ROOF Blog archive

New housing minister, Caroline Flint, has pledged to hold community level talks on government plans to build three million new homes, according to Inside Housing. Ms Flint said she was keen on greater involvement of councils, housing associations and other social housing providers, and also that more options be made available for people to buy their own home.

Professor Martin Cave has warned that the the housing regulator proposed under the Housing and Regeneration Bill could act in a way that would remove housing associations independence and force them into the public sector. He believes the new regulator must be independent of government: ‘The government’s role is to set key policy, the regulator’s role is to achieve those objectives…’

HSBC has become the first bank to allow customers to extend their mortgage deals at the same rates of interest for up to another five years. The new ‘ratematcher’ policy is available to customers for a fee that is proportionate to the size of the loan.

Tax avoidance by large companies and wealthy individuals costs the government £25 billion a year, or £1,000 for every working person in Britain. The study, commissioned by the Trades Union Congress (TUC), shows that the wealthy avoid tax worth £13 billion, while the country’s largest firms avoid tax worth £12 billion a year. The TUC have called for all capital gains on assets held for less than a year to be charged as ordinary income tax.

And finally, the historic Chelsea Barracks in London is changing hands today. The 12.8-acre site near Sloane Square had been bought from the Ministry of Defence (MoD) by a consortium including the Qatari government and the Candy brothers, for a record £959 million. The MoD said the money will be used for military accommodation to ‘rectify decades of neglect’. The new owners are planning to build 650 units designed by architect Richard Rogers – half of which will be luxury apartments worth up to £20 million each and the rest will be affordable housing.

The Bank of England (BoE) mortgage approval figures for December show that the numbers fell for the seventh consecutive month. Only 73,000 mortgages were approved last month, down from 81,000 in November. House price inflation in England and Wales also fell sharply in December, according to Land Registry figures. The average price fell 0.4 per cent, bringing the annual inflation rate down from 8.1 per cent to 6.7 per cent. The BoE monetary policy committee are meeting next week to determine whether further interest rate cuts are likely.

The Financial Services Authority (FSA) has warned that more than a million mortgages are a ‘cause for concern’. Nearly a third of new mortgages approved between 2005 and 2007 contained three high risk factors – a deposit of less than 10 per cent, a 25-year repayment schedule and borrowing that amounted to more than 3.5 times annual salary. The FSA fears that a million people could face having their homes repossessed.

Meanwhile, in America, homes sales fell at record levels in 2007. The number of new homes sold fell 26.4 per cent to 774,000. Many analysts have predicted that prices will continue to fall in 2008 as builders struggle to sell a glut of new-build properties. At current levels, it would take 9.6 months to clear the inventory of unsold homes.

An FBI investigation has also been launched in the States into 14 corporations allegedly involved in accounting fraud and insider trading in the sub-prime market. The unnamed companies are said to include developers, lenders, financiers as well as banks. Yesterday the House of Representatives passed a $146 billion economic package aimed at stimulating the housing market and enabling ‘homeowners with larger mortgages to refinance, lower their monthly payment and avoid foreclosure’. Currently one per cent of all households in America are in some stage of foreclosure.

In the UK, the government has come under criticism over its deal with Rightmove, the online property agents, to give Customs and Revenue staff access to its records. Rightmove keeps data on 16 million properties, including sale prices and modifications that may add value to the property. Shadow local government minister Eric Pickles says the public will be alarmed that detailed information on 9 out of 10 house sales and rentals are being passed from estate agent to ‘tax spies’ without the public’s knowledge, and believe the government is using this information to press ahead with council tax band changes.

And finally, a new playground has opened in Manchester, for the over-60s. In a bid to keep its ageing local population fit and healthy, a residents association and local housing firm have built a playground with six specially designed pieces of equipment to provide exercise. One local resident said: ‘When we first went in all the people in there were over 70 and I have never heard so much laughing before’.

UK household income has doubled in real terms during the past 50 years, and our spending patterns have changed. In 2006, basic necessities including food, accounted for a smaller proportion of the household budget, while more was spent on housing, leisure activities, travel and cars. In 1957 three items – food, fuel and rent, made up nearly half of all household expenditure. By 2006, the cost of housing including mortgage repayments, home improvements and rent had more than doubled and now take up 22 per cent of household spend, up from 9 per cent in 1957.

Meanwhile the strength of the housing market has been blamed for British households’ lack of savings. The proportion who save money has increased by only 6 per cent in the past 50 years – from 37 to 43 per cent. More than half do not put money aside regularly, and Capital Economics believes that the housing market has exerted a strong influence on the number of savers, as mortgages repayments absorb more of family budgets and savings are dismissed as a lesser priority.

A campaigning group, Splinta, wants sellers to keep the right to put their home on the market before their home information pack (Hip) is finalised. Currently, owners can market their properties as soon as they have commissioned a Hip, but from June this year, the Hip will be needed first. Splinta fears the move will be another blow to the ‘health of the housing market’.

According to fund manager Neil Woodford of Invesco, house prices will fall by up to a tenth this year, with the average home dropping by £18,500 or £50 per day. He warns that losses will be large for owners of new-build flats aimed at the buy-to-let investor, which he says are ‘almost unsellable’.

Repossessed homes are already ‘flooding the market’ according to Europe’s largest residential property auction house, Allsop. Almost 40 per cent of homes currently on their books are being sold by banks and building societies after repossessing them. This is double the proportion for the same time last year.

European governments and the European Commission are being urged to hasten the development of houses that produce no greenhouse gases and to better enforce green building codes as a report from the European Energy Network (ENR) is released today. The ENR says that national governments should prioritise the introduction of energy performance certificates that give a house an energy rating. Britain will be introducing certificates and have set a target of building zero-carbon homes, to start from 2016.

Governor of the Bank of England, Mervyn King, has warned that the UK economy faces its toughest challenge since 1997, with a period of above target inflation and marked slowing in growth: ‘2008 is likely to see higher energy prices, higher food prices and, with a lower exchange rate, higher import prices, pushing inflation above 2 per cent’. His comments to Institute of Directors members came after the US Federal Reserve surprised everyone with its largest cut in interest rates in 25 years, bringing them down to 3.5 per cent from 4.25 per cent in a bid to stave off recession. The Bank of England’s monetary policy committee which set Britain’s rates are meeting again on 6/7 February, however most analysts, while expecting a rate cut, believe inflationary concerns will prevent the bank from making a dramatic cut.

The Conservatives have warned that Gordon Brown’s pledge of building three million new homes by 2020 is ‘doomed’ because of the slowdown in the housing market. Following the global credit crunch and turmoil in the financial markets, analysts predict that the housing market will cool and say that builders are already scaling back on plans as demand decreases. Grant Shapps, shadow housing minister said that deteriorating market conditions meant disaster for the government’s plans: ‘It is becoming clear that the government doesn’t have a cat in hell’s change of meeting its targets.’

Abbey National has become the latest banking institution to make it difficult for first time buyers to get a mortgage. It has lifted interest rates on its no-deposit tracker mortgages by 1.15 percentage points, to 7.99 per cent, almost 2.5 per cent higher than the base rate which stands at 5.5 per cent. An expert at John Charcol, the brokers, said the move showed the widening gap between standard mortgages and high risk mortgages: ‘Until now lenders were not pricing adequately for risk, but they have started to now.’

Following on from yesterday’s story regarding Scottish Widows being the latest financial institution to freeze access to withdrawals on its property investment funds, the Financial Services Authority has announced it is to start an investigation into the practice. A spokesperson for the FSA played down the move, saying it was not a ‘full-blown investigation’, however it plans to look into whether investors were given enough warning that their money could be locked into the funds for extended periods. There are now nearly one million UK investors with assets worth more than £6 billion in commercial property funds who are unable to access their cash.

Chancellor Alistair Darling has unveiled plans to convert Northern Rock’s £25 billion Bank of England loan into bonds before selling them to investors. The bonds would be guaranteed by the government until a private buyer is found, in a bid to avoid full public ownership. The scheme is supported by Goldman Sachs, and potential buyers have until 4 February to come forward. The plan still needs approval by the Financial Services Authority (FSA), but share prices in Northern Rock increased 42 per cent this morning after the announcement.

Mortgage lenders are increasing pressure on the Bank of England and Treasury to help them raise funds to provide loans to homebuyers, and warn that without support the level of lending will plummet. Industry groups such as the Council for Mortgage Lenders (CML) and the banks want the securitisation industry, which enables bankers to turn loans into bonds and other financial instruments, much like what has been offered to Northern Rock, to be given wider scope to raise finance. On current trends, the industry says that the outstanding value of mortgage will rise by £90 billion in 2008, but new deposits will reach only £60 billion, forcing lenders to slash the amount of loans they can provide, and put a ‘serious dent in the economy’.

Rightmove, the estate agents, have released their house price index for the five weeks leading up to 12 January, which shows that the average asking price for house in England and Wales was down 0.8 per cent. Annual house price inflation stood at 3.4 per cent in January, its lowest rate since December 2005, and on average prices are dropping by around £120 a day. Rightmove said there were signs that the market was improving in early January despite the fall in asking prices: ‘Some homebuyers are now able to find properties that have fallen into their affordability zone, and are bagging what they see as bargains against previous prices’.

Meanwhile, 2007 was the year of record mortgage lending, according to the Council for Mortgage Lenders. Figures show gross lending reached £362 million last year, up 5 per cent from 2006 and above the forecast for the year. Gross lending was £22.6 billion in December, down 25 per cent from November and the lowest monthly figure since May 2005.

In Scotland, communities minister, Stewart Maxwell is set to announce a £24 million funding package to help hundreds of first-time buyers. A combination of government grants and shared equity schemes is aimed at helping low income earners access the open market, after the number of first time buyers in Scotland fell to a 20-year low this year.

And finally, an historic flat pack house, built for the colonies, has been temporarily constructed in London’s South Bank. Designed by Jean Prouve in the 1950s, La Maison Tropicale is one of three prototypes made for west Africa between 1949 and 1951. It was built from folded sheet steel and aluminium so it could be folded and packed on a cargo plane. However, the prototype proved no cheaper than conventional building and the aesthetic of the building did not go down too well with expatriates. The house was discovered in Brazzaville in 2006 is a state of disrepair and riddled with bullet holes.

Junior housing minister, Iain Wright, is attempting to speed up the house buying process by introducing new ‘good practice guidelines’ that state local authorities should aim to allow search companies to access information on property searches within one working day. Local authority searches are an integral component of home information packs (Hips), which were introduced last year for all house sales. Hips providers claim that some councils were making life difficult for search companies by imposing restrictions on when they were able to visit, and how many searches they are allowed to do each day.

The deputy governor of the Bank of England, John Gieve, said that rising inflation is preventing the Bank from cutting interest rates as fast as it intended. During a speech to the London Chamber of Commerce and Industry where he acknowledged that the housing market was slowing ‘markedly’, he indicated he is in favour of a series of interest rate cuts, returning borrowing to a ‘more neutral stance’, reckoned to be around 4.75 per cent. However despite the evidence that lower rates will help soften the downturn higher energy and food prices was threatening to make this difficult.

Meanwhile in the States, Federal Reserve chairman, Ben Bernanke, has backed introducing emergency measures aimed at helping the US economy avoid recession. Mr Bernanke said measures such as tax cuts should happen quickly and on a temporary basis, and has hinted that the Bank may be willing to cut interest rates. Mr Bernanke’s comments came as Merrill Lynch posted huge losses for 2007. The latest financial institution to reveal losses related to the US mortgage market, Merrill Lynch made a net loss of nearly £4 billion, down from a net profit in 2006 of about £4 billion, and included a £7 billion write-down in failed investments in the sub-prime market.

The rich keep getting richer and fuelling greater inequality in Britain according to new research by the Institute for Fiscal Studies, an independent think-tank. The incomes of the wealthiest 1 per cent grew at an annual rate of 3.1 per cent, compared to 2.3 per cent for the population as a whole, and the income of the top 0.1 per cent grew by 4.4 per cent, during 1996/97 to 2004/05 tax years. In contrast those at the bottom of the income distribution, the bottom 15 per cent of households, saw their income go up at below average rates and in some cases falling in real terms. Overall the top 10 per cent of individuals in the UK receive 40 per cent of all personal income, while the bottom 90 per cent share 60 per cent. The very rich are disproportionately male, middle class and middle aged, living in London and the South East, and working in the financial sector, property or law.

And finally, although half of all marriages in Britain are unhappy, the fear of financial and emotional hardship keeps couples together says a survey from Seddons Solicitors, following the New Year rush to initiate divorce proceedings. For 42 per cent of those asked, the motivation for staying in a doomed marriage was to avoid financial upheaval, as the couples predicated they would have to give up their home if they split up. For women, 59 per cent of them said they would divorce their husband immediately if their future economic security was assured. Time to change the vows to in sickness and wealth, perhaps…

The Migration Impacts Forum, a group of frontline practitioners brought together to advise government on how migration affects public services and local communities, has released a report showing that migrants who have moved to the UK over the past two years, have been allocated only five per cent of available council or housing association flats. Overall, foreign nationals are much more likely to own or privately rent their own home. Many workers, especially those who have come for only a short period, often accept very poor housing conditions either because they are on low pay or because they want to send money home. A further third of migrant workers live in tied accommodation provided by their employers, which they described as in poor or very poor condition.

The government has overturned a policy of giving failed section 4 asylum seekers no choice over there they live. Previously, asylum seekers refused leave to remain were unable to turn down homes offered to them – even if they were hundreds of miles from where they lived when submitting their claims. Now applicants can remain in the region where they were ‘previously in receipt of asylum support’, with the exception of London.

Last summer’s floods have pushed the cost of home insurance premiums up on average 1.4 per cent for buildings insurance and 0.4 per cent on contents. The floods displaced around 14,500 families and resulted in £750 million worth of claims, with the average cost of each claim nearly £52,000. This has resulted in the average quote for buildings cover increasing to its highest level since the index began in 1994. Insurers have said that they will continue to cover existing customers who were hit by the flooding, but will not necessarily take on new customers in flood risk areas. Without more government funding, many of these homeowners will be unable to get cover.

Popular schools should choose students through lotteries to stop ‘pushy’ parents taking all the places, an admissions watchdog said yesterday. Greater regulation is required because ‘unfettered access to the best schools is leading to social segregation’, the chief schools adjudicator said. The government backs using lotteries and ‘fair banding’, where all pupils sit an entrance test and equal numbers of studens are chosen from each ability, while it has recently banned the use of interviews to select students. Last year, Brighton became the first city in England to use the system at over-subscribed secondary schools.

Westminster Council in London has been granted a temporary injunction blocking the creation of a new rental area which it argued would result in benefit cuts of up to £40 a week for nearly a quarter of claimants. The controversial changes to the way housing benefit for private tenants is calculated was supposed to come into effect at the beginning of 2008. But until the case is resolved, London boroughs have been told to use the previous system. The review grouped councils into ‘broad market rental areas’ to determine housing benefit rates. But some councils have said the changes could price tenants in more expensive areas out of their homes.

And staying in London, property website findaproperty.com has analysed prices of homes for sale half a mile from every underground station. Unsurprisingly ‘proximity to tube stations is very important to Londoners’. Surprisingly, it’s the circle line, with some of the least reliable trains that is the most expensive. The average price of a property along this line is £1.2 million; then £1.1 million for properties on the Victoria line; and just under £1 million for the Bakerloo line – the third most expensive tube line. The cheapest line is the currently out of action East London line where properties can be picked up for an average of £460,000.

The Royal Institution of Chartered Surveyors (RICS) released figures showing that December became the fifth consecutive month of falling house prices. The survey also showed that new instructions to sell property actually rose for the first time in six months, indicating perhaps that homeowners are keen to sell before the market worsens. Surveyors expect price falls in all UK regions during the next three months. A spokesperson from RICS said that the underlying conditions of the housing market are ‘vastly different’ to those in place in the 1990s housing recession, and ‘supply would have to loosen considerably before prices experience a significant dip’.

Fears that a US recession is on its way led to a sell off in global equity markets yesterday. European and Asian markets closed between 1 and 3.4 percentage points lower – UK’s FTSE closing down 1.3 per cent, Germany’s DAC down 1 per cent, while Japan’s market value fell to a 2-year low, down 3.4 per cent. The share price slide was triggered by a quarterly end-of-year loss of £5 billion at US bank Citigroup. The bank is the world’s biggest and said the loss had been caused by a £9 billion exposure to bad mortgage debts.

Taylor Wimpey, the UK’s largest housebuilder, is also showing market fatigue. The group, recently formed by the merger of George Wimpey and Taylor Woodrow, said market conditions in the UK were ‘subdued’ in the second half of 2007, resulting in a 19 per cent reduction in orders. The group said it did not think they British housing market would get as bad as the United States, and expected the US markets to start recovering in 2009.

Chancellor Alistair Darling insists that the Treasury will continue to play a key role in government decision-making in areas of housing, science, planning and climate change. Observers thought that when Gordon Brown left the Treasury the department would cease to play an active role in developing policy and ideas. Shadow Chancellor, George Osborne, dismisses his government counterpart’s comments, and says that taxpayers are failing to get value for money from public services because government departments are too bound up in the setting of policy.

And finally, a pensioner who paid £60,000 for his home 35 years ago is refusing to sell up even after receiving offers as high as £10 million. The property is in the fashionable Sandbanks on Poole Harbour, which is the world’s fourth most expensive place to live, but owner Jack Holsgrove says that no amount of money will persuade him to sell up. ‘Why would I ever want to sell and live somewhere else?’ he asked, before adding that his granddaughters loved coming on holiday to his house and would kill him if he sold the property.

A coalition of children’s charities has won a 20-year campaign to safeguard the welfare of 86,000 children who run away from home in England each year. The children’s secretary, Ed Balls, has agreed to provide a network of safe places where runaways can find shelter and support. Research shows that one in nine children in England spent at least one night away from home before their 16th birthday. Most child runaways are fleeing family conflict, neglect or abuse, with girls aged 14-15 the most likely to run away and stay with strangers, whilst boys were more likely to sleep rough.

The financial markets have been hit hard by the credit crisis and downturn in the housing market. Whereas the Bank of England decided to keep interest rates on hold at 5.5 per cent yesterday to control inflationary pressures, in America, the Federal Bank chairman, Ben Bernanke, hinted that he was prepared to cut rates to support growth. ‘In light of recent changes in the outlook for and the risks to growth, additional policy easing may be necessary,’ said Bernanke. Markets took his comments as a sign that the Federal Bank is contemplating a half-point reduction in rates at the end of January.

Back in England, the Northern Rock saga rumbles on. Chancellor Alistair Darling told a Treasury Select Committee of MPs that Goldman Sachs, brought in to advise the government on what to do with the bank, hasn’t reached a ‘preferred option’ yet. Darling said that he would like to find a private sector solution if possible, rather than nationalisation, although nationalisation may be a short-term option. The bank announced today that it has agreed to sell £2.2 billion, or two per cent, of its mortgage assets to the US investment bank, JP Morgan, in a move to reduce the £25 billion emergency loan given by the Bank of England.

A survey by Inside Housing has revealed that some of the most overcrowded boroughs in England are building the fewest affordable family homes. Overall the proportion of family homes built in the 33 authorities surveyed fell from 37 per cent in 2004/5 to 29 per cent last year in the private sector, and in the social sector the figures went from 30 to 24 per cent respectively. Tower Hamlets in London is ranked the most overcrowded borough in the city and last year saw just 124 affordable family houses built, compared with 923 one- or two-bedroom properties. Councils say the government’s demand for higher density developments is to blame for the drop in the supply of family homes.

And finally, the Housing Corporation has said it would help housing associations buy hard-to-sell homes from developers if the property market crisis deepens. Senior housing figures are in talks about creating a housing market package programme similar to that introduced during the 1990’s housing crash. However many of the houses are likely to be smaller properties, rather than the family houses required. Some developers are offering discounts of up to 15 per cent to housing associations already.

Bank of England policymakers have kept interest rates unchanged at 5.5 per cent. Many experts who thought the bank would cut rates today following poor Christmas sales figures are now hoping the cost of borrowing will be lowered in February.

The World Economic Forum has predicted that 2008 will have the highest levels of political and economic uncertainty for a decade in the wake of the credit crisis. A potential recession in the US and the knock-on effects of a collapse in the housing and financial markets could throw the world economy into chaos. Britain is more vulnerable than almost any other country due to its economic reliance on the housing and financial markets. Less anticipated problems expected include a potential food crisis as prices reach record highs and food reserves fall to a 25-year low, a ‘supply chain vulnerability’ where unexpected disruptions cause the transfer of goods to be held up, and further dramatic increases in oil prices.

Britain’s largest housebuilder, Persimmon, warns of further problems in the housing market as lower consumer confidence and a squeeze in the credit markets has hurt business. Sales of homes not yet built have fallen 14 per cent in the past year, while there has also been a 5 per cent decrease in completions in 2007. Shares in the company and other housebuilders, such as Taylor Wimpey and Barratt Developments are also down.

After yesterday’s news that 9 January was the day many people ran out of money following the Christmas spending spree, research out today has found that 25 per cent of cardholders are more reliant on their credit cards this year than last, and 41 per cent said they would use their plastic to meet day-to-day living costs such as groceries. An estimated 6.9 million household bills were also found to be either paid late or went unpaid during the past six months. A report from Moneyexpert.com also warned that consumers’ finances were likely to come under increasing strain due to rising energy costs and difficulties in gaining credit.

The housing revenue account, that helps government finance council housing, is set to receive a £194 million surplus in 2008/2009 according to the department of Communities and Local Government, as tenants pay more in their rent than the councils will receive to manage and maintain their homes. Over the next 15 years it is estimated that £7.5 billion could be taken from the account by Treasury, with no guarantees that any of it will be spent on improving tenants’ homes. Housing Minister, Yvette Cooper, who launched a review of the entire housing subsidy system last year is said to be concerned about the findings.

And finally, a homeowner who terrorised his next door neighbours for five years has been banned from living and sleeping in his own house, in what has been described as a legal first. After the gentleman is released from his current prison sentence for breaching an earlier restraining order, he will only be able to visit his own home at set times.

Gordon Brown and Alistair Darling have warned mortgage lenders about the need to pass cuts in interest rates on to homeowners. The PM said the lenders were failing in their duty after it emerged that thousands of borrowers are still paying higher rates the month after the Bank of England cut the base rate. Almost one in five lenders has failed to cut standard mortgage rates. Despite the warning, a spokesperson for the Council of Mortgage Lenders said that future reductions would not automatically be passed on to borrowers: ‘It’s a misconception to see a link between the base rate and mortgage rates.’ The Bank of England’s monetary policy committee are meeting tomorrow to decide if further cuts in interest rates will be required.

But buy-to-let investors have shrugged off fears of a fall in the housing market, as almost half of them plan further purchases, according to a survey by the Association of Residential Letting Agents (ARLA). Nine out of 10 buy-to-let landlords state they have no intention of selling their properties for 17 years, while four out of 10 expect to invest further in the private rented sector this year.

In America, the housing market is not looking so robust. American home sales figures for November were out yesterday, and property sales fell 2.6 per cent from the previous month and were almost 20 per cent below the November 2006 level, according to the National Association of Realtors. The largest mortgage lender in the US, Countrywide, is also struggling. Its shares closed 28 per cent down in yesterday’s trading, and the company has been forced to strongly deny rumours that it would file for bankruptcy. And the fifth largest housebuilder in the country, KB Home, has made an unexpected quarterly loss of nearly £400 million, prompting the Treasury Secretary Hank Paulson to acknowledge that there was no immediate sign of a turnaround in the housing market.

And finally, in Wales a farmer says he can create enough energy to power 500 homes in his local village – by using cow dung. Richard Tomlinson is to hold a village meeting to explain how the energy will be created by mixing cow slurry from his 600 cows and food waste in an ‘anaerobic’ generator. The process is already used by local authorities to process waste but, unlike in Europe, they do not use the energy produced for fuel. Mr Tomlinson is supported by Friends of the Earth Cymru, and hopes the Welsh Assembly will support him with a low interest loan.

The Halifax has released its house price index for December which shows that prices went up by 1.3 per cent, the first rise in the past four months. The overall annual rise was 5.2 per cent, the slowest annual rate of growth since 1996, taking the average UK home to £197,039 in 2007. The lender predicts that house prices will slow down even further during 2008.

Bulgaria has come out on top of a global house price index for 2007. Figures to the end of September 2007 show Bulgarian house prices rose 30.6 per cent, narrowly pipping China which saw a maximum 27.9 per cent growth in the city of Shanghai, with Singapore third at 27.6 per cent. The UK was placed 14th out of 42 countries surveyed.

Figures from the Telegraph newspaper indicate that half of the country’s unmarried service personnel continues to live in sub-standard military accommodation. More than 80,000 bed spaces in the armed forces worldwide stock of single living accommodation (out of 165,500) has received the lowest rating available - category four – where they fail in all three official tests relating to condition, scale and location, with a further 28,000 beds falling into the second lowest band. Only 38,100 spaces achieved a top rating. The level of family accommodation reaching grade one has improved to 59 per cent over the past six years, however almost 9,000 families still remain in grade four homes, and a further 387 families are in accommodation so poor that it doesn’t reach the lowest official grading.

And research by the charity, Leonard Cheshire Disability, has found that half of all disabled people are trapped in poverty. At least three million people are living below the poverty line, which is more than 10 years ago; more than 50 per cent were unemployed and those with jobs were likely to be in low-paid work; and living costs for the disabled are around 25 per cent higher than those without disabilities.

And finally, the most expensive property ever sold in Britain has been revealed – a £35 million, seven-bedroom newly built house in Hampstead, north London. Boasting a £750,000 staircase, a £100,000 fireplace and a front door worth £50,000, the house has been designed to last ‘for 300 years’.

Businesses are more pessimistic about the economy than any time in the past five years, and threaten to ‘talk the country into a recession’ according to accountants Grant Thornton. Only 14 per cent of the businesses are optimistic about the economy, compared to 43 per cent for the same time last year. In a separate survey, Lloyds TSB found only one in three were optimistic about the year ahead. Global economic uncertainty, fears over falling consumer spending, and lack of skilled workers are cited as the main concerns.

The uncertainty has had an affect on the potential sale of Northern Rock, according to the Sunday Telegraph. Potential buyers need to secure funding of at least £10 billion from investment banks, but as UK house prices fall, the banks are reluctant to lend money. Falling UK house prices have made it harder to estimate the overall value of the property that Northern Rock hold. PM Gordon Brown has insisted that the government is keen to avoid nationalising the bank, and Chancellor Alistair Darling said a decision would be made within six weeks.

In the meantime, the average cost of a home loan has soared to a seven-year high, according to Bank of England data, as mortgage bills are more than 20 per cent higher than two years ago. The typical homeowner is paying £135 a month more for their mortgage than last year, prompting fears of a rise in home repossessions as people struggle to pay debts.

You know times are tough when the Church of England starts dispensing debt advice. Drawing on texts from the bible and specially written prayers, the initiative aims to give hope to those suffering financially before it is ‘too late’.

But it’s not all doom and gloom. A report from Oxford Economics Consultancy has shown that the standard of living in Britain is higher than America for the first time in a century. Increasing incomes, free healthcare and longer holidays make the average Briton better off than their US counterpart. Gross domestic product (GDP) per head (an indicator of average incomes) in the UK is expected to be £23,500 in 2008, compared with £23,250 in America.

However, as many as 4.5 million people have left London and the South East during the past 10 years in search of a better quality of life. The leavers were replaced with a large number of migrants both from other parts of the UK and overseas, mostly young single people who were chasing work. Overall London and the South East had a net population gain of just under 400,000 people.

And finally, a coalition of 15 charities and campaign groups will today release findings of a survey into care for older people. Caring Choices raises concern about the level of funding for the long-term care of the elderly; calls for a simplified system of entitlements; and argues for a more choice in ‘personal care’.

The rate of annual house price growth slowed in all UK regions in the final quarter of 2007, with the biggest slowdown occuring in Northern Ireland, whilst London has the fastest rate of growth in England for the seventh consecutive year. The figures also showed that the north-south house price divide in England has increased. The typical house in the south of England was almost £90,000 higher than in the north. And it looks set to widen further as prices in the south grew by 9 per cent compared with an annual growth rate of 3.4 per cent in the north.

The number of new mortgages being approved for home buying fell in November according to figures from the Bank of England (BoE). Just 83,000 new mortgages were approved that month, compared to 89,000 in October. The Bank also warned yesterday that borrowers will face tougher than expected credit woes this year, as banks and building societies tighten lending rules. First time buyers are likely to find it harder to get on the property ladder because larger deposits will be required; many others risk falling into arrears, especially the one million plus people whose fixed rate mortgages are coming to an end this year, and consumers will have difficulty gaining access to credit cards and loans. The Bank’s monetary policy committee is due to meet again on 10 January to review interest rates.

Many consumers are angry that they are facing a likely double digit rise in their gas and electricity bills after Npower announced it would increase its prices. The country’s second largest energy supplier has 6.8 million customers who are expected to face increases of about 16 per cent for gas and 14 per cent on electricity. It is expected that the other five leading energy suppliers will follow suit as the industry blames the rising cost of oil. Consumer groups say that prices have risen by 90 per cent for gas and 66 per cent for electricity since 2003.

And finally, it doesn’t take much to make the average Briton feel at home – just a pint of milk, tracksuit bottoms and a soft roll of loo paper. And their dream home? For many it is the classic suburban house, rather than a trendy loft apartment, yacht or Hugh Hefner style playboy mansion . The survey by mobile phone company, Orange, also found that the average person spends 51.3 hours of their waking week at home – almost a third of their time.

More than one million children in Britain live in poverty despite having at least one parent in work, says a new report by the Institute for Public Policy Research (IPPR). The IPPR argues a raft of measures are required to lift the ‘forgotten million’ out of poverty, including: introducing a personal tax credit allowance (PTCA) to boost the financial incentives of getting the second adult in couples to move into work; increasing the value of the working tax credit for couple families, to be paid for by removing entitlement to the child tax credit for higher income families; and boosting the effectiveness of the minimum wage by maintaining its value in line with average earnings.

A select committee of MPs from the department for communities and local government (CLG) has criticised Ruth Kelly and Yvette Cooper over the introduction of home information packs (hips), saying the decision to delay the packs was a failure of nerve following pressure from the media. The committee said the packs were ‘watered down’ and ‘weakened’, and accuse the CLG of poor preparation and failing to deliver. The MPs also blamed a failure to win over stakeholders, like the Royal Institution of Chartered Surveyors (RICS), in their conclusion that the delay to the introduction of hips was ‘taken on a political rather than economic grounds’. The government said it had been a deliberate decision to phase the roll out in order ‘to ensure smooth implementation’.

Informal and private care is funding the financial gap of £25,000 per annum for every disabled person over 65-years-old in Britain, according to a report by the charity, Counsel and Care. Nearly two million disabled people over the age of 65 receive no state-funded care and this figure is expected to rise to 2.6 million by 2022. The evidence the charity collected suggests that there is widespread confusion about the care system caused by lack of funding, an information gap, and a strong perception of unfairness, and they are urging the government to adopt ‘a radical new framework’ for the future of social care.

Overcrowding has been blamed for a 37 per cent increase in suicides among inmates in the ‘failing’ prison system, taking the figure up to 92 suicides in 2007. Penal campaigners and the Conservatives said the rise was ‘the human cost of the prisons’ crisis’, but the Ministry of Justice claimed the overcrowding could help with preventing suicides, as lonely prisoners placed in shared cells had ‘someone to talk to’. The ministry’s analysis of the deaths showed a big rise among vulnerable prisoners such as young offenders, remand prisoners, foreign nationals and lifers, and around one-fifth of the deaths recorded did not result in either a suicide verdict or open verdict at an inquest.

And finally, an office block is to be built in Paris that promises to be one of the world’s greenest commercial buildings. The building, which is expected to house up to 5,000 people, is the first in the world to be both ’energy plus and carbon zero’ and will produce enough of its own electricity to power all the heating, lighting, and air conditioning required, while generating sufficient carbon credits to trade for money. The builder admits it will cost more (25-30 per cent) to construct, which will be passed on to tenants, but looks to the long-term: ‘you’ll have to calculate the value of this over 25 years – we all have to pay the price for living in a better world where there is less pollution’.

Welcome to 2008. And it’s already another year of statistics, forecasts, and surveys, as the pundits ask – will house prices go up or down? Most experts predict that prices will remain flat, or may only rise a little during the next 12 months.

December house price figures from Nationwide came out over the break and indicated a 0.5 per cent drop for the month across the UK, bringing down the annual rate of house price inflation to 4.8 per cent compared to 10.5 per cent a year earlier. Nationwide expect that annual house price inflation will have dwindled to nil by the end of 2008. Halifax, another big lender, also forecast that growth this year will be flat. It said the market has yet to feel the full effect of the market downturn and predicted a 15 per cent drop in sales across England and Wales.

The Council of Mortgage Lenders agrees that as a consequence of the credit crunch annual house price rises will be small. CML is anticipating a 1 per cent annual increase. Demand for new mortgages is expected to reach £90 billion during 2008, but only around £60 billion is available in savings with banks and building societies. If money isn’t released by financial institutions, a slump in house sales could result.

The British Bankers’ Association revealed that November had seen the second lowest number of mortgage approvals on record. At less than 45,000 approvals for the month, the figure was more than 43 per cent down on November 2006, and they expect much of the same for 2008. The Royal Institution of Chartered Surveyors also predict a flat year ahead, but estimates that interest rates will need to be cut to 5 per cent to offset any short-term downturns in sales and prices.

The armed forces however have received some good news over the new year. The government is to extend its Homebuy scheme, where key workers can access low- or zero-interest shared equity home loans, backed by the government and selected mortgage providers. Until now, MOD staff were only eligible for new build and intermediate rent (discounted rent) schemes. This could increase the potential purchasing power on a first home by up to one third for a couple with a joint income of £40,000.

But everyone else will be paying more for their council tax and service charges, according to the Local Government Association. Average council tax bills are expected to rise by around 4.5 per cent in April, making a total increase of more than 100 per cent since Labour took office in 1997. A spokesperson warned that services for the elderly might have to be cut and leisure and arts centres closed to keep taxes down.

And finally, a house was saved from being burned down by a giant pair of knickers. Two men accidentally started the frying pan fire that they put out with a pair of size 18-20 cotton pants doused with water. The owner of the pants said her son and nephew did what most people do and ‘panicked… but they found a pair of my knickers in a washing basket and basically used them as a fire blanket’.