Lunchtime news Friday 28 March 2024

Nationwide has reassessed its forecast that there will be no change in house prices by the end of the year after UK house price inflation fell to its lowest level in 12 years, down 0.6 per cent, and cutting the annual rate of increase to 1.1 per cent. Nationwide now predicts a fall in prices saying: ‘a moderate fall in prices… should not be unwelcome and should help to ensure greater stability in the market going forward’. Despite the slowdown, prices are still 11 per cent higher than they were two years ago, and 47 per cent higher than five years ago.

Nationwide, along with Halifax, two of the countries biggest mortgage lenders, yesterday increased their rates sharply in an attempt to shut the door on all but the most creditworthy investors. Nationwide said it did not want to take on many more customers as it would add too much risk to its books.

Further figures, from the British Bankers’ Association (BBA), confirm the downturn in the market as mortgage lending is down a third on the same time a year ago. People who do not move but change their mortgages to more favourable deals now account for nearly half of all new mortgages granted by banks. The BBA argue that the UK housing market is going through a ‘two-way squeeze’ as banks are finding it harder to raise funds in the financial market. And with less money available to lend, banks are having to make it more expensive for borrowers, while rapidly rising house prices have driven many would be owners from the market.

And according to research from iammoving.com, one in five of all those looking to move house in the near future are considering getting off the property ladder altogether while prices are high, and renting until prices have fallen. A further 14 per cent planning to move are thinking of renting to free up some of the money they have tied into their homes, to ease cashflow problems.

A ban on sex offenders from being housed in bail hostels near schools has undermined public protection and led to a shortage of places for offenders and resulted in some dangerous offenders being inadequately monitored in the community, according to a report by the inspectorate of constabulary, probation and prisons. The inspectors said that plans to create new hostels to meet the needs of the system have proved impossible because of local opposition. The ban, affecting 14 of the 100 hostels in England and Wales, was introduced in 2006 by then Home Secretary John Reid.

And finally, two of England’s oldest council homes, built during the reign of Henry 8th, have been sold finally. The local council decided to sell the homes to raise funds for affordable houses when they realised that renovation work would cost around £40,000 for each property. The derelict properties sold for £169,000 each, and the council plan to use the money to build 100 new affordable homes by 2010.