ROOF Blog archive

According to the Times today, Gordon Brown could announce as soon as next Tuesday a ’mortgage rescue’ package – a series of measures aimed at encouraging councils and housing associations to offer struggling homeowners financial help in return for a financial stake in their homes. The newspaper understands that town halls will also offer first-time buyers help with deposits in return for a small equity stake, and local government will also be given extra money to buy empty, unsold, new property. But the government appears to have vetoed a proposal to allow councils to compete as mortgage lenders, and has withdrawn plans for a stamp duty holiday.

The eco-town saga rumbles on as Tesco confirms it has pulled out of one of the proposed developments. Tesco owns 80 per cent of the land that was going to be developed into Hanley Grange, a 12,000-home town near Cambridge. After opposition from local campaigners and councils, Tesco announced yesterday that it was dropping the eco part of the proposal, but may try to press ahead with a conventional development. This takes to a quarter the developers on the shortlist for 15 eco-towns who have now abandoned the project.

And local opposition has also given hope to some residents in east Manchester who feared their homes would be demolished as part of a regeneration scheme. Around 550 homes on Toxteth Street are facing compulsory purchase orders under the government’s Pathfinder scheme where their homes will be pulled down and replaced with two and three storey townhouses, and while many owners sold up, about 70 people are still holding out. They are arguing that compared with demolishing the properties, the community benefits, environmental impact and cost of ‘rehabilitiation and refurbishment’ will transform the area.

The government has released its code of guidance that local housing authorities should take into account when framing their allocation schemes to offer a choice of accommodation to housing applicants. The guidance says that choice-based letting schemes can have a positive impact on the way social housing is viewed.

Buy-to-let mortgage demand fell during the first half of 2008 by 18 per cent compared with the previous six months. Although it was the first fall in buy-to-let mortgage figures for three years, the Council of Mortgage Lenders does not think that rents will fall, as demand remains high for rental properties. However, the decline was not as steep as that in the wider mortgage market, which saw a 28 per cent drop in home loans in the first half of 2008 compared with the previous six months. The average loan has an 83 per cent loan-to-value ratio.

Buy-to-let repossessions have increased twice as fast as all other mortgages. Between the first half of 2007 and the first half of 2008 the number of buy-to-let mortgages ending in repossession rose by 100 per cent, compared with 48 per cent across the mortgage market as a whole. Shelter is calling on the government to protect renters from homelessness if their landlord is repossessed.

Meanwhile as banks tighten their lending criteria, borrowers now need a 43 per cent larger deposit than before the credit crunch. The cheapest mortgage deals are now only available to people with large deposits, around 20 per cent or more of the property’s value. A typical homebuyer in England or Wales needs to come up with an average deposit of £37,119. In London, the average deposit needed is £71,616, up 81 per cent from a year ago, and while homes in the North East need the smallest deposit, the amount is an 84 per cent increase on a year ago.

Energy firms hit back at reports that the government is thinking of imposing a windfall tax, by threatening to pass the increase on to consumers. The industry said that a windfall tax would lead to more ‘inflation-busting increases’ as companies struggle to find the money to invest in ageing power stations and networks. Gordon Brown is said to be against the idea of a windfall tax, preferring to force energy companies to pay more for pollution permits issued under the EU’s carbon-trading scheme.

But councils are calling on the government to charge energy companies with an annual levy to fund a national home insulation programme to help lift 500,000 people out of fuel poverty instead. The Local Government Association believes this would be more effective than a one-off payment for the hardest hit. It could also cut £200 off energy bills and help reduce carbon emissions by 20 per cent.

Britain will overtake Germany and France to become the most populus country in Europe in 50 years time. The positive birth rate and younger average age in the UK contrasts strongly with most other large European countries. It will result in less problems for pensions, health and welfare systems in the UK said the Eurostat report.

Social housing is not a disincentive to work and there is no evidence of cultures of worklessness in deprived areas, according to new research by the Department for Work and Pensions. The research, which sought to explain why there are high levels of worklessness amongst social housing tenants, did find that the tax and benefit system acts as a disincentive and that many people are unable to get a grip on the interaction between earnings, tax credits and housing benefit.

A petition calling for a windfall tax, signed by 70 Labour MPs, is splitting the government. Those in favour of a windfall tax on energy companies are arguing that Britain’s worsening economy will cause ‘difficult social issues’ and say that at least one ministerial aid is ready to quit unless a levy is imposed.

But another tax – intended to regenerate empty commercial buildings – is threatening to leave parts of the country looking like ‘bomb sites’ as owners demolish buildings to avoid paying the tax according to the chair of a regeneration group. Until the last election, vacant offices and shops received a rate relief of 50 per cent, while industrial units gained full relief. Now all unused commercial property has to pay full business rates after a three- or six-month grace period.

The chancellor’s ‘dithering’ over stamp duty has ‘paralysed’ the housing market, and led to a 20 per cent fall in prospective buyers, estate agents claim. The National Association of Estate Agents said that the fall in new buyers, estimated by the Royal Institution of Chartered Surveyors, was in line with reports from its members that more than a quarter had seen sales fall as a result of the uncertainty over stamp duty.

The NAEA has also called on the government to take action on home information packs, saying they are not fit for purpose and will not simplify the house buying process. Chief executive of NAEA believes the slower housing market is making the situation worse, and the majority of property searches are out of date by the time the property is sold.

The latest mortgage figures, from the British Bankers’ Association, are out today and indicate that the number of mortgages approved for house purchases stabilised in July, but was still two-thirds lower than a year earlier. There were 65 per cent fewer loans than July 2007, but the figure was mostly unchanged from June 2008’s record low, and statistician with the BBA said that they it would be premature to think that they housing market is starting to recover as overall activity was ‘very low’. There has also been an 11.0 per cent drop in the average loan value.

Overdue mortgages are on the rise says Standard & Poor’s, the credit ratings agency. A report into nonconforming mortgages has shown the delinquency rate for sub-prime mortgages rose to a record 23.31 per cent high by June 2008, while the rate at which borrowers are pre-paying mortgages fell during the first quarter from 24.75 per cent to 23.98 per cent. For prime mortgages, the delinquency rate also rose. Northern Rock accounted for one in every 13 repossessions in the UK during this period.

Labour party members are calling for an independent review of the legal aid system, following fears from lawyers that the changes will rob vulnerable tenants of housing advice. The Labour group of the Local Government Association wants the changes put to a vote at the Labour party conference next month after they said that the new fixed fees for civil legal aid cases do not cover complex and time-consuming cases. Housing is one of the areas where vulnerable people are particularly at risk if they can’t get good advice.

For the first time the UK has more people of pensionable age than under 16 year olds. Men over 65 and women over 60 account for 19 per cent of the population or 11.58 million, just overtaking the 11.5 million children under the age of 16. And the over-80s are the fastest growing age group, accounting for more than 5 per cent of the population, a figure which has doubled in less than 30 years. The implications of an ageing population had the greatest consequences on housing and in the community.

According to Moneyfacts, the price comparison website, mortgage rates are back to the level they were at in August 2007, at the start of the credit crunch. However, the better rates are only available to those with big deposits, while mortgage costs remain high and there are 10,000 less financial products available in the past year.

However, some borrowers are having to apply four times to get credit, a recent survey has shown. Nearly half a million mortgage or loan customers had to apply more than four times, while just over 400,000 people could not get a mortgage or loan at all.

And councils are also seeing their finances stretched lately – some councils have seen demand for discretionary payments double. The payments are made to make up the difference between rent and housing benefit, and new rule changes on determining benefits’ values introduced in April have left many tenants with a shortfall. At the same time councils are clubbing together to fight a campaign by umbrella groups who want to stop the government pooling tenants’ rents for redistribution. The councils are worried that losing the rent subsidy which helps them repair homes and keep rents down will threaten their tenants’ quality of life. The Chartered Institute of Housing, the Local Government Association and London Councils have all said the redistribution is unfair and should be abolished.

Shelter yesterday called on the government inject £8 billion into building new homes immediately, to kick-start the housebuilding industry. With the government’s figures showing an 18 per cent fall in the number of new social homes and a nine per cent drop in the number of new houses being built overall, Shelter says the £8 billion that has been earmarked for homes over the next three years would have more of an effect if spent now, with Adam Sampson saying: ‘the government simply cannot stand by and watch the industry collapse…’

A house has been discovered in a cliffside in Angus, Scotland. Lifeboat crews were called to reports of cries for help coming from a cliff, when they spotted a rope ladder leading to the cave house built about halfway up the 120 foot cliffs. The Maritime and Coastguard Agency said it would not say where the cave was due to public safety.

Council leaders are asking to be allowed to offer mortgages in an attempt to get the housing market moving. In a letter to the Times they argue that the public sector should be able to help first-time buyers and those unable to secure a home loan, and they are calling for an extra £2 billion from the public works loan board, an agency that allocates funding for capital public sector projects, to provide cheaper mortgages than the private sector.

Meanwhile the latest figures for gross mortgage lending from the Council of Mortgage Lenders show that while lending is up 5 per cent in July, the total is 27 per cent lower than a year ago. So far during 2008 only 29 per cent of mortgage lending has been to housebuyers, the rest has been to people staying in their homes but remortgaging.

And according to government figures the number of new homes being built in England during the past 12 months has dropped 19 per cent. Only 33,400 new properties were started during the three months to the end of June, a 2 per cent increase on the previous quarter. But there was a massive 27 per cent drop in the number of private sector properties built in the past year, compared to a 56 per cent rise in new homes built by registered social landlords, the highest quarterly level for 11 years.

Buyers are demanding discounts of up to 20 per cent according to the Bank of England’s summary for July. The new home market is also facing difficulties as a growing number of buyers are sacrificing deposits rather than go through with a sale.

Thousands of pensioners will lose out on backdated benefits as reforms to housing benefit and council tax benefits come into effect. From 6 October pensioners will only be able to claim backdated benefits for the previous three months rather than the 12 months currently allowed. The changes are part of a plan to allow pensioners to apply for all three benefits in a single phone call. The reforms are estimated to save the government £100 million.

Just days after the Scottish government unveiled a £100 million rescue package for social landlords to buy up unsold homes and land, first minister Alex Salmond has come under fire from one of Scotland’s largest estate agents, for repeatedly claiming that house prices in Scotland are still rising. The package is part of a £1.5 billion affordable housing investment programme and has the support of the Scottish Federation of Housing Associations and Homes for Scotland and is aimed at keeping struggling homeowners in their homes. However, estate agent Slater Hogg & Howison says that the government is using out-of-date figures and that Scotland is following the same trend as England with falling house prices.

Inequality is damaging children’s health, education and general well-being, and the growing divide between rich and poor is undermining work to bring down the number of children living in poverty, the TUC says. Its report found the class divide between the top and bottom tenth of the population has more than doubled since 1979.

In an article for the Guardian, shadow chancellor George Osborne has delivered a blunt assessment of the government’s policy on child poverty. Mr Osborne says the government has failed in redistributing wealth, with life expectancy gap between rich and poor at its widest since the Victorian era. The time has come to end the target driven top down approach, he said, adding that the free market provides the fairest way of rewarding people.

Empty homes are increasing in England for the first time in nine years, according to the Empty Homes Agency. An increase of almost 10,000 brought the overall figure of empty homes to 672,924, with the biggest increases in cities such as Liverpool, Leeds and Oldham. A spokesperson for EHA said it expects the number to continue to rise.

Homeowners may soon be able to claim a cash refund if their local council fails to deliver services such as emptying rubbish bins or if street repairs are not carried out in time. Communities secretary Hazel Blears is to set out the details of the ‘right to redress’ next week as part of the autumn government fightback planned by Downing Street. However council leaders complain that the new scheme will land them with ‘pointless bureaucracy’ that will cost them more than the level of compensation.

The UK mortgage market is likely to shrink by almost 20 per cent this year, followed by a further drop of three per cent next year, research from data analysts Datamonitor indicates. Fewer lenders operating, a shrinking number of products, higher prices and more people being refused credit mean the outlook is very different from the 19.3 per cent growth in 2006. But there are signs that competition is slowly returning to the market as lenders have started cutting their interest rates during the past weeks.

Meanwhile the latest figures from the National Association of Estate Agents reveal that the number of househunters dropped sharply in July to an average of 192 per agent, down from 226 in June. The percentage of first-time buyers in the market has also dropped – more than 1 per cent to stand at 10.7 per cent of buyers. President of the NAEA blames the chancellor’s indecision regarding a stamp duty holiday, however he argues that the market is levelling out as reflected in the stable figures for the number of sales agreed.

However, if you have purchased a student buy-to-let then you are unlikely to be too troubled. The latest research found that rental yields for student accommodation in the best performing towns is more than 10 per cent, with Nottingham the best student town to buy in, followed by Durham. The average rental yield is 7.9 per cent for the top ten university towns, which far outstrips the UK average of 6.4 per cent.

Record numbers of homeowners are letting out properties after failing to sell them, according to the Royal Institution of Chartered Surveyors. New instructions to let houses and flats increased at the fastest ever pace – and the flood of properties is expected to depress rental levels in the coming year. However, demand is rising, with the biggest increase coming from families looking for houses.

Renting in London is five times more expensive than the country’s cheapest locations, with Westminster the most expensive borough in the country, research from the Deposit Protection Service found. The research measured the average deposit demanded by landlords and found the 10 most expensive boroughs are all in the South, while all but the one of the cheapest areas to rent is in the North. The Tenancy Protection Service recently said that 62 per cent of landlords are failing to use the deposit schemes properly.

Further research from financial services experts Skandia forecasts that £18 billion will be pulled out of the buy-to-let market during the next few years as investors sell around two-thirds of their properties in the face of falling housing prices, higher mortgages rates and sluggish rents. Skandia thinks that the stock of buy-to-let mortgages will collapse in value from its height at the end of 2007 of £120 billion to £44 billion.

There has also been a drop in the number of shared ownership sales during the past three months according to the Housing Corporation, with flats proving particularly difficult to move. London associations were facing the fewest problems – with demand for shared ownership homes ‘holding up well’. The corporation also reported that some lenders were making associations renegotiate the price of existing loans as a condition for getting new borrowing facilities.

The Liberal Deomocrat party is to debate the future of the development of eco-towns at its autumn annual conference. A South Cambridgeshire councillor is calling for homes to be built on brownfield land where possible and linked to existing settlements. The councillor has also called for reforms to ensure central government does not interfere in local planning decisions, but uses a process adopted by other European countries to encourage greater local involvement.

Housing minister Caroline Flint has come under fire after it emerged that one of the communities likely to be selected as one of the first eco-towns is a former mining town in her own constituency. Ms Flint maintains that the development is not getting preferential treatment and has appointed a junior minister to help with the proposals and to avoid accusations of a conflict of interest.

The waiting list for council and social housing could stretch to 5 million during the next two years as more people are forced out of their homes due to repossession, the Local Government Association warned. Friday’s figures of an increase of 24 per cent in possession orders is likely to have a ‘knock on’ effect on council and housing association waiting lists and the LGA has called on the government to give town halls freedom to borrow on the open market and to remortgage their assets to invest in house building.

Planners have been urged to assess the design quality of all housing schemes against the building for life standards, which have just been adopted by the government. The move aims to help councils meet housing quality criteria across 20 elements of good design. All affordable housing schemes overseen by English Partnerships and the Housing Corporation now require a qualifying BLS score before allowing them to go ahead. It is estimated that currently 80 per cent of homes fail when compared against the standards.

Rightmove, the UK’s largest online housing website, saw its shares fall 8 per cent this morning after it said that house prices were still dropping. The average asking price has fallen 2.3 per cent from a month earlier and 4.8 per cent from a year earlier, while in London prices are down 5.3 per cent for the month and 3.8 per cent on the year. But even with the price reductions, Rightmove said that fewer houses are selling, and transactions are at the lowest level since 1959.

Housebuilders have started lobbying the government to set up a tax-free savings scheme for first-time buyers that will improve liquidity in the mortgage market. New Homes Marketing Board has urged the chancellor to introduce a national deposit savings scheme offering tax breaks worth up to £5,000 to help buyers afford the costs of a deposit. Savers would have up to five years to save a maximum of £20,000, which would have a 25 per cent tax-free bonus added that could be used for a house deposit, stamp duty and legal fees.

Meanwhile in a bid to lure new borrowers Halifax and Abbey National, the two biggest lenders in Britain have started a price war. However only those with equity of at least 25 per cent are being targeted – first-time buyers need not apply.

Residential building land has dropped in value by 20 per cent in the first six months of the year, and could fall by up to 50 per cent before the slump is over. Research by Savills shows the value of brownfield sites is down 19.8 per cent and greenfield sites down 22.5 per cent – four times the decrease of the housing market. Development land is a key asset of most housebuilders’ portfolios, and many analysts expect companies to follow the lead of Taylor Wimpey, which last week wrote down the value of its land bank to reflect the falling market.

But it all could be irrelevant for some homeowners as, according the new head of the Environment Agency, stretches of the British coastline are doomed and plans will need to be drawn up soon to evacuate people from the most threatened areas. In his first interview since taking over the agency, the environment chief said that Britain faced hard choices over which areas of the coast to defend and which to allow the sea to reclaim: ‘It would simply be an impossible task both in financial terms and engineering terms to save every bit of coast’.

Repossession orders are up 24 per cent from the same time as last year in England and Wales, and 4 per cent on the previous quarter, according to latest figures from the Ministry of Justice. Meanwhile mortgage possession claims jumped 17 per cent in the first quarter of 2008, compared with a year ago.

The new local government network (NLGN) is lobbying support from local councils in a bid to persuade the government to allow councils to offer mortgages. It hopes that this will help stave off repossessions and evictions, prop up the housing market and support first-time buyers to buy locally. Under the scheme the NLGN is calling on the government to allocate £2 billion to local councils who could support certain groups, such as first time buyers or those in mortgage difficulties.

The Law Commission has warned that too many properties in the private rented sector are in poor condition or badly managed. The third of a series of reports by the Law Commission, looking at the effectiveness of housing law, stated that the poor reputation of the sector prevented it from paying a full part in national and local housing markets, while few landlords belonged to a representative body which could then be overseen by a central regulator. The report also called for a single code of housing management practice for landlords.

Hundreds of thousands of people are to lose the right to complain about noise, pollution or disruption caused by major infrastructure projects under the new planning Bill. Lacors, which oversees the councils’ environmental protection work, has written to the local government minister expressing concern that clause 151 means that once development has been given the go-ahead, councils are unable to act on complaints from local people regarding nuisance caused by noise, odour, light or any other type of pollution.

Developers are coming up with a range of incentives designed to lure people into buying a home. A new car, cash, free gas and electricity for years, paying stamp duty, guaranteeing rental income and even offering to buy your existing home are some of the incentives housebuilders are using alongside price cuts of up to 40 per cent. Analysts are warning that some incentives can affect the valuation a mortgage lender gives for your home.

And finally, more homeless people are bedding down at Heathrow airport each night, than in most London boroughs, Broadway estimates. During a 10-night period it found on an average night up to 30 homeless people are sleeping rough at the airport compared with an average of 24 people in the boroughs.

The number of people claiming housing benefit in the UK increased by 16,000 (0.4 per cent) between August 2006 and August 2007. The number of claimants in housing association tenancies increased while the number in local authority tenancies fell slightly. The government suggested this was due to the transfer of housing stock from local authorities to housing associations.

According to the Residential Landlords’ Association the government is looking at proposals to stop houses being used for private rented student accommodation. The government wants students to live in commercially provided, purpose built halls of residence. But the RLA argues that 75 per cent of students prefer the independence of sharing a privately rented property, and moving students into halls of residence would deprive entire local economies that provide for them. It is planning a nationwide landlords’ coalition to fight the government plans.

Bank of England governor Mervyn King said yesterday that there was little the governement could do to prevent a housing crash if that was what the market demanded. King dismissed measures being considered by Alistair Darling to end the mortgage drought such as extending the special liquidity scheme and having Treasury guarantee high quality mortgage-backed bonds to provide extra emergency financing for the banks and revive the mortgage market. He said that central banks should not supply funding to finance investment nor should the government have a major role in guaranteeing lending.

The financial advice website moneyfacts.co.uk has said that mortgages will never be as easily or widely available as they were a year ago. The number of available financial products is down 70 per cent, while rates and fees are up and maximum loan to value ratio has dropped to 80 per cent, down from 90 per cent a year ago.

However research by HSBC has found that a third of homebuyers are putting off purchasing because they believe that rates will be cheaper in six months. The research found that 98 per cent of those questioned were able to secure a mortgage, but were concerned with the rising cost of living currently and wanted the market to stabilise before taking the plunge.

According to reports in the Times the Financial Services Authority has been accused by mortgage lenders of being ‘unfair’ in its recent criticism of their repossession policies. The Council of Mortgage Lenders said the FSA was wrong to suggest the entire industry was at fault, and is unhappy about the way the FSA published its findings on 5 August of how lenders deal with customers who are behind on their mortgage repayments. CML said the findings were confusing to lenders and misleading to the public.

The Communities and Local Government house price figures are available, and they show that the fall in the price of flats has become a key factor in the housing market slowdown. A drop of 3.6 per cent across the UK between May and June contributed to an average fall in property prices of more than £1,000 for that two-month period. Overall, however, prices grew by 0.6 per cent in the year to June.

Meanwhile in Scotland, house prices are rising, although sales have fallen in July. Year on year figures from Lloyds TSB show house prices have increased 9.3 per cent, and increased 1.6 per cent during July, however the number of house purchases has dropped by 27 per cent from a year earlier. All areas of Scotland reported a rise in their annual figures, ranging from 2.3 per cent to 20.6 per cent.

The Residential Landlords’ Association has won an appeal for a landlord’s agent not to pay a penalty over the late delivery of tenancy deposit papers. The landlord registered a deposit with the tenancy deposit scheme, but did not give the tenant the information within the statutory 14 days, only providing it after possession proceedings had started. The RLA said that the penalty of three times the deposit was not payable because the information had been provided before the tenant submitted his application.

A Tory thinktank has produced a report stating that the government should accept the ‘uncomfortable truth’ that many key northern cities such as Liverpool and Sunderland had failed to be regenerated, and central regeneration budgets should be used to help people move south or cut council tax. The report also suggested that the three million new homes planned by the government should be built in just three southern cities – London, Oxford and Cambridge, saying ‘cities based on highly skilled workers are the most dynamic’.

Almost a third of white people believe they are the victims of racism in public services, according to a citizenship survey for Communities and Local Government. A quarter of people questioned also felt that council housing departments or housing associations would discriminate against them, which was an increase of 10 per cent from 7 years ago, and compared with only 11 per cent of people from minority ethnic groups who felt the same way.

And finally, in Sweden a woman is selling her flat, complete with live-in stepfather. The woman who inherited the flat when her mother died has failed to convince her stepfather to move out despite a court order insisting he does. She is going ahead with the sale of the furnished flat after having a joint ownership clause ruled invalid. Whoever buys the apartment will be responsible for removing the gentleman.

The number of people moving house has fallen to its lowest level since the Royal Institution of Chartered Surveyors’ survey began in 1978. RICS said the squeeze on mortgage availability continued to dampen the market, while the ‘confused messages’ over a stamp duty holiday had also hit confidence. There were just 14.4 completed sales per surveyor on average for the three months to the end of July.

And the number of new loans approved for house purchases in June fell to half the figure for June 2007. Just 47,000 home loans were approved in June, compared with 98,000 last year. The figures from Council for Mortgage Lenders indicate the slowdown in mortgage lending was likely to continue.

Housebuilder Barratt has announced that it will scrap stamp duty on certain properties irrespective of what the chancellor decides to do to try to get the market moving again. Managing director of Barratt West London said that ‘we don’t want our homebuyers to worry about whether they should buy now or wait to see…’ It may also pay legal fees and moving costs in some cases.

A new report out by the Chartered Institute of Housing and Housing Corporation has found that the proportion of people living in social housing who are unemployed is increasing, driven by the shortage of housing as only those with the most acute needs are qualifying for homes. The average housing income of those entering social housing is between £100 and £300 a week. The report also found that 85 per cent of private rented households with incomes of less than £25,000 had not applied to social housing, either because they aspired to home ownership or because of the stereotype of social estates.

Regeneration areas have been the hardest hit by the property market slump than other types of development, according to the IPD regeneration index. In the past, regeneration schemes have given higher returns than schemes outside regeneration areas, but in 2007 the return for a regenerated property fell by 6 per cent compared with an average of 3.4 per cent for the property market as a whole. A spokesperson said that long-term returns are expected and regenerated areas remain a good investment.

And finally, a 93-year-old woman who has just had her first novel published has bought a house with the proceeds so she and her friends can stay out of nursing homes. The author has one friend staying with her already and says she hopes to buy other properties so more people could live with her ‘in dignity’, and avoid moving into a nursing home, which she says she dreads.

The stamp duty saga rolls on – this weekend the National Association of Estate Agents published the results of a poll showing that 24 per cent of its members were convinced that sales had fallen through because of speculation that the rate would be cut. Housing minister Caroline Flint countered that it was among a range of options being considered to boost the market and a decision would be announced in the pre-budget report in the autumn.

Meanwhile as the Council of Mortgage Lenders released its repossession figures for the first half of the year on Friday, which showed an almost 50 per cent increase. In response, the Legal Services Commission announced that emergency legal aid schemes will be set up at a further 20 county courts to provide free legal advice and representation to homeowners threatened with eviction, increasing the number of such schemes to 174.

The problems facing the property market, including the growing number of repossessions, will result in five million people being on the waiting lists for social housing by 2010 according to the Local Government Association. Currently there are 1.6 million families, or 4 million people, waiting for social housing, and during the past few years, waiting lists have been increasing at a rate of 90,000 families a year. The LGA believes this figure will increase sharply during the next two years.

At the same time, more than a million people are living in private accommodation that falls below the government’s decent home standard. Figures uncovered by the Liberal Democrats show that the government is likely to miss its target for reducing the amount of social housing that fails to meet the standard. According to the Lib Dems, by 2007 the amount of social housing that failed to meet the standard had only fallen by 47 per cent since 2001. The government has set a target to reduce the amount of social housing that does not reach the decent homes standard by 65 per cent by the end of 2008.

Further proof of the credit crunch comes as reports that building societies have slashed their mortgage lending so far that repayments are now outstripping new loans by almost £700 million in June, according to data from the Building Societies Association. A spokesperson for the BSA said that the Financial Services Authority had been placing pressure on the societies to increase their reserves above 20 per cent of liabilities.

And moneysupermarket.com has revealed that the number of buy-to-let mortgages has fallen 93 per cent in the past year. Twelve months ago there were 4,384 mortgages available to landlords, compared with just 307 deals today. The cost of a mortgage has also increased more than half a percent in the year. Meanwhile lenders are applying much stricter lending criteria on their buy-to-let deals, requiring rental income to be 19 per cent higher than the mortgage repayments – up 13 per cent a year ago.

Care for elderly, infirm and disabled people could be taken from local authority control under new government plans to end the ‘postcode lottery’ that allows wildly differing standards of care across the country. More than 370 nursing and care homes have been given a ‘no star’ rating after the Commission for Social Care Inspectors assessed their services as poor, while a further 31 have been sent legal notices saying that the CSCI plan to cancel their registration and move residents elsewhere.

In Scotland, the SNP is looking to place further restrictions on council tenants’ rights to their home by withdrawing the entitlement for new tenants. Having recently supported moves to remove the right to buy new build council houses, deputy first minister Nicole Sturgeon believes that banning new tenants in the social rented sector from buying their own home will encourage local authorities and housing associations to invest in new properties.

And finally, a cross-party committee of MPs has urged the government to adopt a bill of rights for the UK. The committee said the bill should go further than current human rights legislation and include the rights to housing, education and a healthy environment. Both Labour and the Conservatives agree on the need for a new Bill of Rights, but differ on what areas it should cover.

The International Monetary Fund dashed hopes yesterday of a quick fix for the British economy, saying the country faces two years of economic pain. The IMF believes UK growth will be 1.4 per cent, down from the 1.7 per cent that was predicted in spring. Next year it estimates growth will be weaker still at 1.1 per cent, compared to Alistair Darling’s projected 2.25 per cent. The IMF said Britain’s woes were worsened by the slump in the housing market, and it estimated house prices will fall by 15 per cent in the next two years.

Despite these predictions, the IMF cautioned that soaring inflation leaves the Bank of England little scope to cut interest rates from 5 per cent. Most evidence is pointing to the annual consumer price inflation rate increasing to more than 4 per cent when July’s figures are released next week, which has had a major impact on the BoE’s monetary policy committee decision today, as interest rates are kept on hold at 5 per cent.

A growing number of critics are coming out against the government’s line on stamp duty. Estate agents and surveyors have told the chancellor that house sales could collapse during the summer because of uncertainty about a temporary freeze in the duty. The Tories have written to Mr Darling accusing him of playing ‘damaging short-term games’ with homebuyers. But in the 1990s, when there was a stamp duty holiday, the positive effects were short-lived.

Halifax house price index figures released today show a fall of 1.7 per cent in July, bringing house prices down by 8.8 per cent in the past year. The monthly drop was smaller than the previous two months, but was slightly higher than estimates. A spokesperson for Halifax said that the housing market was underpinned by a solid employment market and low interest rates, but was being constrained by the decline in credit availability.

Meanwhile the Scottish housing market is heading for its worst ever period of recession, and this will stop the government from meeting its housebuilding targets, according to Homes for Scotland, the industry body. Around 15,000 jobs have been lost across the industry in the past three months, and it estimates that 50 per cent fewer homes are being built than last year. Homes for Scotland told the government that the dramatic reduction will make the target of building 30,000 new housing association homes for rent impossible to meet.

For homeowners, location was still the ‘key’ to their purchase. Almost two-thirds of new buyers quizzed (by property developer Investland) said that the location of their home was more important than interior design, transport links and parking. Of next importance was the size of the house.

And finally, first-time buyers are getting older. Research from mform.co.uk, a consumer website, has found that just 34.5 per cent of all first-time buyers in 2008 are under 30 compared with nearly 50 per cent during 2007. The average amount borrowed has also increased from £117,000 last year to £127,000 this year. First-time buyers now need an average income of £41,600 compared with £34,000 last year, despite recent house price falls.

The Financial Services Authority warned mortgage firms that they should treat customers fairly as the number of repossessions rises and more homeowners fall into arrears. During the first three months of the 2008, repossessions rose 40 per cent from a year earlier, while the number of home loans in arrears increased 15 per cent. The FSA wants a flexible approach to those struggling from lenders, not a ‘one-size fits all’ policy.

Shelter responded by saying that the FSA had to clamp down on ’merciless mortgage lenders who are robbing people of their homes’. Adam Sampson, chief executive, said that Shelter was particularly concerned by evidence that some lenders are taking a tough line, putting homeowners at risk of repossession, when other solutions could have been found.

Meanwhile lender Halifax and housebuilder Persimmon have joined up to offer first-time buyers the chance to double their deposit. Persimmon will stump up an amount equal to the sum a Halifax account-holder has saved as a deposit, up to a maximum of £5,000, provided it is for a Persimmon property. But Halifax is not guaranteeing that the offer of a mortgage will be open to all depositors.

As the news that a stamp duty holiday may be on the cards to improve the house market, other options available for Alistair Darling are coming out. The Treasury is looking at ways of allowing local authorities to provide loans to potential buyers who have been refused a loan by commercial lenders. Another idea is to let council tenants use their right to buy discount as a deposit on a new home, and Mr Darling may be encouraged to reintroduce income support payments to cover the mortgage interest when homeowners lose their jobs or at risk of repossession. He said last month that he is planning a tax-free savings scheme to help first-time buyers raise a deposit.

The Tenant Services Authority is likely to scrap the traffic light assessment system for measuring the performance of housing associations. Its chief executive designate said ‘it was not the role of the TSA to be checking the development programme on behalf of the Homes and Communities Agency’. Housing associations are currently judged on how well they perform in four areas – development, governance, viability and management, and those performing well are given a green light, with problems flagged up as amber or red.

As the first-year anniversary of the credit crunch arrived, construction activity in Britain continued to fall. The Chartered Institute of Purchasing and Supply construction managers’ index fell for the fifth month in a row and during July fell at its fastest rate since 1997, while the housing activity sub-index also fell for an eighth consecutive month to its lowest level.

The fall in housebuilding threatens to raise house prices by 30 per cent between 2009 and 2012, according to the Centre for Economic Business Research. In its quarterly report, the CEBR estimate that house completions will fall by a fifth this year, and by 10 per cent in 2009. At the same time it expects house price to fall by 8 per cent this year and 4 next year, but will recover sharply amid the drop in construction and subsequent shortage of supply.

Gordon Brown is considering suspending stamp duty temporarily in an emergency measure to kickstart the housing market. The idea is being worked on by Treasury while Brown is in China for the Olympics, but leaked details are thought to suggest that all buyers, irrespective of the value of the duty, would be exempt.

The National Landlords’ Association is calling on interested parties to submit views on its draft Code of Practice for landlords involved in the sale and rent back market. The NLA said it is launching the consultation so interested parties can submit their opinions on how the code could be improved, and to show the seriousness it takes raising standards across the private rented sector.

Meanwhile Shelter has warned that as many as 9,000 more homeowners than official figures suggest are facing having their homes repossessed. The figures, first revealed in ROOF earlier this year, show that the number could be a fifth higher because of actions taken by second charge lenders. The Financial Services Authority is releasing its figures today on repossessions by regulated lenders, which does not include second charge data.

The Housing Corporation has found that more than half of housing association tenants can be defined as ‘vulnerable’, either because they had been homeless, or were sick or disabled, or had been forced to move from unsuitable accommodation. The study found that many tenants suffered from multiple issues, with an average of 1.4 vulnerabilities for every vulnerable person going into general housing.

Finally a couple have been forced to live in a shed on an allotment after they had their home repossessed, rather than accept the ‘run-down’ houses offered to them by their council. The couple, who have six children staying with relatives, had been shown 10 private rented homes, which they rejected as unsuitable. The council found them temporary accommodation, which is now no longer available and the couple moved back to the allotment. The council says there is nothing it can do.

The number of homeless women has risen by nearly 80 per cent in five years, according to a report by the Conservative Party. The report has found that long-term use of bed and breakfast hostels for women and children more than trebled in the past five years; there has been a rise of 77 per cent of women on council waiting lists; while single mothers comprise the majority of adults in temporary accommodation – up by more than 50 per cent in the same period.

Meanwhile a report out from the Family and Parenting Institute highlights the emotional turmoil living in cramped housing conditions can cause. As many as 74 per cent of parents living in overcrowded homes share their bedroom with their children and the increased stress levels, poor health and feelings of hopelessness are leading to family arguments, sleep deprivation and children doing poorly at school. The institute is concerned the rise in repossessions will make the situation worse.

Northern Rock is to reveal that approximately one in five of its mortgage customers will face negative equity next year. About 5 per cent are thought to be in negative equity already, with a further 15 per cent with less than 10 per cent equity in their homes also at risk. In total, about 140,000 homes could be threatened, many of them in the North East, a traditional Labour heartland.

The Law Society has told the BBC that some estate agents are breaking the law by marketing properties without ordering a home information pack. Estate agents say that sellers are reluctant to pay up to £300 for the pack when the housing market is slowing, and they often delay drawing them up until a sale has been agreed. A representative of estate agents confirmed the practice was taking place, but said that the packs were ‘useless’ to both buyers and sellers and were only used as a legal formality once a sale was agreed.

One of the most pessimistic outlooks among analysts has come from property price futures predicting house prices will fall by almost 30 per cent during the next three years. About £50,000 will be wiped off the value of the average house price by 2011, the assessement says.

A new report aimed at educating housing associations about pitches for Gypsies and Travellers has been released by the Housing Corporation. The report outlines how registered social landlords can ‘make a business case for providing and managing pitches for Gypsies and Travellers’ and provides examples of how associations have gone about it.

In Scotland, housing associations will get financial help from the government to buy private homes on the open market as a way of tackling homelessness and boosting the building industry. First minister Alex Salmond has agreed to create a fund to enable housing associations to buy unsold homes at a discounted price, as long as the acquisitions meet the needs of public housing policy, are affordable and offer good value for public funds.

And finally, Plymouth is named the UK’s most ‘cost-effective’ place for students to live. On average students in Plymouth will spend £3,000 less than students in the most expensive city, Exeter. Overall, students contribute more than £10 billion in housing and living costs during the academic year, with nearly £4 billion spent on rent.

Developers have forced a council to drop its affordable housing targets after an appeal judge described the area’s properties are ‘cheap as chips’. Blythe Council wanted to keep its policy of 30 per cent affordable housing in a new residential development. But Persimmon Homes, Barratt Homes and Millhouse Developments challenged the council. The court of appeal ruled in favour of the developers on the grounds that the area already had some of the lowest cost housing in the country.

Caroline Flint has opened the door for direct investment in council homes, indicating that ‘good councils’ would qualify for social housing grants to build new homes. A spokesperson for Ms Flint said she expected councils to start applying for the grants by 2009, when they could use their assets and borrow in a similar way to arms length management organisations.

The Audit Commission is launching a consultation on rolling out short notice inspections to all housing associations, after a successful pilot programme with 12 associations. The inspections will take less time to complete than the conventional inspections and will focus on the quality of services provided to tenants and leaseholders.

The Nationwide figures released yesterday showing an 8.1 per cent annual decline in house prices in July, and a 1.7 per cent drop for the month. The survey found that house prices have fallen for the ninth month in a row and are now at their lowest level since August 2006. The average price of a home in the UK fell by 9 per cent (or around £17,000) since their peak in October 2007. Economists at Nationwide do not believe the market will recover quickly.

The housing market slump will wipe £50,000 from the value of the average British home and threaten to push 1.7 million people, or one in six, into negative equity. Standard & Poor’s (S&P) the credit ratings agency, predicts that house prices will fall by a rate of 17 per cent by next April. S&P have estimated that the average borrower has a loan worth 54 per cent of their property’s value, but around 70,000 households, or 0.6 per cent of all borrowers, are already in negative equity. For every further percentage point decline in house prices, between 60,000 and 180,000 homeowners could fall into negative equity.

The government has unveiled a £5 million fund to help flood-risk households. A consultation on how best the money can be spent was published yesterday by the department for Environment, Food and Rural Affairs (Defra) and looked at the possibility of providing a free home flood survey, and offering a grant to cover some of the costs of preventative measures such as air brick covers, waterproof walls and floors and raised electrics. Research suggests that where measures are in place to prevent flooding, they cut the financial costs of the flooding by 50 to 80 per cent.

Meanwhile, the Chartered Institute of Housing (CIH) has called on the government to make a long-term improvement to the energy efficiency of the country’s existing housing stock to tackle growing fuel bills. A spokesperson for CIH said that making homes more energy efficient will both reduce the country’s carbon emissions by 60 per cent and also protect the most vulnerable households who are already struggling with their bills.

The eco-town challenge panel, the independent group set up by Caroline Flint to encourage bidders for the eco-towns to raise the standard of their proposals, has said that ‘significant progress’ has been made in the proposals. However it still wants to see further improvements in transport and employment strategies. The panel is not responsible for deciding which bids are taken forward.