Lunchtime news Tuesday 13 May 2023

According to the Council for Mortgage Lenders, mortgage lending fell during the first quarter of 2008 to its lowest level for more than three decades. From January to March, new mortgages slumped to 142,000, below the 146,000 recorded in early 1992 when Britain was in recession. Remortgaging has remained ‘resilient’, actually increasing in the first quarter to its highest amount for three years, but CML has put this down to the large number of borrowers coming off short-term fixed rate deals.

The latest survey from the Royal Institution of Chartered Surveyors shows that the number of surveyors reporting a fall in property prices has risen for the ninth month in a row. Meanwhile the number of house sale completions during the past three months has fallen significantly, with an average of 18 sales per surveyor. A RICS spokesperson said that there are ‘very real implications, not just for the property industry but also for the high street and the wider economy’.

Housebuilder Redrow and Northern Rock have both added to the financial gloom. Redrow has reported rising cancellation rates as its order book is down 26.5 per cent from a year earlier. The housebuilder said sales and prices have come under pressure as a result of the tough market conditions and the restrictions on mortgage financing. While recently nationalised Northern Rock has seen the number of homeowners in arrears nearly double. The number of mortgages in arrears for at least three months stood at 0.95 per cent of the total lending, up from 0.57 per cent at the end of December.

A shortage of skilled construction workers is jeopardising ministerial targets to build three million new homes, revamp schools and deliver the Olympics facilities. After surveying 1,200 companies, the Chartered Institute of Building indicates that nine in ten employers report a skills shortage, with four in ten saying that skilled manual trades were ‘very difficult’ to fill. The majority of companies said that the situation was likely to worsen this year.

And finally, Gordon Brown has proposed an ‘age insurance’ scheme to safeguard the elderly as he launched a consultation into care. The scheme is intended to address the ‘black hole’ in public finances caused by increased life expectancyand is likely to involve compulsory payments throughout an individual’s working life, which would be spent on care during old age or infirmity. Health Secretary Alan Johnson said that pensioners should not have to sell their houses to pay for nursing home care.