Lunchtime news Thursday 4 September 2023

The Bank of England has kept interest rates on hold at 5 per cent. It has forecast that inflation will peak at 5 per cent by the end of the year, before falling sharply.

Even as the government was touting its £300 million shared equity scheme yesterday, the Welsh Assembly was questioning the future of HomeBuy’s future. The assembly announced it was suspending the scheme in Wales pending a review of its effectiveness. It said that ‘the decision had been taken because of concern that it is currently not achieving value for money, is not widely available and hasn’t been targeted at those who are most in need of government support’.

Meanwhile, the Times has learnt that homeowners whose properties are worth less than the value of their loans will not be eligible to benefit from the mortgage rescue package. Recent research by Standard & Poor’s show around 70,000 borrowers already owe more than their property is worth, with tens of thousands more at risk, including thousands of customers who took out a Together Northern Rock mortgage of 125 per cent. A spokesperson from Communities and Local Government said that the mortgage rescue package was one ‘of a range of options’ available which those suffering could use, and confirmed that those in negative equity would be ineligible.

Gordon Brown’s plan to help families struggling with rising fuel bills was under pressure in a double blow. One scheme, to make energy companies pay more for pollution permits was dismissed as unworkable. The scheme was to raise £500 million to be used to fund fuel vouchers for vulnerable families faced with big increases in gas and electricity bills. The Times understands that this plan has been scrapped after the EU insisted Britain would not be allowed to increase the number of emission permits it planned to sell.

This has put pressure on the Government to introduce a windfall tax on the energy companies. But the energy companies have warned the government they will pull put of a planned £10 billion investment in renewables and nuclear power if forced into giving up profits. The Government is looking to energy companies to help fund a new home insulation and energy efficiency drive as the best long-term way of protecting those facing fuel poverty.

And so to another house price index. Halifax has recorded an annual fall of 10.9 per cent – its first double digit drop since 1983. The monthly drop between July and August was 1.8 per cent. The figures show that the average price of a home in the UK was the same level as it in February 2006. Chief economist of the Halifax said it welcomed the announcement of the stamp duty holiday that will benefit a significant number of homebuyers. However, market conditions will remain ‘challenging’.

And finally, a couple are putting up their six-bedroom seaside house as a competition prize after two failed traditional sales have fallen through during the past two years. They are aiming to sell 40,000 tickets at £20 each, with a £1 from each ticket going to charity.