Lunchtime news Tuesday 21 August 2023

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 The flight paths to be used are still to be decided by the Civil Aviation Authority and will not be published until next year, months after the consultation paper is due.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.