Lunchtime news Wednesday 9 January 2024

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.