Lunchtime news Thursday 21 August 2023

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.