Lunchtime news Friday 8 February 2024

The Council of Mortgage Lenders (CML), which forecast that repossessions in 2007 would reach at least 30,000, has reported the figure was 10 per cent lower than expected. However, the figure still represents an eight-year high. The CML believes that the ‘payment shock’ is likely to have less impact than expected as a result of yesterday’s fall in interest rates. But Shelter warned of difficulties ahead and again called on the government and mortgage lenders to set up a free, confidential advice service for those facing arrears and repossessions.

But no such problems in Scotland, where the housing market is ‘thriving’. The Royal Institution of Chartered Surveyors (RICS) said on Thursday that the Scottish property market was growing with surveyors reporting a widening gap in performance between Scotland and other parts of the UK, including London.

Following yesterday’s cut in interest rates by the Bank of England (BoE), and repeated warnings from the Financial Services Authority, mortgage lenders moved quickly to pass on the rate cut to borrowers. However, analysts said that it will have little impact as 55 per cent of borrowers are on a fixed rate mortgage and they do not believe that the big lenders will cut their tracker mortgages by the same margin. Nor do they think that there is likely to be much respite in the near future as the Bank warned that inflationary pressures may push the government’s inflation target above 2 per cent. ‘The Bank is likely to continue to cut interest rates gradually as it carries out a difficult balancing act of trying to support growth while containing underlying inflation pressure. We forecast rates to fall to 4.5 per cent by the end of 2008,’ said the chief economist at Global Insight.

In its annual review of local authority performance for the year, the Audit Commission has revealed that poor housing management is holding English councils back from improving their scores. As more local authorities were reaching their highest ever rankings, four councils – Herefordshire, Liverpool, Rutland and Slough – were given the lowest possible score on housing, up from three councils a year earlier. Just under three-quarters of councils achieved scores of three or four in housing (out of five), but 3 per cent performed below minimum requirements, greater than in any other service area.

And finally, be thankful that British screenwriters haven’t gone out on strike like their US counterparts or the housing crisis could be worse. The writers’ strike has caused a housing market crisis in Hollywood, as house sales have fallen 48 per cent since the strike began, and stars are being forced to slash prices 11 per cent on average.