Lunchtime news, June 16

High-earning families could be kicked out of their council homes in an effort to help needy people stuck on waiting lists. And tenants who own a second property also face eviction under plans being considered by ministers. The move comes after a report found 261,000 households benefit from cheap council housing despite having an income of more than £2,000 a month after tax. This includes 38,000 families earning more than £50,000 a year – way above the national average of £27,000. But four million people with genuine need for subsidised housing are languishing on waiting lists. The study by the New Local Government Network said householders should be made to do an annual tenancy review. Network chief Chris Leslie said: ‘Shouldn’t the taxpayer be funding social housing for those that need most help, rather than subsidising the richest tenants who could easily afford to live in private accommodation? It isn’t fair if homeless families and those in most need can’t get a council house because they are blocked by the wealthiest tenants.

House prices are set to fall further for at least the next 18 months and will not recover for at least another four years, leading economists say today. Nearly two thirds of members of the Society of Business Economists said that house prices would not rise above last year’s peak until at least 2012. Nearly 15 per cent said that prices may not rise to last year’s levels until 2015. Average prices have fallen by 7.7 per cent since September last year, according to figures from the Halifax bank. Further falls would help prospective first-time buyers, who are currently priced out of the market. ‘It doesn’t look like we’re going to see a fall and a quick bounce back,’ Bronwyn Curtis, the chairman of the society, said.

Leading housebuilders have blasted the Government for failing to help out the ailing sector amid warnings that just 100,000 new homes will be built this year against the Prime Minister’s target of 240,000. Senior figures described the Government as ‘dithering’ and warned of mass redundancies across the sector without state intervention. The criticism comes as shareholders in McCarthy & Stone appointed NM Rothschild to look at strategic options for the retirement homes company, thought to include the injection of fresh capital into the business. Housebuilders including Barratt Developments and Taylor Wimpey saw their share prices hit new lows last week amid fears that they will be forced to raise new capital via rights issues. Barratt is in talks with lending banks to renegotiate its banking covenants.