Lunchtime news Wednesday 30 January 2024

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’.