Lunchtime news Monday 13 October 2023

More than half the home owners who bought a house between 2005 and 2007 will fall into negative equity by the end of next year, according to research by a firm of stockbrokers. The research predicts that prices will fall by 30 per cent from their peak in February 2007 and could leave 170,000 with mortgages worth more than the value of their house. The organisation said that more than 6 per cent of the workforce is already unemployed and it believes this will increase to 8 per cent by next year.

Robert Napier, chair of English Partnerships and incoming chair of the Homes and Communities Agency, has called on the government to provide a cash injection so the public sector can take advantage of the dire economic conditions and snap up land for future development. He said it was ridiculous that they hadn’t got the funds to do so when there were projects around the country that needed to be driven forward. He also wants the government to consider expanding its financial support for housing associations to equity investment, and asked for more private investment in affordable housing through models such as joint venture vehicles.

Germany, France, Italy and 12 other European countries unveiled a ‘comprehensive’ plan for salvaging their banking systems last night. The 15 Euro-using countries are to adopt the rescue plan Gordon Brown launched for the UK market last week. The nations are now looking for a coordinated approach to survive the turbulence in the world’s financial systems.

However global initiatives have ‘not yet achieved the goal of stabilising markets and bolstering confidence’, the head of the International Monetary Fund (IMF) warned over the weekend. The IMF’s chief economist said that shares could slump by a further 20 per cent before stabilising.

Meanwhile a report by the Green Building Council says the government must urgently begin improvements to make Britain’s 25 million homes more energy efficient if it is to reduce the UK’s carbon footprint by 80 per cent by 2050. The report said that some homes are so environmentally harmful that they may have to be demolished. One of the report’s key ideas is a ‘pay as you save’ system where the homeowner or landlord borrows the cost of improvements such as windows or insulation, and pays the money back over a number of years.

Housing associations and house builders are facing huge VAT bills because they are having to rent out their property, rather than sell it, as they can’t find buyers. Revenue and Customs is sympathetic to the current position and has proposed a meeting with interested parties to see if a solution can be achieved.

A contemporary housing estate has won the Stirling Prize for architecture for the first time. Accordia, one of six developments shortlisted for the Royal Institute of British Architecture (RIBA) prize, was built on a brownfield site by a consortium of architectural firms and was described by the judges as ‘high-density housing at its very best’. The housing is made up of a combination of council homes, homes for private sale and those available under shared-equity schemes.