ROOF Blog archive

The government has admitted that it seriously underestimated the number of immigrants working in the country. Work and Pensions Secretary, Peter Hain, originally stated in parliament that 2.7 million jobs had been created under Labour, of which 800,000 had gone to people born overseas. He then revised this figure to 1.1 million. The Conservatives however released figures from the Office for National Statistics that put the total number of migrant workers at 1.5 million. At least 40 local councils have complained to the government that the underestimation of migrants has placed massive strain on their budgets.

As commuting times and house prices increase, more people than ever are now renting a room for the week in the city they work and commuting back to their homes at the weekend. A flatshare website has seen an increase in the number of ads placed for mid-week house shares from just a couple six months ago, to nearly 100 a week. The average age of those sharing accommodation is now 33 plus, compared with 31 in 2005. The average age of flat sharers will be 40 by 2012 if the rate of increase remains the same.

Naomi Eisenstadt from the government’s social exclusion taskforce has suggested that unemployed council tenants should be told to get a job. The comments come as new figures show that one in three heads of social tenanted households are unemployed. Eisenstadt said there was a ‘failure of housing and employment to join up’.

London MPs have come under fire for claiming living expenses for running a second home in the capital. Sixteen greater London MPs are receiving up to £22,000 a year for the ‘necessary costs incurred when staying overnight away from their main home for the purpose of performing parliamentary duties’. Critics have described the allowance as ‘extraordinary’, especially with the more family friendly hours introduced to parliamentary sittings in 2002.

Staying in London, if you live near a tube station, your property could be worth up to £80,000 more. According to a new survey, only one person in every eight would consider buying a home more than 30 minutes’ walk from a tube station and about one in four would walk no longer than five minutes. The average price of properties five minutes walk from the tube was £467,670 compared with property 30 minutes away at £387,099.

Even after yesterday’s news that repossessions are set to soar by 75 per cent this year, Britons are refusing to rein in their spending. Each day a further £373 million is added to the debt the country faces, increasing the amount of total debt, including mortgages, to £1.38 trillion. The Council of Mortgage Lenders (CML) also forecast a 15 per cent rise in the number of households who are at least three months in arrears on their home loans. And new research by online mortgage company mform.co.uk estimate that there are 33,000 first-time buyers who borrowed 100 per cent or more of their mortgage, and are now at serious risk of negative equity if there is a drop in house prices.

First-time buyers are in fact becoming an ‘endangered species’ according to the New Homes Marketing Board (NHMB), a marketing arm of Homes Builders Federation. In a recent poll of young people, more than 80 per cent feared they could end up never being able to leave rented accommodation. As many more young people stay at their parents’ homes – the figure has increased 20 per cent since the early 1990s – the number of first-time buyers entering the market has fallen, going down by nearly 15 per cent since 2000.

Europe’s biggest bank, UBS, is not immune to the credit crisis either. They have just announced a third quarter pre-tax loss of £300 million, as a result of exposure to the US housing and subprime mortgage market. The bank expects to make a profit in the final quarter of the year, but warns there may be further short term adjustments.

A report by the Joseph Rowntree Foundation has found a mix of private and social housing on estates is essential to stop young people leaving deprived areas to get better jobs. Concentrations of worklessness were created by housing policies which lumped disadvantaged members of society together, so young people were more inclined to think that getting on the housing ladder was their only means of escape.

And finally, thousands of residents in Rome face eviction from their homes as the Vatican is accused of indulging in a ‘speculative frenzy’. While the evictions are not being carried out by the church but by property agents linked to it, it comes at an embarrassing time for the Vatican, after a spokesperson recently said that the lack of low cost housing in Italy was a tragedy for ‘those pensioners or single-income families… who cannot find alternative [accommodation]… and it certainly was not in line with the teaching of the popes on the right to housing’.

House prices fell for the first time in two years this month. During October, prices fell by 0.1 per cent, following two months of zero growth according to Hometrack research, with further falls likely. As the wealthy are turning away from property as an investment, and as City bonuses are dropping, demand for prime real estate in London and second homes in the South West, East Anglia and the Cotswolds is predicted to decrease by up to 60 per cent in the coming year.

Several debt experts warn that news is set to worsen, as they expect repossessions to surge in the coming year. Debt advice organisations, such as Citizens Advice, have seen a sharp rise in the number of calls particularly from subprime borrowers concerned about meeting their repayments. ‘Relative to the size of the [subprime] market there is a disproportionate amount of repossession action happening among people with subprime loans,’ said the CAB. Mortgage advisers, John Charcol, believe that repossessions are set to double next year to 70,000 – close to their highest total set in 1991, and believe that 15 per cent of the subprime mortgage holders will suffer ‘quite significantly’.

And it’s likely that banks will pass on as much of the cost of the credit crunch as possible to their customers. Barclays, Britain’s third largest bank, announced last week that it had cut its savings rates even though the Bank of England has not reduced its rates. And research carried out by the Sunday Times found that most of the largest 10 lenders have failed to pass on falling rates to new borrowers.

David Cameron is set to enter the immigration debate today as he calls for a ‘grown up conversation’ about population control, saying the current net figure is too high. ‘We need a policy to reduce the level of net immigration – and we also need a policy to reduce the pressure of household formation’ he said. Britain’s population is set to rise by 9 million over the next 20 years due to higher life expectancy and net immigration. There will also be a rise in the formation of new households with more people living alone. Cameron is not expected to announce any new policies – just the three ‘vital components’ that will inform his approach – a sober and forensic understanding of the facts; action to ensure a sustainable rate; and action to prepare for that sustainable rate.

This comes as local councils are calling for help to help them cope with the influx of immigrants. The Local Government Association, which represents more than 450 councils in England and Wales, claims that the surge in migrant population has put pressure on local schools, hospitals and housing, and funding for public services is lagging behind the costs, diverting money away from vital services. In some cases recent arrivals formed up to one in eight members of the workforce.

The Tories also launched into an attack on the government yesterday over the number of people claiming benefits. David Cameron argued that, by 2006, more than 2.4 million people had been claiming benefits for more than five years, 600,000 more than in 1999. In 33 local authorities, more than 10 per cent of the working age population has spent more than five years on benefits.

England is heading for a housing crisis despite the government’s pledge to build an extra three million homes by 2020, according to a report by the National Housing and Planning Advice Unit. The independent body, set up to advise ministers, said that 270,000 more homes were needed each year to meet demand, although even at this figure unaffordability was set to continue. The average price in England was more than seven times average salaries, and this is set to increase to 9.5 times by 2026.

Housing Minister, Yvette Cooper, is expected to unveil plans to encourage local councils to help create the millions of affordable new homes needed. Under the plans, councils will be given £1,100 for every home built. This figure is expected to rise to £5,000 per home by 2010-11. Also included in the plans is a £510 million fund to help bring empty homes back into use. With more than 670,000 homes and properties standing empty, councils who aggressively target empty properties, including through compulsory purchase orders, will receive a share in the fund.

And yesterday, Iain Wright, the junior minister for housing, announced the five priority areas that will work with the government in creating the places ‘we all want to work and live’. Identified as part of the Living Places Initiative, the work aims to ensure that all communities, particularly those experiencing economic growth, benefit from cultural facilities such as museums, libraries, art and sport, and cultural heritage. The places are: the Thames Gateway, the South West region, Corby, Portsmouth Urban South Hampshire (PUSH) and East Lancashire.

Mortgage lending has slumped to its lowest level in seven years last month according to the British Bankers’ Association. The number of mortgages approved fell by 27 per cent, with approvals a key measure of property market activity and a decline indicating a slowdown. The value of approved mortgages also fell for a fourth consecutive month, from £6.1 billion in August to £5.8 billion in September.

And finally, the Northern Rock saga rumbles on as the Chancellor Alistair Darling called on its new chairman to resolve the institution’s problems. Coming after a week where Northern Rock borrowed a further £4.7 billion in emergency lending from the Bank of England, Darling also questioned the role of the Financial Services Authority (FSA) asking whether it could have done more to prevent the crisis by closer scrutiny of Northern Rock’s aggressive lending strategies. The Chancellor signalled tougher rules on financial transparency, saying there needed to be ‘better regulation to stop banks hiding things off balance sheets’.

For the first time in a decade the number of social homes built has outstripped those lost through the right to buy. The number of council tenants in England who brought their home fell by a third in 2006-07, with significant falls occurring in Yorkshire and Humber and London. The Chartered Institute of Housing said that tenants were now more reluctant to buy: ‘Right to buy obviously is not as attractive any more, partly because house prices are high and people are more worried about borrowing money’.

Morgan Stanley, one of the world’s leading investment banks, has said that the aftershocks from the Northern Rock fiasco could have dire consequences on consumer confidence and the housing market, and may push Britain to the brink of recession. The Bank of England also released their twice-yearly financial stability report today, reporting that first time buyers and buy to let landlords are most at risk of defaulting on their mortgage, and bankruptcy. With first time buyers now paying 20 per cent of their salaries in mortgage interest repayments, and rental yields currently two per cent lower than mortgage costs the bank has raised its ‘danger level’ warning on all parts of the financial system.

And there is no respite in sight, as a report by Children’s Mutual found that 95 per cent of parents think they will be supporting their children into adulthood. Many parents are already raiding their savings, neglecting their pensions, putting off holidays or major purchases, and even remortgaging their homes to provide their children with a helping hand. More than 60 per cent of those questioned were concerned their children would not be able to afford to buy a home and over half said they would help them get on the property ladder.

More than 2.4 million households, or three million UK homeowners, are no longer required to pay inheritance tax since the recent changes were announced, according to a Halifax report. The bank says there were 62 postcode districts in England and Wales where at least a quarter of home sales were for more than the £600,000 combined threshold for the tax during the last year, and most of these are in London and the South East.

The Office for National Statistics (ONS) revised its population projections yesterday. The population in Britain is set to pass 70 million within 25 years, or a net increase of 400,000 a year. The rise has been put down to an increase in family size, greater life expectancy, and higher-than-expected migration levels in recent years. The ONS however stressed that the projections were based on current trends and these figures became less reliable the further into the future they looked.

Kate Barker, member of the Bank of England’s Monetary Policy Committee and adviser to Gordon Brown on housing, has warned that the economy is still vulnerable to a downturn. With none of the triggers to correct the market as in the 1990s – high unemployment, high interest rates, an economic slowdown generally – Barker believes a source of weakness could be the buy-to-let market. The sector accounted for 12 per cent of the total mortgage market this year, so ‘decline in this demand could well dampen the market’.

A BBC Wales investigation into house possessions show that they are at their highest level for eight years and the rise is expected to continue. Already 3,000 possession orders have been granted by the courts for the first half of the year. With house prices trebling over the past decade and the series of interest rate rises taking hold, this number is expected to grow.

And finally, professor of human geography at the University of Sheffield, Danny Dorling, has redrawn the ’north-south’ dividing line. By looking at life expectancy, house prices and housing wealth, education and finally voting patterns, the line has moved north – beginning at the Severn Estuary and moving diagonally towards the Humber hitting the coast just below Grimsby. Professor Dorling said in regards to housing prices that there was in effect a ‘£100,000 cliff between north and south’.

Shelter has joined forces with the Council of Mortgage Lenders (CML) and Citizens Advice to urge the government to bring sale-and-rent-back schemes under the control of the financial watchdog – the Financial Services Authority. The FSA has previously argued that the schemes were property transactions, and as such did not fall under its remit. In a letter to the Economic Secretary, Kitty Usher, the three organisations expressed concern over the actions of some sale-and-rent-back companies, and raised fears that people were being misled into putting their homes at risk. They also argued that the office of Fair Trading should investigate claims made in the companies’ advertisements.

Britain’s economic growth during the past 15 years was built on shaky foundations, according to a report by the Policy Exchange, a centre-right think-tank. The lead author of the report said that while other European countries are embarking on a process of economic modernisation, Britain is going in the opposite direction. And rampant house price inflation has encouraged people to wipe out their savings and invest where they can in property. The report doesn’t foresee a price crash in house prices, but it does think that ‘house price inflation is unlikely to continue much longer at recent rates’.

Newport, Wales, and Plymouth have been declared the greenest cities in Britain after their ecological footprints were analysed by the WWF (formerly the World Wide Fund for Nature). However green is relative – both cities require on average 5.01 hectares of the Earth’s surface to supply their needs each year, and even if these best performing British cities’ results were replicated worldwide, it would require the resources of 2.78 planets to sustain the world at the best British rate.

And finally, carbon emissions could be cut drastically if lime is used instead of cement in house production. Cement production accounts for 5 per cent of CO2 emissions worldwide, and the figure is growing. Lime on the other hand has been used in building for tens of thousands of years, but its use has declined since Portland cement was patented in the early 1800s. Lime is able to accommodate structural movements without cracking, and when a building reaches the end of its life, the mortar is soft enough to take the masonry apart and be re-used.

The latest issue of ROOF continued to make headlines over the weekend with the Sunday Express and the Observer quoting our lead story about the YouGov poll suggesting a million people had used their credit cards to meet home loan repayments or rent in the past year. Several papers also reported the International Monetary Fund’s gloomy forecast for the housing market, which says that house prices in the UK are hugely inflated and predicts that we (along with Ireland and Spain) are heading for a slump in the not too distant future.

The Telegraph titles bucked the trend in rejecting the IMF’s report. The housing market is not all doom and gloom, the paper told its readers. Of course, the Telegraph is owned by two former property developers, but clearly this has no influence on its upbeat reporting of the property market and the expectation that price rises are set to continue.

Nor could it have had anything to do with the Sunday Telegraph rejecting the ROOF survey. The paper’s objections did not really withstand scrutiny because it misreported the figures and got its quotes wrong.

Immigration will be a big factor in pushing up Britain’s population by a third, according to economics professor Robert Rowthorn of Cambridge University. He forecasts a 21 million increase by 2074 and believes the rise, fuelled by immigration and higher birth rates, will put enormous strain on schools, hospitals and other public services.

Meanwhile, thousands of people are forced to spend years living in abject poverty on the streets of Britain’s cities after fleeing persecution in their own countries, an independent asylum inquiry has heard. The destitute have no access to help from the state as they have not been granted asylum, yet they prefer to stay in Britain rather than return home because they fear of being tortured or killed.

Questions about who is at the head of the queue for social housing are raised by official figures showing nearly one in 12 of council homes goes to a foreign national. More than 300,000 social housing properties are allocated to foreign nationals – eight per cent of all social housing in Britain.

The lead story in the latest ROOF magazine (out next week) has hit the headlines today with mentions on GMTV, Sky News and the Channel 4 website as well as the front page of the London Metro. More than one million people are using high-interest credit cards to cover their mortgage or rent payments, the reports say, along with the ROOF finding that, in some parts of the country, nearly one in ten householders was using a credit card in this way, and building up unsustainable levels of debt. Among the worst culprits were 18 to 24-year-olds, and people who found they had no means of escape from high mortgage payments.

Immigration continues to grab media attention following the publication of a report from an Oxford academic which claims Labour’s ‘open door’ policy on immigration costs every household £350 a year. David Coleman puts the total annual bill to the taxpayer at almost £8.8 billion. In a submission to a House of Lords committee, he said there had been an ‘absent-minded commitment’ to increase the population by one million every five years.

But Home Office research paints a different picture. Migrants work harder, earn more and pay more tax than Britons, it says. Migrant workers contributed £6 billion to the country’s economic growth last year and earned higher wages than their British counterparts. The study concluded that new arrivals brought sought-after skills and paid more in tax than they used in public services. The population rose by 189,000 last year, with 574,000 migrants arriving and 385,000 people leaving. But the Government figures suggested migration was throwing a life-line to an economy suffering skills shortages and struggling to support a growing bill for pensions. It was calculated that new migration accounted for about one-sixth of Britain’s economic growth, equivalent to £6 billion last year.

More gloom today about the future of Britain’s house price boom. In Birmingham, for example, prices have fallen by 1.5 per cent since July. A similar picture can be seen in other parts of the country. Buyers, sellers, analysts and estate agents are all trying to predict where the UK market is headed, as concern mounts that Britain could follow the US into a housing downturn with damaging consequences for the wider economy.

One reason could be mortgage companies tightening up their rules on lending. The number of rejected mortgage applications has risen by 60pc in the past six months, according to latest research from MoneyExpert. The financial comparison website found that more than 738,000 people have been turned down by mortgage firms since March, thanks to banks and building societies enforcing stricter lending criteria. In the previous six months, to March, figures show that around 463,000 people had their applications rejected.With house prices averaging 10pc more expensive than this time last year – and 20pc more than 2005 – the worst hit were first-time buyers between the ages of 25 and 34. According to MoneyExpert, around 382,000 young mortgage applicants were denied.

The news will be viewed as grim reading by politicians who fear the impact of a big housing downturn – all the signs are that it will remain one of the key issues influencing the outcome of the next general election, whenever that may be. The Prime Minister’s pledge to build three million new homes by 2020 was rather overshadowed in last week’s pre-Budget statement by the changes in inheritance tax. The Financial Times predicts that the next general election will be won and lost across a swathe of southern England that has been buoyed by an unprecedented, decade-long house price boom. Politicians will pitch for the votes of homeowners keen to protect their newfound wealth – but they cannot afford to ignore the first-time buyers currently priced out of the market.

The credit squeeze and the rise in mortgage rates are having an impact on the housing market, with the growth in house prices likely to slow for the rest of the year, according to the Financial Times. The latest index showed prices in England and Wales grew 0.3 per cent in September compared with 0.4 per cent in August and 0.6 per cent in March. The annual growth rate fell to 8.8 per cent from 9.4 per cent in August, taking the cost of the average home to £225,826.

New housing development will be speeded up after the Chancellor scrapped land tax last week, and bowed to pressure to drop a proposal for a planning gain supplement, industry sources said.

The Chancellor may have ignored first-time buyers, but buy-to-let investors and second home owners were jubilant about what could amount to a £4 billion boost. There are an estimated 650,000 people with buy-to-lets and second homes, according to figures from Revenue & Customs and estate agency Savills. They will save an average of more than £6,000 when they sell under changes to the capital-gains tax regime due to be introduced in April.

But the residents of Middlesbrough will be holding their heads in shame today, after reports that the city is the worst place to live in the country. Middlesbrough achieved its unwanted eminence through high crime, severe drug and health problems, and poor education results. According to researchers for the Channel 4 show Location, Location, Location, which compiles an annual list of the best and worst places to live, Middlesbrough has plenty of other problems too. The city replaces last year’s worst place, Hackney, in East London, which has improved to 12th this year. In second place this year is another northern city, Hull, followed by Newham in East London.

First time buyers are leaving the property market in droves according to a survey by the Royal Institute of Chartered Surveyors (RICS). In September, the number of new buyer inquiries fell at the fastest rate since March 2003, while house prices fell for the second successive month. Economists said that the decline was evidence of the impact of higher interest rates, high house prices and a modest increase in disposable income.

The research also shows that house prices in the UK have fallen for the second consecutive month, with 14.6 per cent more surveyors reporting a drop in house prices than a rise – the biggest difference for two years. The number of those seeking to buy has also dropped for the tenth month in a row – 51 per cent more members reported a decline in the number people looking to buy a home compared with 39 per cent in August.

With the changes announced in capital gains tax, and rent increases of 10 per cent across the country this year, landlords look set to make a killing. Buy to let investors are expected to hold onto their properties in the wake of the pre-budget report reducing capital gains tax, and the increase in the inheritance tax allowance which comes in next year. With many potential purchasers waiting to see if house prices do fall, along with the shortage of larger three- and four-bedroom houses because of Hips, many people have moved into short-term rented properties. This increase in demand has pushed up rents in many areas.

The Guardian contacted a number of organisations to ask them for their property hotspots. Halifax, the mortgage lender looked to Northern Ireland and named Newtonards, County Down and Craigavon in County Armagh, where prices has risen more than anywhere else in the UK – 64 per cent over the last year.

Nationwide Building Society also had Northern Ireland as outstripping anywhere else in the country, with Belfast topping the table, with 50 per cent price jump in the past year. In second place was Aberdeen where prices have risen over 35 per cent. Scotland recorded the third fastest annual rate of growth, after Northern Ireland and London.

Rightmove gathered asking prices from 12,000 estate agent branches to compile their selection and came up with Kingston-upon-Thames, which added 20.5 per cent to prices. Equalling this annual growth was Oxford, where the student population pushes up prices.

Hometrack, which surveys estate agents prices in England and Wales, said the fastest price increases have been in the City of London which has seen a 26.1 per cent rise. Second on their list is Burnley, Lancashire, where prices jumped 18 per cent, albeit from a much lower base than the other areas.

And finally, the Land Registry, whose house price index is based on all residential transactions including cash sales, nominated Brighton and Hove with an increase of 15.9 per cent. In second place was, Calderdale, Yorkshire where prices have risen 11.3 per cent.

The pre-budget report and comprehensive spending review were announced yesterday to mixed results.

Welcomed by the mortgage industry was the proposal to help lenders provide more long-term fixed rate mortgages. Currently about half of all homeowners are on some form of fixed rate mortgage deal but usually only in two- to three-year deals, as opposed to the US where deals of up to 25 years are popular.

The allowances for inheritance tax has been increased to £350,000 by 2010 and there are new rules to allow couples whether married, civil partners or widow/ers, to combine their inheritance tax allowances to make a total of £600,000 now rising to £700,000 by 2010. Whilst couples can do this now, it avoids having to set up elaborate trust funds.

Capital gains tax is also being overhauled and many buy to let investors, shareholders and second homeowners will see big savings from the proposal to move to a single 18 per cent rate. Currently many of these investors face a CGT rate of 24 per cent on profits when they sell. However, owners of furnished holiday lets, and many long-term property investors who lose the CGT ‘taper’ relief, may end up paying more.

First time buyers were given no help to get on the property ladder after the Chancellor opted not to increase the stamp duty threshold from £125,000. In the small print there was mention of exploring possible reforms that might allow some people who buy through the official shared equity schemes to escape paying the tax.

Some measures have also been taken to help people living in poor quality housing, and to bring empty residential properties back into use. The government has committed to spending more than £4 billion over the next three years to help those living in substandard accommodation carry out renovations. It is also extending the 5 per cent VAT rate for restoring a house which has laid empty for three years, to now be eligible on all properties that have been vacant for two or more years.

In other news, according to figures from the Council of Mortgage Lenders (CML), today’s homeowners are paying more on their monthly mortgage repayments than at any time since the property crash of 1992. The average household who took out a mortgage in August is using 18.2 per cent of its pre-tax income to pay the interest, up from 17.9 per cent in July. And first time buyers were paying 20 per cent of their pre-tax income, up from 19.7 per cent a month earlier. They also found that despite the Bank of England keeping rates on hold since July, mortgage rates have continued to climb. They are now at 5.91 per cent on average, the highest level for six and a half years.

Natural England, a government agency set up to ‘conserve and enhance the natural environment’ is considering plans to build houses in green belt land, according to the Guardian today. The best and most environmentally valuable land would be safeguarded and improved says the agency. Currently 13 per cent of land in England is made up of green belt, and the proposals aim to replace this with a ‘green infrastructure’ – a network of ‘green gaps, green wedges and buffers’ that would link urban areas to rural surrounds. The Campaign for the Protection of Rural England condemned the paper, warning it could lead to ‘American-style urbanisation’ of the countryside.

Houses for first time homebuyers now cost five times their income according to research by Hometrack. And the percentage of income mortgage payments take up, seen as a fairer measure of affordability, has virtually doubled since 1990 to 32 per cent. Figures indicate that just under a quarter of working households have any chance of accessing home ownership in their local area.

The same research also found that throughout England there has also been a dramatic increase in the number of people living in the private rented sector. In eight years the number of moves to the private rented sector increased from 25 to 47 per cent, and now makes up 12 per cent of England’s stock. The proportion of 25 to 34-year-olds who rent privately went up from 19 per cent in 1993 to 35 per cent by 2005, while those who were owner-occupier decreased from 60 to 47 per cent.

The building society, Stroud & Swindon, has calculated that if property prices continue to grow as they have over the past decade, by 2024 first time homebuyers will need £1 million to buy a home. In areas of strong growth this figure could be reached much earlier – London in 11 years, the South East in 15 years and the South West in 16 years. In the past 10 years, salaries have increased by 35 per cent, while house prices across the UK have increased by 135 per cent. As we announced yesterday, the average cost of a house in London has now broken through the £300,000 mark, whereas the average price in England and Wales is now £176,300.

However, yesterday’s house price index from Halifax show that house prices across the country, not London, have actually slowed in September, for the first time since December last year. The national average price fell by 0.6 per cent, although still growing by 10.7 per cent annually. The Bank of England resisted calls to shore up consumer confidence by reducing rates, and announced it would maintain base interest rates at 5.75 per cent.

Homelessness in rural Wales has risen at almost twice the rate of urban areas over the past three decades, according to a report out by the Joseph Rowntree Foundation (JRF). Their figures show that the number of homeless households in rural areas rose by 300 per cent from 1978 to 2005, compared to a rise of 160 per cent in urban areas. The Home Builders Federation and the Chartered Institute of Housing Cymru said fewer new homes were being built in Wales than at any time since the Second World War. The JRF has launched a commission to study property prices, affordability and availability of social housing outside major towns and cities.

HBOS, the UK’s largest mortgage lender, has scrapped its annual targets for mortgage lending. The bank had been targeting 15 to 20 per cent of net mortgages since 2004, however chief executive, Andy Hornby, recently said that, as the home loan market is going through a ‘major repricing’, they would not chase market share. HBOs’s share of new mortgage lending has dropped to 8 per cent in the first half of this year from 21 per sent a year earlier.

A couple who built their own eco-friendly home for £240,000 have sold it three years later and made over half a million pounds profit. The five-bedroom, four storey house, which won a national award for the greenest self build is built on a small piece of land near Lewes, East Sussex which cost just £60,000. It is fitted with solar panels, condensing gas boiler, sheep’s wool insulation in the wall and ceiling, and underfloor heating.

And finally, the comprehensive spending review (CSR) – the government’s spending plans for the next three years, is expected to be published on Monday, fuelling specualation that an election announcement is imminent.

David Cameron launched the ’Great Conservative Fightback’ over the weekend, by announcing the first of a series of policies aimed at taking the momentum away from Labour. Stamp duty on properties worth up to £250,000 would be abolished for first-time buyers (meaning nine out of 10 first-time buyers would save an average of £2,000). George Osborne, the shadow Chancellor, also unveiled plans to cut inheritance tax, saying the shortfall would be recouped by increasing environmental taxes and tax on non-domiciled UK residents. The Conservatives also announced that the controversial Home Information Packs (Hips) would get the chop.

The timing of these policies may be important, as the HM Revenue and Customs website on Friday announced that homebuyers paid out a record £6.4 billion in property taxes last year, a 40.1 per cent increase on 2005/06, and almost nine times more than was paid when Labour came to power in 1997. The figures also show that families were forced to pay a record £3.5 billion in inheritance tax last year, up by 9 per cent.

Some of Britain’s poorest homeowners could see their mortgage costs rise by as much as 60 per cent over the coming months as the ‘credit crunch’ affects consumers. Credit ratings agency, Standard & Poor’s warned that UK mortgage holders who are soon to come off fixed-rate mortgages should expect a payment shock, particularly if they are have a poor credit history and fall in to the sub-prime group. The Council of Mortgage Lenders (CML) has recently calculated that about two million fixed-rate mortgages (about 17 per cent of the British market) will end before 2008. The figures suggest that sub-prime borrowers could see a rise of 26 per cent, with some of the worst off and those who took out cheaper interest only mortgages seeing an increase of as much as 60 per cent.

Hedge fund managers however are out to make a killing, gambling on a fall in the housing market according to the Sunday Telegraph. Speculators are placing bets on shares in housebuilding companies falling. Two of the UK’s largest property companies – Persimmon and Grainger, have seen a percentage of their shares ‘sold short’ as hedge funds borrow shares held by existing investors, sell them and buy them back when the prices have dropped. If successful, the funds bank the difference between the price at which it sold the shares and the price it pays to buy them back. If share prices rise, the gamble fails and losses can be significant.

The buy to let market of new purpose-built properties has lost 40 per cent of its value over the past year, according to a study by the Daily Telegraph. Recent auctions of new-build flats show that they are selling for 60 per cent of what investors paid for them. Property experts are warning the situation could get worse as local authorities are granting planning permission for hundreds more flats each week and developers are offering generous incentives for potential investors.

And finally, according to a Labour MP, the government has tightened rules on households receiving grants to go green using renewable technologies. The government’s scheme, Low Carbon Buildings Programme (LCBP) ran out of funding half way through the year, as the grants proved so popular. A new system of allocating grants was launched in May, but they have been drastically reduced to a maximum of £2,500 a home (down from £15,000), and many households are simply giving up. Off the £18.7 million allocated to the household stream for three years until June 08, so far only £5.23 million has been spent. ‘Now the level of the grants is pitched too low, and applicants are dropping out once they discover what funding the will get’, said the Labour MP, Lynne Jones. Britain produces 2 per cent of its energy from renewables and is committed to a target of 20 per cent by 2020.