Lunchtime news Tuesday 6 May 2023

The head of Southern Housing Group – one of the UK’s largest housing associations – has warned that the shortage of lenders has made it hard for housing associations to plan developments, and is threatening the government’s housing target. Tom Dacey said that at the peak of the housing boom only 180,000 homes were being built, and now with only two out of seven lenders in the market taking on new business, he feels the government target is no longer feasible. The government has pledged to build 240,000 a year by 2016 to reach an overall target of three million new homes by 2020.

One of Gordon Brown’s advisers, Stephen Nickell chairman of the National Housing and Planning Advice Unit, has warned the Prime Minister that struggling families and first-time buyers are being shut out of the mortgage market as banks ‘ration’ home loans. Saying it was almost impossible for first-time buyers to secure a mortgage, young families and professional couples were forced to rent rather than aim to own their own home.

However the number of repossessions has soared – more than 95,000 repossession orders were issued during 2007, with the last three months of the year recording a 6.3 per cent increase alone. It is believed that the figures do not fully reflect the housing downturn which became much more acute in March. Figures from the Ministry of Justice revealing repossession numbers for the first three months of 2008 are out on Friday, and are expected to show the influence of the rationing of loans.

First-time buyers have borne the brunt of a fall in house prices in London. A survey of sales prices across 15 districts in March covering all types of housing developments from one-bedroom flats to family homes, has shown that one and two-bedroom flats, typically purchased by first-time buyers, have seen the biggest falls across the capital, and the lower prices are pushing buyers into negative equity. On average prices have fallen by around 10 per cent in popular areas such as Battersea and Islington.

Estate agents are closing branches at a rate of 150 a week, with 4,000 job losses since the start of the year, while removal firms have also laid off hundreds of staff after a 26 per cent fall in the number of properties changing hands. A spokesperson for the National Association of Estate Agents said that there was no shortage of people who wanted to move house, it’s just that there aren’t enough mortgages, so they can’t.

The Bank of England’s monetary policy committee is due to meet again on Thursday. It is expected to maintain interest rates at 5 per cent, although some believe that a quarter point cut may be due by June.

And finally, fear not – the economy isn’t about to go down the gurgler – scotch whisky sales are booming. Regarded by some as the ultimate barometer of economic prospects, it is a global product sold in more than 200 countries and has historically followed the global economic trends. So it is good news then that 2007 was a bumper year both in terms of export volumes and worth, even though the US the world’s biggest scotch whisky market, has seen a slowdown in sales.