Lunchtime news Wednesday 9 July 2023

Some of the country’s biggest housing associations are attempting to revive the housebuilding sector as the credit crunch bites into their funding. Associations forced to cut back on development programmes for rented homes want a new ‘intermediate’ form of tenure introduced, with varying rents for people on a range of incomes, to replace the push for more home ownership. And while the government has only allocated £3 billion of an £8 billion purse earmarked for affordable housing, associations have asked that the remaining £5 billion be seen as a ‘war chest’ they can use for additional funding.

The government has given in to pressure and agreed to provide council housing tenants the same rights as those living in other types of social housing, in an amendment to the Housing and Regeneration Bill. The Bill which set up a new social housing watchdog – the Tenant Services Authority – had been expected to exclude council tenants. A National Housing Federation spokesperson said that they strongly believe that tenants ‘deserve the same level of protection regardless of who their landlord is’.

Children’s homes have been condemned as ‘inadequate’ by Ofsted, which now inspects the care system. The Safeguarding Children report said that care homes were failing to protect children from harm or neglect and was highly critical of the quality of accommodation local authorities make available for care leavers.

The Bank of England has held interest rates at 5 per cent this morning. This comes as news that mortgage rates have hit their highest level in more than eight years. Data from the Bank of England show that average monthly repayments have risen nearly £50 in the past month alone.

A Ministry of Defence (MoD) survey has found that nearly half of all UK military personnel is ready to leave the forces as concerns continue to be raised over the frequency of tours, levels of pay, and quality of housing and equipment. In all 40 per cent were unhappy with their service accommodation and 55 per cent were dissatisfied with the standards of maintenance of the service housing. Defence Minister Derek Twigg said that a number of measures had been recently introduced to try to overcome the perceptions, and over the next 10 years the MoD is spending £8.4 billion on accommodation for personnel.

The UK’s biggest mortgage lender, the Halifax, has released its house price index for June which found that prices had fallen 2 per cent for the month, and were down 6.1 per cent in year on year figures. The Halifax said the fall in price – the worst since 1993 – was due to a squeeze on spending power, rapid house price growth in the previous few years, and lack of availability of mortgages. The Halifax predicts that house prices across the country are set to fall by 9 per cent this year, up from ‘flat’ – its earlier forecast in February.

However, according to a report from the Royal Institution of Chartered Surveyors (RICS) first-time buyers on a low income would need to save a year’s worth of their take-home pay to pay for up-front fees. A couple in the bottom quarter of earners needed more than £27,000 to cover fees, stamp duty, and a deposit. This compares with twelve years ago (1996) where they needed just 21 per cent of their annual income. However RICS says that affordability has improved over the past few months, but the credit crunch has made it more difficult to climb on to the first rung.

Commons leader Harriett Harman came under fire after filling in during prime minister’s questions yesterday. Lib Dem MP Vince Cable urged the government to ‘get its priorities right’ and recognise the ‘deep crisis’ in the housing market. He also asked if the government would build up its sensible, ‘but pathetically small’ programme for acquiring property and give ‘genuine freedom’ to councils and housing associations to buy property. Ms Harman said that the government had ‘grave cause for concern’ regarding the market and was ‘taking action’.