Lunchtime news Friday 19 September 2023

The government will miss its 2020 house building target by up to nine years unless ministers intervene further in the property market the National Housing Federation (NHF) has warned. The NHF said that only 1.6 million new homes would be built by 2020, well short of the three million promised in last July’s Green Paper. And as the credit crunch takes its toll, the private sector – which traditionally builds around 75 per cent of new homes – is being hit with some estimates suggesting that the number of new properties being built this year could be as low as 100,000, and could hover around this figure for some time. The NHF urged the government to increase the grants available for housing associations and bring forward the entire social house building budget until 2010/11 to use now.

A house builder is set to walk away from traditional house building to focus on building for the social sector, becoming the first group to leave the private market. Kier Group, the 15th largest builder in the UK which puts up around 2,000 homes a year, has seen its building activity slump by 76 per cent in the past few months. It now plans to focus on ‘partnership housing’ – acting as a contractor for public agencies looking to build social units.

Communities and Local Government has provided a snapshot of housing in England during 2006/07. The Housing in England report shows that owner occupation covers 70 per cent or 14.7 million households. Social renters make up 18 per cent and private renters 13 per cent of the households questioned. Renting is more prevalent in London that any other region where 24 per cent of households are social renters and 20 per cent private renters; and nearly half of recent first-time buyers in England had previously been renting privately.

In America the US Treasury met yesterday to discuss the creation of a US government-backed ’bad bank’ to take on hundreds of billions of dollars worth of failing mortgages held by high street banks, in an attempt the end the credit crisis. By taking on these ‘toxic assets’ the bad bank would allow its high street counterparts to free up more money on their balance sheets.

However, Standard & Poor’s has warned that banks in Europe and the US face a second wave of losses from the credit crunch during the next few months. It has revised its estimate from earlier this year that total credit crunch losses would be more than $250 billion, to $378 billion, and believes they could double to nearer $500 billion as house prices in the US continue to fall.