Lunchtime news Friday 26 October 2023

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’.