ROOF Blog archive

Inequality in Britain is worse than ever according to a new study into childhood. Millions of children face ’multiple deprivation’ in adulthood as a result of the circumstances of their birth, the report – Reducing Inequalities – found. Using data from a study which tracked the lives of 17,000 people born after 1970 they found that 10 factors in childhood, including the home the child is brought up in, their parents’ jobs, and the family income, all have a huge impact on the child’s future prospects.

With repossessions up 30 per cent over the past year to their highest level for seven years, and expected to double to more than 45,000 next year, a new ’sale and rent-back’ scheme may not be the answer to debt problems. The scheme – where you sell your home at below market rates, then use the proceeds to clear mortgages and other debts whilst becoming a tenant in the house – may look attractive but in reality people are vastly underselling their home’s value, in some cases by up to 65 per cent. In return they are left at the mercy of some unscrupulous owners who offer only assured short-term tenancies, which can change if the house is then sold again. Unlike equity release schemes, these schemes are currently unregulated.

If you want a good lifestyle at an affordable price, then look no further than Beverely, East Yorkshire. The town came top of 20 British towns and cities in the inaugural Royal Bank of Scotland report. Maidstone in Kent came second, and Chester third. The ’affordable affluence’ index also threw up some surprises, featuring Huddersfield, Solihull and Salford. A spokesman from RBS said that: ‘A moderately wealthy lifestyle is well within the reach of more people than probably realise it’.

The government is raising billions of pounds more in green taxes than it needs to remove the UK’s carbon footprint, according to the Taxpayers’ Alliance. The alliance calculated that in 2005 emissions had damaged the environment to the tune of £11.7 billion, yet green taxes and charges raised £21.9 billion, so that UK households were ‘overtaxed’ by £400 a year. A YouGov poll of 2,000 adults found that the 63 per cent of those asked agreed with the statement: ‘Politicians are not serious about the environment and are using the issue as an excuse to raise more revenue from green taxes’.

Reaction to yesterday’s independent report into housebuilding in the south east, which recommended building 32,000 new homes annually in the area over the next two decades, has been strong. Much is being made of the report’s recommendation that leaving the green belt untouched ‘cannot be consistent with government policy’. Tory shadow planning minister Jacqui Lait called it a ‘green light to green belt desctruction’ and said that ‘government inspectors were planning to let rip with the concrete mixer’. The Campaign to Protect Rural England said it had ‘major concerns’ about building on green belt land. However Stewert Baseley from the Home Builders Federation, warned that the figures did not go far enough and more people than ever will be unable to buy a home. ‘The proposed 32,000 homes will not go anywhere near meeting the housing need in the region…this is less than required to meet government household growth projections. There is a clear need for 40,000 new homes per year to meet [the] housing shortfall,’ said Baseley.

The government responded to the criticism saying it never specified a regional target, and ‘it is both wrong and misleading to pretend otherwise’.

In other news, the National Consumer Council (NCC) called on greater statutory protection for homebuyers. In reponse to an Office of Fair Trading study into new builds, the NCC said that consumer laws are so outdated that homebuyers have more protection when buying a kettle than when purchasing a new home. Delays moving in, poor after sales service, and poor quality finishing all add to the problems homeowners face and have lead to the NCC to call for something similar to the Sale of Goods Act 1979 which protects consumers when things go wrong.

Following yesterday’s reports that several high street banks were unhappy with home information packs (Hips), HSBC and Barclays have denied the claim. The lenders said they just wanted them ‘vetted by a solicitor’. A spokesman for HSBC, the high street bank which has four per cent of the new mortgage market, said that ‘we have never accepted private searches rather than those from a solicitor…We just need to be sure that the customer’s solicitor will sign off the search so that it is covered by their personal indemnity insurance’.

Across the pond, Lehman Brothers, the investment bank, has become the largest Wall Street institution to exit the sub-prime mortgage market. Until recently, Lehman was one of the biggest dealers in the market, racking up $50 billion of sub-prime debt in the past two years.

In another housing market wobble, America’s largest builder of luxury, top-end homes warned that it was seeing the highest level of cancellations in its 21-year history. Profits have fallen 85 per cent in the three months to June, following a 17 per cent drop in new home contracts.

The number of empty homes and second homes in Scotland has risen by 11 per cent in the past 10 years, standing at 101,445 houses in 2006. SNP MSP Christine Grahame highlighted the issue saying she was particularly concerned by a rise of 104 per cent in South Lanarkshire. She added that there were a number of options to reverse the trend including taxing the owners of vacant property. Meanwhile, in parts of the Barnsley area in South Yorkshire, homes are being demolished and rebuilt because they are undesirable, including numerous council homes in areas where there are waiting lists for houses. Owner-occupiers will be offered the chance to be bought out at market prices and will also be paid a ‘home-loss and disturbance’ allowance. They will be given priority when new houses are built, along with council tenants who will be moved into temporary accommodation whilst the work is being comopleted. The works will cost £15 million.

It’s official: noisy neighbours and incessant traffic can kill you. Up to 6,500 Britons are dying after suffering health problems like heart attacks and strokes, brought on by noise pollution. The World Health Organisation reported that three per cent of deaths from heart disease can be traced back to the stress and exposure to noise. The data, whilst preliminary, shows that complaints about noise have increased five fold in the past 20 years.

The beleaguered home information packs (Hips) are back in the news as mortgage lenders said yesterday they might not accept a crucial part of the report. Several lenders have insisted that homebuyers would have to pay up to £200 for their own local authority searches, as those provided in the packs were not necessarily underwritten by a solicitor. A spokesperson from HSBC, one of the lenders critical of the personal land search, said: ‘If someone wants to buy a house from someone who has a HIP containing a personal local search, we would tell their solicitor we would not lend to them unless they commissioned their own search’. The Royal Institution of Chartered Surveyors claims that sales of four-bedroom houses have dropped dramatically since their introduction on 1 August. Hips are being extended to three-bedroom homes on 10 September.

A report by Help the Aged has called for the government to help fund a network of ‘handypeople’ who can perform basic home improvement tasks for the elderly to enable them to stay independent for longer, and reduce their need to get social or residential care in the long term. Fitting a bath rail for example could improve the lives of many older people who have trouble washing themselves and reduce the risk of falls or hospitalisation.

Childhood isn’t all it’s cracked up to be either, according to a report by the Sustainable Development Commission (SDC), which found that children are at risk from poor local development. The report recommends that housing and schools should be built away from pollution and noise ‘hotspots’ and include an traffic free area given over to parkland. The report, Every Child Matters, argues that a child’s wellbeing cannot be met without considering the environment.

The credit crisis appears to be worsening in the US. The number of repossessions in the states soared in July, an increase of 93 per cent on the same month last year, and a 9 per cent rise on June’s figures – one in 693 households filed for foreclosure in July. Falling sales and decreasing prices have made it harder for homeowners to sell their homes and clear their debts.

As protesters yesterday blockaded BAA headquarters, it emerged that a coalition of 12 communities, or over two million people, will have their homes affected by Heathrow’s new third runway, terminal, and flight paths. Under government proposals which will be sent out for consultation in the autumn, the number of take offs and landings will nearly double to 800,000 a year, with the third runway adding at least an extra 240,000 flights alone over areas previously not flown over – such as Chiswick, Maidenhead, and Notting Hill. The flight paths to be used are still to be decided by the Civil Aviation Authority and will not be published until next year, months after the consultation paper is due. A group of 12 local authorities in and around London opposed to the third runway plans, have accused the government of exaggerating the economic benefits from aviation and of failing to measure the environmental impacts.

The government has applied for EU flood funding from the EU Solidarity Fund (EUSF). The cost of the floods is estimated to run into £3 billion covering over 60,000 claims from both domestic and commercial claimants. The European Commission will decide if the application is successful, and resources will then be available in nine to twelve months time. The commission can only provide a proportion of the costs however.

Mortgage lending soared to a record high in July as borrowers were rushing to remortgage before an increase in interest rates. The Council Of Mortgage Lenders (CML) announced a record gross mortgage lending total of £34.4 billion in July, up 13 per cent from a year earlier, although down one per cent from June.

This is despite at least seven UK sub-prime lenders having raised their interest rates (some by as much as one per cent) or withdrawing products. The sub-prime market covers only about 10 per cent of the UK home loan market and the cost of long-term fixed rate home loans for these lenders is expected to increase. The impact of the crisis in the US over sub-prime mortgages came to a head on Friday when the Federal Reserve, the US central bank, stepped in to prevent US lenders from going bust. It also cut the cost of borrowing for banks, which had stopped lending to each other.

Reports from the Consumer Credit Counselling Service (CCCS) shows that young homebuyers owe two-thirds more than tenants in the same age group. Homeowners under 24 owe an average of £20,290 in unsecured debt, compared to £12,113 for renters, with personal loans accounting for more than half the debts. Malcolm Hurlston, chairman of CCCS said there is a danger in young people getting on the housing ladder ‘before they are financially ready’.

Communities and Local Government (CLG) are believed to be on the brink of overturning a local authority policy which encourages increasing use of renewable energy technologies – the so-called ’Merton rule’. Named after the London borough which established it in 2003 it requires any new building to reduce its carbon emmissions by 10 per cent by using renewable energy. The rule has spread to over 150 local authorities around the country. While the Royal Institute of British Architects fully supports local authorities being able to demand ‘higher building standards than those set nationally’, it is believed that CLG has come under pressure from housebuilders who ‘do not want to bear the cost of adding things like solar panels’ to the building they are constructing to make them more green.

In an open letter to the Environment Secretary Hilary Benn, the Association of British Insurers’ (ABI) called on the Environment Agency to increase spending on flood defences. With the cost of this summer’s rains already approaching 60,000 claims totalling £3 billion, the insurance industry is bracing itself for more bad news as the flood plain is so saturated that even normal rainfall could lead to further flooding. The ABI welcomed the Environment Agency’s announcement last month that flood defence spending would increase to £800 million in 2010/11, but stated that the UK is unique in the EU by covering flood risk through insurance, and not through government. They want Mr Benn to reassess the government’s housing plan, particularly its response of building new developments on flood plains.

A Freedom of Information request and parliamentary questions have lead to the Conservatives and Lib Dems accusing the governement of training council tax inspectors to ‘snoop’ on desirable properties across England in an attempt to revalue millions of homes. A 120 page handbook has been issued to caseworkers by the Valuation Office Agency, where they are asked to compare homes in ‘Quaintown’ and ‘Happyville’ with those in ‘Greytown’ which has worse surroundings, schools, parks, and slower road links. The inspectors have also been advised to measure gardens, look at attic apace and examine architectural plans, while taking into account double glazing on windows, central heating, and the number of bedrooms, all of which could help boost the price of a property. The Government, who have already postponed revaluation of council tax denies the claim.

House prices rose by just 0.6 per cent in the past month in England and Wales, while prices for London homes fell for the first time in a year, after five interest rate rises in the past 12 months and ongoing uncertainty in the US over sub-prime mortgages. The annual housing market inflation rate is still running at 12.6 per cent according to the Council of Mortgage Lenders, althought they think this figure may be fuelled by the large number of people remortgaging to better deals in the belief that rates will go higher still. At the same time, the average time it takes to sell a house in August rose to 85 days, up from 80 days a month earlier.

Rising interest rates mean more people are putting money aside, but the amount they are saving has fallen by one third compared to this time last year, according to Birmingham Midshires. Higher mortgages, petrol prices and utility bills, have squeezed savings levels to an average of £910 per person in the second quarter. The bank recommends people have three months’ salary put aside in case of financial emergencies – around £5,899 for those on an average income. The report comes on the back of research from the Office of National Statistics which revealed the lowest savings ratio since the 1960s.

Meanwhile, research from Scottish Widows shows more than one million pensioners (one in five) is still paying off a mortgage, and one in three is racking up average credit and personal debt of £5,900. With many buying a home later in life and state pensions not keeping pace with inflation, the problem may only get worse. The research suggests total debt of those over 65 has hit £57 billion, while pensioners’ average credit card and personal loan debt has risen by 42 per cent in the past year.

A Sunday Times investigation found Bentley-driving speculators are snapping up homes in ‘low demand’ areas targetted with government cash, and reaping large rewards. At one property auction in Hull, more than 20 run-down homes in the regeneration zone changed hands in less than an hour for £400,000. One property company is reported to be expecting a profit of £18,000 three months after buying one home in the city – equivalent to an annual return of more than 200 per cent. In some areas the government has had to spend up to £100,000 buying homes so they can be knocked down.

Buyers will pay more for sub-prime mortgages because of turmoil in the credit markets. DB Mortgages, owned by Deutsche Bank, this week pulled all its sub-prime products and is expected to increase their prices when relaunching the range of products later this month. Lenders are facing upward pressure on rates as capital markets funding becomes increasingly expensive and investors grow more cautious about buying bonds backed by riskier sub-prime mortgages. About 30 lenders, mainly investment banks, have recently moved into the UK sub-prime mortgage market which has led to fierce competition and a reduction in rates charged to borrowers with patchy credit history.

Defaults on UK subprime mortgages have been far lower than in the US but the level is rising. Last week the Council of Mortgage Lenders said that home repossessions had jumped 30 per cent year-on-year.

Victims of the summer floods are facing having their homes repossessed as they struggle to keep up with mortgage and rent payments, warned Citizens Advice (CAB). The charity appealed to mortgage lenders, housing associations and private landlords to suspend rent or repayments, or pay for alternative accommodation while a property is uninhabitable. The CAB has published a factsheet for tenants affected by the floods – providing tips and information on their rights under the circumstances.

Independent verifiers accompanying local authority officials in rough sleeper counts have said that some councils are labelling immigrants as tourists to avoid including them in official figures. Other councils are not counting eastern Europeans because they ‘don’t want to acknowledge they have a problem and have to do something about it’. Squatters, travellers, or anyone with a sleeping bag, as they were not ‘clearly bedded down’ are also being left off the counts.

Communities and Local Government has warned of a rising perception that white tenants are being discriminated against by social landlords. Between 2001 and 2005, the proporation of white people feeling they would be racially discriminated against by a housing organisation increased from 15 to 21 per cent. The statement came as a paper was published by the Improvement and Development Agency claiming that settled communities worry about the impact migration has on housing availability, with migrants themselves possibly becoming scapegoats.

England’s largest social landlord, Birmingham Council, is selling off £150 million worth of its housing development land to pay for its decent homes programme. The council plans to offer up to 200 acres of land to housing associations and developers over the next three years, which could deliver 4,500 homes in the city. Birmingham currently has around 30,000 people on their waiting list for housing, and the money raised will speed up the supply of affordable housing while helping to pay for a major refurbishment programme of existing stock.

The Taxpayers’ Alliance (TPA) published new research today showing how the 2012 Olympic games in London will add almost £4 billion to construction costs in London and the South East over the next five years. Construction costs for the games will account for over half of the total £9.35 billion bill for the event and TPA suggests that costs will increase by an extra £921 billion for private housing, £640 million for public housing, and £444 million for infrastructure such as public transport.

The government’s beleagured home information packs have come under fire today, after a report by the National Audit Office (NAO) attacked ministers for hiring consultants to develop the packs who had a financial interest in a company involved in the scheme. The report, prompted by a complaint from the Royal Institution of Chartered Surveyors (RICS) concluded that there was a ‘clear conflict of interest’ and that Communities and Local Government ‘fell far short of the appropriate practice’ in developing the standards of the certification scheme. The NAO says it will shortly conduct a more thorough investigation of HIPs.

Most papers are commentating on the effects of yesterday’s Band of England quarterly inflation report which projected that inflation would fall to the 2 per cent target in two years, as long as interest rates rise by a further quarter point. Most experts accepted that interest rates almost certainly will increase to six per cent some time later this year, even though the Bank has acknoweldeged that families are already spending more of their incomes on mortgage payments than at any time since the housing crash in the early 1990s.

And finally, a Dolly Parton fan, who regularly and loudly played Dolly Parton music at home from 11 in the morning until early the following day, is facing eviction, after ignoring repeated council anti-noise orders. On 27 July police and council officials raided the home and seized stereos, CDs and televisions before bringing legal action of an asbo and possible eviction.

The US housing market has been rocked by a further crisis as its 10th largest home lender, American Home Mortgage (AHM) has filed for bankruptcy. Whilst a sub-prime lender, AHM specialises in mid-tier borrowers (’Alt-A’ loans) which are thought to be a better credit risk. Analysts predict that the US Reserve Bank will be forced to cut interest rates soon, as 1.5 million people could default on home loans worth up to £108 billion.

Communities and Local Government is to set up a select committee to look into the cost of making homes eco-friendly and who should pay. The committee will be tasked with looking at what can be done to make homes more energy efficient, and whether methods of adapting homes are up to standard.

With the housing market there are always winners and losers. Two winners cashing in on the recent government housebuilding bonanza are construction company Morgan Sindall, which announced record first-half profits as a result of an increased demand for affordable housing, along with HBOS, which has just acquired a stake in the social housing maintenance company, Apollo Group. Both companies are bound to benefit from the government pledge to spend £6.5 billion on social housing over the next few years, £8 billion on affordable housing and a commitment to provide billions of pounds towards the ‘decent homes’ initiative to repair and maintain the national housing stock.

If you live in the South Tyneside area and have a spare room, you may be able to make a bit of money out of the housing boom too. College staff at the South Tyneside College in South Shields, and local residents, are being asked to open their homes to students due to an accommodation shortage. With an influx of hundreds of foreign students expected in the next few weeks, the college has had to resort to a newsletter appeal throughout the local area.

A report out today by the National Federation of Housing shows that the housing boom is showing no long-term sign of slowing down. The report states that come 2012, housing in London will have increased 40 per cent pushing the average cost of a house in London to almost £500,000 while the average cost in the UK will be more than £300,000. Over the past 10 years, house prices have risen 156 per cent compared to a rise of 35 per cent for income.

The Benefit Fraud Inspectorate (BFI) have visited 19 of London’s 33 councils, after the Treasury became concerned over the soaring cost of temporary accommodation, which has more than doubled throughout the UK in past three years to £539 million. Payments made for procuring temporary accommodation in the private sector have been looked at as it is believed that councils may be inflating the amounts they claim, to the maximum housing benefit cap level.

The Conservatives accused the governement of generating £70 million extra in a ‘stealth tax on housing’ with the introduction of HIPs and energy performance certificates. With the extension of the regulations planned to include smaller homes and rental proerties in the next year, the opposition believe that VAT receipts for these transcations will total at least £70 million each year.

The Homelessness World Cup was held over the weekend, and some good footballing news at last is that Scotland won it. Beating Poland by nine goals to three, Scotland played before a capacity crowd in a Copenhagen city square. Next year the cup will be held in Melbourne, Australia.

The Mayor of London has rejected Hammersmith and Fulham council’s proposals to reduce its affordable housing targets from 65 per cent to 40 per cent.

The Times reports that a 93-year-old man who took out a 17,000 loan nine years ago from Barclays has seen his debt soar to £116,000.

An Ipsos Mori poll of 2000 people across the UK, published in the Guardian, has found that six out of 10 people believe buy-to-let reduces the amount of affordable housing for those wanting to buy.

The number of people having their homes repossessed has jumped by 30 per cent over the same period past year, according to latest figures from the Council of Mortgage Lenders. An estimated 14,000 properties were repossessed in the first six months – but the data also shows that the number of mortgages in arrears actually fell by 3 per cent.

More than half of London councils are facing a probe by the Benefit Fraud Inspectorate over profits they have made from temporary accommodation for homeless people, Inside Housing reports. Councils receive government subsidy to procure private sector housing but many have been inflating the amounts claimed to maximum housing benefit cap levels, the magazine says. Nineteen of London’s 33 boroughs have come under fire for soaring costs, which helped push up the national bill for temporary accommodation to £539 million.

Inside Housing also reveals a ‘plot’ by regional assemblies to obstruct reforms to increase house building announced in the housing green paper. The green paper announced that all regional spatial strategies would be reviewed over the next three years. But assemblies covering areas in the east and south east said they would resist moves to review their plans.

Meanwhile the Housing Corporation broke the 40,000 barrier last year for the first time since Labour came to power, delivering 41,657 affordable homes – 5,000 more than the government target.