes of glass, but the 0.2 gap has tiny black spacers located within it which you can see if you look close up – they appear to be a series of black dots. If the vacuum fails, the spacers fall out, so you have a visible clue that the unit is no longer working. But of course the units won’t fail. Will they?

The units are made up before the vacuum is applied. Each unit comes with a little grommet through which you can suck out all the air. There is a minimum unit size of 0.4m2, so a sash window will have to be done in one and glazing bars applied afterwards. But that’s not a big problem.

It looks as though they have got a product which can provide good energy efficiency and yet satisfy the English Heritage/Conservation Officer lobby. At around £300/m2, it will cost, but if done as a package of overall window refurbishment or replacement, it’s not that prohibitive. Just a shame they’ve given it a horrible name: Pilkington energiKare. I’m really getting to hate inTerCaps, aRen’T yOu?

Insite 09 and a "huge surge of anger"

I spent the day at the BRE in Watford attending their Insite 09 exhibition. I went today (Tuesday) because there was a conference on the Existing Stock and, in particular, how to reduce the carbon emissions created by it. This is a debate I want to be part of.

As I pulled up at the entrance gate, I was handed a leaflet explaining where I should park. It told me I wasn’t allowed to do more than 20mph on site, that I musn’t smoke, nor should I attempt to use a mobile phone whilst driving the quarter mile through the site. It also told me not to park on the cross-hatched areas, nor the double yellow lines. And finally it warned me that if I broke any of these rules I would be asked to leave the site and my behaviour would be reported to my employers. All to get from the entrance gate to the car park at the back of the site. Welcome to the BRE.

The conference speakers were thoughtful and articulate, but I couldn’t help feeling that the suggestions being put forward were not really going to get to the root of the problem. Nick Raynsford, the Construction Industries’ pet MP, expressed his frustration with the Treasury which repeatedly refuses to pursue a more progressive taxation regime which might encourage green refurbishment.

In the Q&A I asked him if it was not now time to introduce a carbon tax on domestic energy bills: whilst the cost of petrol at the pump is nearly 70% tax, domestic fuel has just 5% added to it in VAT. His answer was informative: he suggested that the Fuel Cost Escalator had not been popular, especially when oil prices went through the roof last year, and that the government would risk facing “a huge surge of anger” if it brought in something similar on gas and electricity bills. I wouldn’t have thought that bothered the government too much. Afterall, it didn’t stop them going to war in Iraq? Or for that matter fiddling their expenses? So what’s their problem?

Is this slump all about peak oil?

We were hearing a lot about peak oil last summer when the oil price went to $147 a barrel. Since when, of course, the price has fallen through the floor, back down to 2005 levels, and, lo and behold, stories about peak oil have dropped off the radar.

But the issue refuses to go away and at least one serious commentator, Steven Koppits, suggests that we may have already passed the peak oil moment and that the global recession is the result.

Ultimately, the inability of the oil supply to keep pace with global demand proved to be a key contributing factor to the current recession. I would note, however, that the proximate cause of the recession is China, not peak oil. China ultimately provided both the financial liquidity and the commodities demand which brought down the global economy. Were China not so large and not at its current stage of development, peak oil could pass without anyone noticing for some time. As it was, China hit its stride just as the oil supply was stumbling. The issue was not, therefore, peak oil in and of itself, but rather the supply/demand imbalance caused by the inability of the global oil supply to adjust to China’s incremental demand.

It’s a very interesting, thought provoking piece and, to me, it makes a lot of sense.

"The Housing Downturn" - a review

Graham Norwood is a prolific and well known property journalist who has produced a book about the state of the housing market which he has subtitled “A Guide for Estate Agents and Developers.”

There are no earth shattering revelations here but it provides a useful summary of the events of the past three years. Graham doesn’t like to use the term “Crash” for what has happened to the housing market — he suggests his journalist colleagues have debased the term — but then he buys into the notion that things will recover soon. “Even now I believe that residential prices, like oil, will rise in value over the long term and within the next decade prices will surpass those seen at the recent peak in 2007.”

What gives him such confidence in this prediction? He trots out the hoary old chestnut that there is a shortage of homes in the UK and that in the long term this lack of supply will push prices up. But he conveniently ignores the fact that this was exactly the same reason used to justify ever-rising house prices rises in the years up to 2007. If this really was the case, then house prices would never have fallen back at all. What the “correction” has shown us is that the predictions for both population growth and household formation were as much products of the long speculative housing boom as causes of it. And both these supposed “drivers” of house price rises may be just as likely to stabilise or even head south, as has happened in Germany for many years. There is no hard and fast rule that says they will continue to climb upwards for ever and a day.

And if they don’t, then there is no particular reason for house prices to bounce back to where they were in 2007, anymore than there is for the FTSE 100 to regain its previous peaks, or the oil price to go back through $147 a barrel, or wherever it got to back in the crazy summer of 2008.

The book has a good section on estate agents, a subject I don’t know much about. Apparently, Rightmove is toast. Globerix is the future, because it doesn’t charge a fat fee to the agents listing. Or maybe not. It’s not quite that simple.

And the best section of all is where Graham intrepidly goes where few reporters ever dared, to an Inside Track investor’s presentation. One of the very definite plus points of the property “correction” is that steam-ups like this can no longer happen.

On the other hand, this book itself is a very slim volume. I read it cover to cover in three sittings, totalling maybe three hours. At around £25 to buy, it’s more than a bit pricey. Nevertheless, it’s a very easy and approachable read and I feel sure it will become a valuable reference point in years to come when people try to remember what these times we are living through were like.

Arbury Park revisited

This is a forlorn spot on the northern edge of Cambridge. I revisited yesterday. It's new, its meant to be an exciting place to live and already it looks like a slum. Desperately sad.