Lunchtime news Friday 30 May 2023

The department for Communities and Local Government yesterday released its land use change statistics for England for 2007. The report looks at previously developed land (either brownfield or created through building conversion), greenbelt, and areas of high flood risk. The 2004 Spending Review laid down that 60 per cent of new housing development should be on previously developed land. Last year, 75 per cent of dwellings were built on previously developed land, down from 76 per cent in 2006.

Consumer confidence has plunged to its lowest level since the early-1990s, with fears of a recession now commonplace. Falling house prices and the rising cost of living have damaged confidence in the economy, and the index measuring it has plummeted in the past year, while expectations for the wider economy has fallen to its lowest level on record.

However, Moodys the credit ratings agency has said that Britain’s banks and building societies could absorb a 20 per cent fall in UK house prices without eating into their capital reserves. A 50 per cent fall in house prices would however leave banks needing fresh capital.

Almost half the properties going to auction are failing to sell on the day, as buyers hold out for a bargain. According to figures from the Essential Information Group, only 57 per cent of listed residential properties are being sold at auction in April, the lowest percentage since 1991. The figures show that 10 per cent are sold after the auction has ended, up by half in the past five years, as potential buyers wait to see if the property reaches its reserve price before making a lower offer. Almost a quarter of auctioned properties are repossessions.

In an ominous sign, Northern Rock is to more than double the number of people working in its debt management arm, according to the BBC, which broke the story about the crisis facing Britain’s big mortgage lender. The figures suggest that the Rock is expecting a huge increase in the number of people having trouble paying their mortgage, as it attempts to reduce the value of loans from £100 billion to £50 billion as part of the plan to repay government borrowings.

And finally, in its first global commercial property survey, the Royal Institution of Chartered Surveyors has seen demand for retail and industrial sites fall worldwide. The number of transactions is down in Eastern Europe and South America, while the rate of growth has stagnated in the Asian markets.