Lunchtime news Wednesday 4 June 2023

A report from Hometrack says that that falling house prices will help young homebuyers purchase a home for the first time, but the current mortgage shortage will be an obstacle for many. The report found that 28 per cent of young people in work are unable to buy even the cheapest local property, with the situation even worse in London and the South West. The cost of paying back a home loan rose to 34.5 per cent of average incomes for first-time buyers last year, so a 10 per cent fall in prices would allow a fifth of those currently priced out of the market to buy a two- or three-bedroom property.

Struggling? Then move to Scotland – the Scottish mortgage market is in the best shape in the UK according to the Council for Mortgage Lenders - as property prices and loans tend to be cheaper there than the rest of the country. While property prices have increased every year in Scotland since 1974 and for the past four years seen percentages rise that have outstripped the rest of the UK, generally Scots have borrowed less (three times the average salary) and prices remain 25 per cent lower than the rest of the UK.

An increasing number of homeowners are taking a mortgage holiday as pressure on household finances intensifies. Most of the major lenders have reported a rise in borrowers taking or planning to take a mortgage break, skipping payments for up to a year. A spokesperson for Council for Mortgage Lenders said that any lender ‘would make an assumption that an enquiry about a payment holiday is a likely indicator of financial trouble’.

The government is under fire (again) after it was accused of standing to make ‘profits’ of more than £700 million from two million council house tenants in England over the coming three years, with no guarantee that the surplus will be put back into housing. Council rents are collected by councils and the Treasury ‘siphons’ off up to a quarter for ‘redistribution’ or returned under a complex system that everyone agrees is past its use-by date. Councils met recently to pressure the government to reform the system which sees 162 councils in the UK making a loss after redistribution and only 52 gaining any extra money.

Meanwhile thousands of vulnerable people are going without food or heating to pay for the cost of homecare services provided by local authorities. Charges for assistance with dressing, washing and eating have more than trebled since 1997 as councils try to limit the growth in the social services budget. In some areas services were free, but in others the cost could be up to £17.30 an hour, with only the poorest households exempt. Critics have said that government funding has not kept pace with the demands of an ageing population and the social care system is ‘creaking at the seams’.

And finally squatters have been given advice in a council recommended handbook, on how to break into empty properties and set up home with paying rent. The booklet, distributed by the Advisory Service for Squatters, gives tips on removing locks to enter, what to do if caught and provides general legal advice.