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Reforms to housing benefits would push claimants into ghettos as tenants are forced to move to areas where housing is cheap but jobs scarce, Shelter warned. The local housing allowance (LHA), which replaces housing benefit, is not enough to cover private sector rent for many tenants and those who lose out will need to meet the shortfall themselves or move to cheaper areas.

Around 140,000 families are receiving more in benefits – £20,000 each year – than the average take home salary, according shadow work and pensions secretary, Chris Grayling. Employment minister Tony McNulty responded that the 140,000 families represented just 1 per cent of households with at least one person of working age receiving benefits, and that the majority of cases ‘include disability-related benefits and premiums’. Mr Grayling said the number was still ‘an awful lot’.

The Post Office and local councils should fill the gap in mortgage lending left by the banking sector, a former Labour minister has suggested. Chris Leslie, now director of the New Local Government Network, said that there had been a ‘collapse of trust’ in private lenders and the government should relax its rules on councils lending and encourage the Post Office to expand its range of loans to cover the mortgage market. He argued that councils would be better place to pass on lower interest rates to customers whose fixed rate mortgages had ended and who were facing ‘punitive rate’ from banks.

House prices dropped during November according to Land Registry figures, with the average value of a home in England and Wales down by 1.9 per cent, or £3,135, to £161,883. It was the fifteenth consecutive monthly decrease. Prices are now 12.2 per cent down in year on year figures – standing at the same level as in February 2006 – and they are ‘on track’ to finish the calendar year down 15 per cent.

Rough sleepers in Oxford are being asked to prove a link to the city, or leave. The city council says that Oxford had become a popular destination for rough sleepers and it has had to adopt the ‘reconnections’ policy to cut the number of homeless in the streets. Almost 1,000 people have so far been asked to prove their links to the area, and around a fifth have been sent home. Figures show on a typical night there are more than 170 people living in hostels in the city and about another dozen sleeping rough.

The number of new homes being built in Britain next year will fall below 80,000, government housing officials say, while this year only 120,000 new homes were built, the lowest figure since 1924 and 140,000 below the official government target. The lack of development finance will mean the government will become the most important agent in the UK housing market, through the new Homes and Community Agency (HCA). The HCA has £17 billion to spend over the next three years and sources say it will invest directly in major housing schemes by taking an equity share; help push a project forward by paying for the infrastructure; or work in partnership with developers in an attempt to mitigate the downturn.

The Treasury’s top official has been knighted in the new year’s honours list for his role in dealing with the credit crunch. The decision to give Nick Macpherson, who was appointed in 2005 as permanent secretary at the Treasury and who has overseen the peak of the lending boom and subsequent £500 billion bail-out, a knighthood has been savaged by critics who say it is too early to claim the bail-out successful. Vince Cable Liberal Democrat Treasury spokesman called it a rather ‘premature judgment on government policy, which is far from assured of being a success’.

Propertyfinder.com, Britain’s longest established property website, has bucked the trend and placed a prediction on the level that house prices will fall in 2009. It said that the market, which was already skewed towards buyers, would be dominated by ‘bargain hunters’ including professional buy-to-let buyers. House prices would fall by a further 12 per cent next year, but Propertyfinder insisted that the worst was over in terms of the level of house sales. It also predicts that the rental market would remain buoyant, and although falling initially at the start of the year, will begin to go up again by the end of 2009.

Several of Britain’s biggest lenders are however, tightening their criteria on buy-to-let mortgages, depriving many investors of the chance to take advantage of falling prices and low interest rates. Just 27 out of 97 lenders are offering buy-to-let mortgages according to a survey by one analyst, with the best rates for landlords about 1.5 per cent higher than residential mortgages. Most lenders have also increased the level of deposit required to out a buy-to-let mortgage.

Britain is producing a generation of adults who are twice as likely as other Europeans to return to the family homes in their twenties. In the UK each year 4 per cent of those aged between 16 and 29 who have moved out of the family home return to live with their parents, double the percentage in countries such as France, Ireland, Greece and Portugal. Researchers have pointed to the high cost of housing, the early age at which British children leave home for the first time, and that many ‘rush to live as a couple’ in order to move out sooner and then break up, as reasons for the higher percentage of British young people returning home.

Construction workers union Ucatt has urged the government to invest more money in housing after new figures show that almost 63,000 families in England are homeless. The union said it was a ‘damning indictment’ of 30 years of failed government policies on housing along with a belief held for ‘far too long’ that people were only considered successful if they owned a house. A spokesperson for Ucatt called for the government to create a housing market with a greater mix of tenures, to allow local authorities to build more properties and for builders who are being laid off because of the economic downturn to be given work building homes for rent.

According to figures from the Conservative party 44 per cent of mortgage holders are worried about being able to meet their mortgage payments in 2009, while 47 per cent of local authority and housing association tenants and 41 per cent of private renters are worried about being able to meet their rent payments. In figures that cover the period between 2003/04 and 2007/08, housing costs have increased by 45 per cent, while gross income increased by only 13 per cent, resulting in people right across the socio-economic spectrum believing themselves to be at equal risk of having their homes repossessed.

House prices in London fell further than in any other part of Britain in 2008, figures from Hometrack reveal. London prices fell by 10.1 per cent on average, compared with an 8.7 per cent overall slump. Hometrack estimate that a further 12 per cent fall will come next year, as forced job losses will lead to more sales in 2009. During December, it took on average twice as long - 12 weeks - to sell a property than it did at the peak of the housing boom in April 2007; while the proportion of the asking price achieved has also fallen to 88.6 per cent, down from 95.7 per cent at the April 2007 peak.

For the second successive quarter, UK homeowners are no longer cashing in on the equity in their homes. Bank of England figures show that householders put £5.7 billion of equity back into their homes rather than using the money for other major purchases or larger mortgages. This is an increase from the £2 billion they put back in the second quarter, and is in stark contrast to the £5.6 billion of housing equity withdrawal in the first three months of the year, and the £11.1 billion withdrawn from July to September 2007. Analysts believe that for most people equity withdrawal was no longer an option due to the rapid decline in house prices.

More than 30,000 estate agents have lost their jobs since the start of the credit crisis, nearly half the number who were in work 18 months ago. Approximately 4,000 estate agency offices, nearly one in four, have closed, resulting in 32,000 agents losing their jobs. The hardship continues throughout the industry as valuers, negotiators and mortgage advisers are also losing their jobs due to the fall in house prices and drop in the number of house sales taking place.

One in four properties in parts of the country has been on the market for the whole of 2008, and on average 5 per cent across the UK have been on the market for the year. Towns in the north of England have been particularly hard hit by a stagnating market with properties in the north accounting for eight of the top 10 towns which have the highest proportion of unsold properties in the country. Properties in cities have generally been less effected than those in towns. Property sales are running at around half the level seen in 2007.

The Conservative party has called for more action across government departments to tackle homelessness, due to its ‘multi-faceted’ nature. Grant Shapps, shadow housing minister, set out the Conservatives’ strategy, calling for benefit reform, coordinated health and support services between government departments, and more housing help for vulnerable veterans including making it easier for them to train for new careers and access housing and healthcare, and for ex-offenders to stop the ‘revolving door’ of prison, homelessness and reoffending.

The government has been accused of creating a poverty trap with changes to the tax credit and benefit system for up to two million low earners. Those earning just above the minimum wage and receiving housing benefit are likely to face the highest penalty, as small increases in earnings could result in a loss of benefits and push up their tax rate to 90 per cent.

Crisis has warned of a surge in homelessness in the new year, as people struggle to keep up rent or mortgage payments. Of those questioned in a survey, 32.4 per cent said they would lose their home within three months of losing their main income. The YouGov poll found that 28 per cent of people in the lower income groups said they were worried they could lose their home, compared with 21 per cent of people in higher income groups.

Mortgage lending has fallen sharply, with approvals for house purchases 60 per cent lower than a year ago. The number of approvals fell by 14 per cent in November to a new low of 17,773, according to figures from the British Bankers’ Association. The number of people re-mortgaging but staying in their existing home also dropped significantly in November – by nearly half to the lowest level for eight years – as homeowners had problems finding deals. And the average amount borrowed was down 24 per cent on a year ago. With house prices falling and people waiting to see whether mortgages would get significantly cheaper, activity in the mortgage market remained stagnant.

House prices will continue to fall by another 10 to 15 per cent and will not recover to their 2007 peak for at least a decade, Legal & General Investment Management warned yesterday. The crash in house prices will be 30 per cent down from their August 2007 peak. The recovery will be delayed as a result of the banks’ more cautious approach, lending less of a property’s value or lower multiples of a borrower’s income.

The National Housing Federation (NHF) said yesterday that the financial health of the social housing sector remains robust and it will weather the current economic downturn. Responding to reports about the sector’s financial problems, the NHF chief executive said that housing associations are well placed to meet the challenges of the economic downturn.

The Office of Fair Trading has criticised three ex-directors of Fasttrack for misleading council tenants in a right to buy scheme. The directors persuaded tenants to make right to buy applications and, as part of the deal, the buyers were required to sign up to a credit agreement with finance provider FAI. The OFT found that Fasttrack misled the buyers about the costs of signing up.

The New Local Government Network has called for public places to be named after celebrities, claiming that it gives a unique identity to an area. It suggests that councils should organised public votes to rename public spaces after successful local citizens, which would ‘help celebrate our identity and remember British history’, by rejecting dull and uninspiring names such as Sycamore Close or Fairview Street. Local government minister John Healey has backed the idea, saying it would be ‘great for local democracy and local pride’.

The deputy governor of the Bank of England admitted it did not understand the severity of the economic problems before the financial crisis. Sir John Gieve told the BBC that the bank knew ‘crazy borrowing’ was taking place and house prices were rising unsustainably, but the bank thought the problem was less serious than it turned out to be. He also doubted that the Treasury would get all the money back it had pumped into the banking sector.

The government could house tens of thousands of families if it took steps to bring Britain’s 750,000 empty homes back into use, a report by the Royal Institute of Chartered Surveyors (RICS) says. RICS is calling on the government to make it more attractive for owners to improve the quality of empty properties by reducing VAT on the renovation and repair of buildings from 15 to 5 per cent. Currently the government has introduced the discount for properties that have been empty for more than two years, while offering financial incentives to housing associations to encourage them to buy up empty new-build properties.

The Royal Bank of Scotland has sent threatening letters to homeowners saying that their homes will get repossessed if they fail to repay their mortgage within 30 days. Natwest, owned by RBS, has refused to give an explanation for its decisions. In one case the homeowner says he has never missed a payment nor are in arrears, although he had been served default notices over credit card debt in the past and had taken out a £100,000 second mortgage. A spokesperson from the bank said that there were ‘exceptional circumstances’ in the case, but declined to say what they were.

The government is proposing wide-ranging new powers to allow bailiffs to break into people’s homes and use ‘reasonable force’ against householders who try to protect their valuables. The government wants to crack down on people who evade debts, and under the new regulations, bailiffs working for private firms would be able to restrain or pin down householders and force their way into homes to seize property to pay off debts.

The Liberal Democrats today published figures showing a 9 per cent increase in the number of children living in temporary housing this Christmas. Almost 88,000 children are living in temporary accommodation this year, an increase of 9 per cent since 2004/05, with London bearing the brunt after a massive 38 per cent increase in numbers.

House sales are set to fall to a record low next year, with less than 700,000 homes expected to change hands – equal to households in the UK moving just once every 31 years, double the 15-year average during the past decade. Figures from Hometrack show that prices are set to continue to fall next year by about 10 per cent on average with further falls of 3 per cent in 2010. The volume of transactions is also expected to fall 12 per cent, on top of a 45 per cent drop in sales volume throughout 2008. As spokesperson from Hometrack said: ‘The housing market saw a total reversal of fortunes in 2008 as homeowners faced a crisis of confidence after a decade of buoyant market conditions’.

There is some good news – two of the UK’s biggest mortgage lenders, the Halifax and Nationwide have decided not to make any house price forecasts next year. The Halifax said it was ‘not appropriate’ due to its impending takeover by Lloyds TSB, while the Nationwide said it was simply too difficult at the moment as ‘things are changing so rapidly in the market, which makes it very difficult to forecast’. Some industry analysts have said that predications of further large falls may become a self-fulfilling prophecy. The two financial institutions had published the most widely followed and long-standing house price surveys each month.

In a case highlighting the ‘perverse nature’ of the housing benefit which allows claimants to live in subsidised properties that most taxpayers could not afford, a family of five has been place by their council in a £2 million property, costing more than £91,000 a year in rent. Figures released under Freedom of Information show that there are five local authorities in the country paying rent totalling more than £50,000 a year. Most of the top paying councils are located in London, but include other areas such as Exeter and Slough. The councils with the highest proportion of people on housing benefit are also located in London – Hackney comes top with 38.9 per cent of the population receiving housing benefit, followed by Tower Hamlets with 38.1 per cent. Outside London, Manchester rates highest with 33.7 per cent claiming benefit.

One of the government-approved tenancy deposit protection schemes has warned landlords they must provide sufficient evidence if they want to withhold some or all of a deposit. According to the study there have been a growing number of landlords who find tenants have damaged their property at the end of a tenancy who are having to pay for the damage themselves as they haven’t enough evidence to justify keeping the deposit. During the third quarter of 2008, 125 disputes were dealt with by independent adjudication, and tenants received all or part of their deposits back 91 per cent of the time.

There were more affordable homes created this year than in any year since 1996/7, the government said yesterday. Some 53,730 affordable homes were provided in England in 2007/8, an increase of 21 per cent from the previous year. More than 29,000 were made available for social rent, while just over 24,000 were provided through other intermediate housing schemes including shared ownership and shared equity schemes, the figures up 19 and 23 per cent respectively from the previous year. Eight out of nine regions experience an increase in new affordable housing supply, with only the North East showing a small decrease.

The government’s spending watchdog the Audit Commission warned that the recession and rising unemployment will cause a wave of social problems in the coming year. The commission found the recession is already causing more homelessness in one-third of local authorities, while two-thirds predict the problem to worsen next year. The report said that the slowdown in house building, due to a cut in local authorities’ funding, had reduced the amount of new social housing and therefore the number of social properties available to let. Two-thirds of councils have reported an increase in applications for housing and other benefits.

According to the Institute for Fiscal Studies (IFS) the Labour government has reversed the rise in numbers of families claiming benefits during its 11 years in power. Under the Conservatives the proportion of families reliant on the state for the majority of their disposable income rose from 25 per cent in 1979 to 31 per cent in 1996/7. This figure has now fallen back to 28 per cent in 2008/9, reflecting the greater number of people in work as well as the growth of private pensions the IFS said.

The government has announced more than 40 new and refurbished Gypsy and Traveller sites across England. Iain Wright, communities minister, announced six new sites and 37 extended or refurbished ones to help create homes for up to 25,000 Gypsies and Travellers. The sites are part of a £21 million scheme aimed at tackling the housing crisis within the community, and to help reduce the annual bill faced by local councils that are forced to evict Travellers from illegal sites. People living on the sites will pay rent and council tax and in return councils will provide rubbish collection, running water, electricity and other services.

Rents have fallen even faster than house prices in central London since the collapse of Lehman Brothers, an estate agent survey has found. Rents are down, on average, 10.6 per cent since September, compared with 8.9 per cent for sales. In ‘cold-spots’ such as Kensington and Chelsea they are down by as much as 15 to 20 per cent, as thousands of sellers, unable to find buyers, are becoming ‘forced landlords’. Last month, the estate agent, Douglas & Gordon, saw a 22 per cent increase in the number of homes offered to let.

As public sector finances deteriorated sharply in November with the level of borrowing soaring to an all time high, Gordon Brown and Archbishop of Canterbury yesterday clashed over the use of borrowing to resolve the financial crisis. The Archbishop said the credit crunch was a ‘sort of’ reality check for a society that had become driven by unsustainable greed and likened the government’s plans to boost spending as returning an ‘addict to the drug’. He added that the country had been going in the wrong direction for decades by relying on financial speculation to generate wealth quickly, and needed to rethink they way it viewed material gain. In response the prime minister said ‘we should not walk by on the other side when people are facing problems’ and said the government’s fiscal policy was designed to give real help to families and businesses now.

Mortgage lenders predict the recession will lead to a huge rise in arrears among borrowers in 2009, and the Council of Mortgage Lenders (CML) says the number of households more than three months behind with their repayments would reach half a million. The CML’s latest figures show that gross mortgage lending in November fell by 22 per cent from October, and was 51 per cent lower than the same month last year. It also predicts that sales next year will continue to fall – down to just 700,000 from 900,000 this year and 1.6 million in 2007, while it expects that repossessions will rise to 75,000 by the end of next year.

According to uswitch.com seven per cent of mortgage holders have already taken a payment holiday, and a further two per cent are in the process of applying because of fears they made be made redundant. Analysts believe that the cost of taking such a holiday is underestimated by mortgage holders, millions of whom think interest charges are frozen during the break. However, following a 12-month holiday, a £150,000 mortgage would increase by more than £10,000 and monthly repayments will go up by £80, meaning that those customers will low equity levels in their homes could find themselves struggling.

The proportion of first-time buyers entering the housing market increased for the third month in a row in November, according to the National Association of Estate Agents (NAEA). Figures indicate that 10.4 per cent of all properties sold during the month were bought by first-time buyers, up from 8.3 per cent in August. The NAEA said that traditionally this time of year shows a seasonal downturn in numbers entering the market, which means the full impact of recent interest rate cuts and government announcements helping homeowners would not be felt until next year.

Meanwhile, research from the Building Societies Association shows that 46 per cent of people now believe it is a good time to buy a property, up from 34 per cent in September and 27 per cent in July. There is a perception that mortgages are now more affordable, with just 37 per cent of people worried about affordablity issues, down from 70 per cent in July. But four out of ten people think house prices have further to fall. Lack of job security was seem as a biggest barrier to buying a home for 58 per cent of people.

The average price of a house sold at auction has dropped 31.1 per cent in the three months to November, compared with the same period a year ago, auction specialist Essential Information Group said. The average cost of a property stands at £114,208, which is 34 per cent lower than prices at their peak last summer. A spokesperson from EIG said that it was a common misconception that auctions sell properties cheaply: ‘They don’t. They sell them at their true market value – what people are willing to pay’.

Targets aimed at speeding up English planning decisions may have led to councils rejecting developments, the National Audit Office warns. The 13-week target had resulted in some ‘perverse consequences’ it says, as more applications were rejected. Reviewing 100 applications, the NAO found that 98 per cent of rejections were made within the 13-week target but only 49 per cent of approvals met the target, and on average approvals took 25 weeks. The NAO added that the whole development process from the start of pre-application discussion to the start of construction took on average almost two years.

The financial health of some of Britain’s largest housing associations (HAs) is being questioned following the admission on Tuesday by the Tenant Services Authority that six were on a watch list. In parliament yesterday Vince Cable asked the government was it proposed to do about those facing ‘grave financial difficulty’ and in ‘danger of collapse’. He said HAs had ‘got into bed’ with developers to promote shared ownership schemes on properties they can no longer get rid of, and as a result they ran the risk of going bust or a the last merging with a healthier association.

Public sector bodies, including councils should tackle discrimination on the grounds of socio-economic grounds as well as other types of unfair bias such as race, gender and religious belief, the head of the equalities watchdog said. Trevor Phillips said in a speech to the Fabian Society that class, parental occupation and where someone lived where the best predictors of life chances – or lack of them.

Asylum seekers refused permission to live in the UK but unable to return to their country of origin should be allowed to work and access health care, a report by a Conservative think-tank said. The Centre for Social Justice proposes setting up a new independent body to rule on asylum claims, made up of a panel of magistrates, with charities and voluntary groups providing support to immigrants until they are returned home or integrated into society. Unsuccessful applicants should continue to receive housing and financial support for up to six months pending their removal. The think-tank found there was a backlog of 280,000 failed applications, which could take 20 years to clear, and added that many of those refused applications face destitution or disappear, drifting into illegal employment, prostitution or crime.

The gap between rich and poor has failed to narrow despite the redistributive effect of taxes and benefits introduced by the Labour government, according to figures released by the Office for National Statistics. A review of household incomes over the past 30 years revealed that the share of disposable income earned by the top fifth households rose from 36 per cent to 42 per cent between 1977 and 1991. And in spite of Labour’s efforts ‘the pattern that emerged during the 1980s remains largely the same today’. The top fifth of households in 2006/7 received 42 per cent of disposable income while the bottom fifth received just seven per cent. In 1977 19 per cent of children lived in the poorest fifth of homes, now a quarter of children live in the poorest fifth households.

Governor of the Bank of England Mervyn King has raised the prospect of the wholesale nationalisation of the British banking system saying that the system needed ‘additional measures’ to solve the credit crisis. He said the government’s £500 billion rescue plan had failed to encourage banks to lend more to families and businesses. In a letter to the chancellor, he warned that banks needed extra support from the taxpayer if they are return to normal lending as the UK was trapped in a ‘vicious circle’.

Six housing associations (HAs) have been placed on a regulator’s ‘watch list’ as they faced ‘more risks than usual’ in the next six months, warned the head of the Tenant Services Authority, Peter Marsh. Concerns are growing about the financial security of HAs because of falling house prices and the lack of debt financing and mortgage availability. However, Mr Marsh insisted that associations remained a good place for long-term investment.

More than 85 per cent of local councils across England have seen a drop in income from planning applications, while three-quarters of councils have seen the amount of money they collect to pay for frontline services drop during the past few months. The survey was commissioned by the Local Government Association and demonstrated the effects the credit crunch and recession is having on councils across the country.

Housing minister Margaret Beckett today established the government consultation process for making all new homes zero carbon from 2016, adding the government was ‘absolutely committed’ to the 2016 target. The proposals include setting a minimum level of carbon reduction that developers must achieve through, for example improved insulation or providing onsite renewable energy; requiring a greatly increased level of energy efficiency in new homes; allowing developers to tackle carbon emissions by choosing from a list of ‘allowable solutions’ such as providing energy efficient appliances; and setting a limit on the amount expected to be spent on these allowable solutions. Consultation runs until March next year.

Twice as many people are losing their homes due to evictions by social landlords than mortgage repossessions, Shelter Scotland has warned. It found that 13.1 out of every thousand social housing tenants had an evictions decree granted against them, mostly for rent arrears. The rate for homeowners was 6.8 per thousand. The body representing councils, Cosla, disputed the figures, arguing that the number of tenants taken to court and the numbers of tenants councils had evicted was only half the level Shelter Scotland found. Shelter Scotland called on the Scottish government to offer protection to tenants comparable to that developed for homeowners.

The cul-de-sac used for the TV soap Brookside is up for sale with a credit crunch guide price of £550,000. The 13 properties were bought by the producers of the TV show to cover production costs and to provide a more realistic set than some rival soaps. Since finishing five years ago, the properties have been partially refurbished, although still requiring some work. The properties will be sold collectively at auction.

Housing minister Margaret Beckett announced the government has promised an extra £100 million to help first-time buyers get on the property ladder. Mrs Beckett, determined to provide ‘real help’ for families in the current difficult economic climate, increased the amount available by £100 million, to give households with incomes below £60,000 the chance to buy a new home with the help of a shared equity loan which is free of charge of five years. More than 130 developers have agreed to take part, and it is hoped that 18,000 first-time buyers will benefit. Opponents have accused the government of being irresponsible and first-time buyers of being ‘bribed’.

Home ownership, or the belief that it is the only ‘done thing’ to own your own home, ignores the reality that many people can’t afford to buy a home and has pushed millions into unnecessary debt according to the Residential Landlords Association (RLA). The housing market would be better served by increasing the number of properties for rent, and the housing market and construction industry would be better served by the government encouraging private sector landlords, instead of making life ‘so difficult for them’, RLA argues.

The government has announced it is to commission a major study into housing need to determine whether people want to rent, buy or are interested in shared ownership. The findings will play a major part on the government’s affordable housing goals, according to the housing minister who was giving evidence at a Communities and Local Government select committee into housing and the credit crunch. She said her impression was that there was strong demand for home ownership, including shared equity schemes, and added that she expects housing associations to build the majority of affordable homes, despite moves to encourage council building.

Councils in England and Wales are drawing up plans for a national bank to pool billions of pounds of cash they hold on deposit and invest it in stalled infrastructure projects. The fund would pool up to £20 billion belonging to the 420 local authorities in England and Wales, and at its simplest level LAs could use the bank to offset their savings against borrowings. Councils lost millions of pounds in deposits held with the recently collapsed Icelandic banks.

The head of the International Monetary Fund (IMF) issued a warning over the consequences of a prolonged global slump – unless governments act with greater urgency to jump start ailing economies, violent social unrest may occur around the world. Weak and uncertain government action to the crisis was causing fears that a world recovery could be delayed until late next year of early in 2010. Setting himself firmly against the president of the European Union who has urged European leaders to stick to their ‘fiscal rule book’, Mr Strauss-Kahn said: ‘We are facing an unprecedented decline in output and we have evidence of substantial uncertainty limiting the effectiveness of some fiscal policy measures’.

An estimated 95,000 pensioners have been overpaid a total of £126 million as a result of government errors, for several years the Cabinet office has admitted. The overpayment, which averages at £1,300 per person, will not need to be repaid the government said, but it will be ‘necessary to adjust what’s paid for the future. It does need to be put right from next year’ said the chancellor. The issue was raised in the House of Commons by, you guessed it, Vince Cable.

Facebook has been used to repossess an Australian couple’s home in a legal first. A lawyer used the social networking site to serve legal documents on the couple who had defaulted on their mortgage and a supreme court has ruled that court notices served on the site were binding. After several unsuccessful attempts to track the couple down with conventional means, a lawyer convinced the judge that Facebook was a sufficient method of communicating with the defendants. They now have seven days to respond to the papers.

The number of homes being built in Britain has plummeted to its lowest level since the early 1920s as falling house prices exacerbated the credit crisis in the construction industry. A report out today reveals there have been just 135,000 housing starts this year, compared with 203,500 in 2007, and with many projects dating from before the worst of the financial crisis hit, there are fears that house building will grind to a complete standstill. The report argues the government must speed up its own programme for social and affordable housing as it is ‘clear the private sector is not going to be able to deliver these homes directly or through section 106 agreements’.

Prime mortgage borrowers, at least one month in arrears, have risen 50 per cent to 3.24 per cent of prime loans by the end of September compared with a year earlier. The figures, from Standard & Poor’s meant that combined with falling house prices will put pressure on prime ratings for the first time. The percentage of borrowers in ‘serious’ arrears – defined as 90 days or more overdue, increased to 1.16 per cent of all loans, up from 0.96 per cent.

A scheme to help social tenants buy their homes is likely to fall far short of its target to fund nearly 2,000 purchases over the next three years. Only 62 complete sales through the Social HomeBuy scheme we made between April and September this year, although the government has allocated £15.8 million between 2008-11, enough to fund the shared purchase of more than 1,800 homes for the same period. However, the figures revealed the economic downturn led to a surge in popularity for the Open Market Homebuy and the New Build Homebuy schemes.

Tenants will be able to have a greater say over their housing options and where they wish to live following a £1 million allocation announced by the homelessness minister Iain Wright. More than 30 councils and partner housing associations will be able to offer greater choice to new and existing tenants after bidding to develop their lettings schemes, bringing coverage to more than 80 per cent of local authorities. The scheme offer tenants greater mobility, choice and flexibility to move across different local authority areas.

Disposable income has dropped ‘abruptly’ for more than two-thirds of British households, while the number of people struggling to pay their rent or mortgage is at the highest level for 13 years. A report published by the Bank of England shows that an increase in the cost of food, energy and home loans meant that one in three households saw a decrease in their disposable income of £100 or more each month, while 13 per cent of households, up from 9 per cent in 2007, had difficulty in meeting their household costs. And around 16 per cent of households, up from 12 per cent in 2007, said they had cut back on spending because of concerns about accessing credit.

The head of Barclays bank has predicted that house prices will fall in total by 30 per cent, ahead of the latest UK unemployment figures on Wednesday. The chief executive, speaking in an interview with Sky News painted a bleak picture as he criticised mortgage borrowing levels in the past decade and warned that the UK was only halfway through a slump with house prices set for bigger falls still: ‘We’ve got another 10 to 15 per cent to fall between now and the end of the next year’, as unemployment is likely to go up to at least 7 per cent.

The number of homeless households has fallen by 13 per cent in year on year figures, and by 60 per cent since 2003, according to Communities and Local Government figures. There was also a reduction in households in temporary accommodation, which dropped 3 per cent in the last quarter and 13 per cent in annual figures, to cut the use of temporary accommodation by nearly a third since 2004. The government is investing £200 million during the next three years to bring the number down further. Homelessness minister Iain Wright said that it was a fantastic achievement by local authorities and their partners.

Vast differences in the cost of long-term care for the elderly have been revealed by research from Saga. Fees vary by almost 50 per cent across the UK and typically cost three times more than the average annual mortgage payment. Northern Ireland is the cheapest region for residential and nursing care, while the Home Counties is the most expensive for nursing care and London the most expensive for residential care. On average someone who requires care in a residential home will pay around £25,000 per annum. In the past decade care home fees have risen faster than inflation.

Housing associations are to stop building mixed estates of privately owned and social rented homes because of the credit crunch, leading to fears of a return to ‘council ghettos’ says The Times. Bob Kerslake, head of Homes and Community Agency (HCA) said that during the past 20 years housing developments had a mix of 30 per cent social housing, 30 per cent private homes and 30 per cent shared ownership, but the significant financial risks from the credit crunch has made people reluctant to invest in housing developments. He said housing associations already have 10,000 homes for private sale or shared ownership that have not found buyers. Under latest plans, a third of homes on an estate will be social rented at very low rate, and the rest will be at subsidised intermediate rents – about 80 per cent of the market price – for low-income earners.

The government has dropped the method it uses to check the number of social homes that meet its decency standard. In the past, Communities and Local Government (CLG) has used figures from the English House Condition Survey (EHCS) to measure progress towards making 95 per cent of homes decent by 2010, but last year CLG realised that landlords reported nearly 300,000 fewer properties remained below the decent homes standard. CLG announced that it would rely solely on landlords’ figures from now on.

People are to be asked questions about their citizenship, national identity and understanding of English for the first time as part of the national census. In an effort to gain more comprehensive information on immigration, people will also be asked when they entered the UK and their intended length of stay. Other changes include questions about civil partnerships and second residences. The next census is scheduled for 2011.

Experts, analysts, forecasters, crystal ball gazers – call them what you will, the pundits are all laying different odds on when the property market will return to the peak levels of 2007. Most predictions agree that the recovery will begin in 2010, but the Centre for Economics and Business Research argues that levels won’t return to their previous heights until 2013, while Capital Economics predicts prices will fall by 35 per cent which could take a long time to recover from. Estate agents are not expecting house prices to return to their peak levels until 2018/19.

Details of the homeowner mortgage support scheme announced by Gordon Brown last week have been released and fewer than 10,000 homeowners are likely to qualify. The critieria to qualify for the deferment of mortgage repayments for up to two years includes having a mortgage of less than £400,000; borrowers having no more than £16,000 in savings; or not be in receipt of mortgage rescue assistance. However, it has emerged that the UK’s eight biggest lenders have only agreed ‘in principle’ to the idea, while sub-prime lenders, considered responsible for half of all repossessions, will not join the scheme at all.

Researchers at Durham University have found many homeowners are remortgaging their homes for cash to supplement their day-to-day expenditure. The researchers looked at the spending patterns of more than 8,000 families from 2001 to 2005 and found a third of people used the cash released by equity in their homes for ‘other specified reasons’, ie as a form of ‘self-administered welfare’ rather than on luxuries or home improvements. A spokesperson said that the clampdown on lending by banks and the collapse in property values was a welfare disaster for struggling households.

The number of mortgage deals continues to shrink as lenders ration their home loans in favour of those with a large deposit. The number of deals is down 65 per cent in the past year and 25 per cent since the start of November, and more than half the available loans now require a deposit of 25 per cent or more. A year ago there were still 257 deals available with no deposit required, but this has shrunk to just 10 by the beginning of December, and these are ‘highly restrictive’.

Councils across the UK can expect a £2.5 billion cut in their £125 billion budget as a result of the economic downturn, the Audit Commission warned. However, it says that despite the smaller budget, local authorities are well placed to weather the recession, after cutting staff costs and energy consumption.

There will need to be a 67 per cent increase in the amount of land available for new housing if the government is to meet its housing target, according to research by Hometrack. It says that developers are cutting outputs of flats in favour of building larger homes, shifting the near 50:50 split between the number of houses and flats built towards a ratio of 75:25 in favour of houses. According to the research, the shift will impact on density of development and ultimately land values, and the ‘planning system will need to supply a lot more land in order to maintain levels of development’.

The Royal Bank of Scotland is offering the public free financial advice from every branch from tomorrow. Around 1,000 customer service staff at the bank have been trained by the Consumer Credit Counselling Service to offer impartial help on areas such as budgeting skills and how basic financial products work. They will not be allowed to sell products. The bank said the offer is open to anyone – whether they bank at RBS or not, or even if they do not have a bank account at all.

Three UK buildings have made it on to a list of the world’s 10 ugliest buildings. The most unattractive building in the UK is the Catholic Metropolitan Cathedral in Liverpool in fourth place on the list, followed by the Scottish parliament building in eighth place, and finally the central lending library in Birmingham at ninth. No other country boasts as many buildings on the list as the UK.

Information from a survey of local authorities by the Care Leavers’ Association has found as many as 389 young people have gone missing from care since 2000. The majority of them are believed to be asylum seekers targeted by traffickers after arriving in the UK who were in the South of England. While the survey indicated that some local authorities could account for all the young people in their care, as many as 41 LAs have seen young people go missing without a trace. The charity is calling on local authorities to do as much as they can to find the children and said that an urgent inquiry was needed.

The government unveiled its plans to get one million people off benefits and back to work yesterday. The plan, to ‘transform’ the lives of people currently on benefits, was launched by work and pensions minister James Purnell who said benefit claimants would have to play their part in the economy either with some form of work or in preparing themselves to find work in the future, or face losing some state payments. Only carers, jobless parents of very young children or severely disabled people would be exempt.

The number of middle-aged people caring for their children or grandchildren and looking after their elderly parents – the ‘sandwich generation’ – is likely to grow as projections of a rapidly ageing society were released by the Office for National Statistics. Nearly one in four of the population will be over 65 in less than 25 years, and the number of those over 85 would more than double. There are also additional problems arising from the breakdown of families increasing the number of older single people and the reduction of informal caring.

A YMCA England report has found that 72 per cent of those questioned believe that extra help could prevent the breakdown of family units and stop young people from leaving home. The survey of 50 parents of homeless or formerly homeless teenagers also revealed that 42 per cent of respondents found housing advice the most helpful intervention, particularly independent advice services. A spokesperson from the YMCA said they wanted to get the voices of parents and extended families to understand why young people felt they needed to leave home.

A quarter of the population – more than 11 million people – are struggling financially, including around 1.3 million who admit their finances are entirely out of control, according to a survey carried out for insurance company Axa. Almost four million people say they cannot cope with their credit card bills, while one million cannot keep up with their mortgage repayments. Around one in twenty people have been threatened with bailiffs or repossession, and more than six million people said they had no savings left at all, thanks to the credit crunch.

London’s most run down housing estates are set to receive more than £100 million of funding. Around £77 million in funding has been promised to kick start a programme of estate and area regeneration that’s currently ‘stalled’ by the credit crisis, while a further £55 million will be invested to reduce homelessness, provide larger family homes and to maintain and improve social rented homes. The funding is part of the London mayor’s housing strategy but comes from the Homes and Communities Agency’s affordable housing budget.

Housing minister Margaret Beckett announced a £605 million allocation to 163 local authorities with long-term plans to increase house building to meet the needs of their communities. During the next two years the money will enable LAs with plans for growth to invest in the essential services that need to accompany the building of new homes, including transport links, schools, and the provision of parks. The 163 LAs singled out have signed up to deliver 1.3 million new homes by 2016.

Afghanistan has beaten Russia – five goals to four – to win football’s World Cup for homeless people held in Melbourne this year, while Zambia took the inaugural women’s cup. It was the sixth annual world cup, an event aimed to raise awareness of the nearly one billion worldwide who are homeless, and supports grassroots projects in more than 60 countries. So far, at least 15 participants have applied for ‘further visas’.

England’s regional development agencies have failed to close the north-south divide and should be either closed down, merged or given new objectives, according to a report by the Centre for Cities. Although the report accepted that reform was unlikely during the economic crisis, it argued that agencies should be shaken up after the next election to focus on boosting regional growth rates and promoting job creation. It recommends the three northern RDAs should be merged into a single agency, while the South East, East and London agencies should be streamlined or abolished.

Tens of thousands of tenants could benefit from an EU decision to fund a massive programme of green measures to improve social housing. The proposals will provide 1 billion euros to fund energy efficient building initiatives and renewable energy measures including insulating walls, roofing and windows, using solar panels and replacing old boilers with more efficient ones. The proposals will be targeted towards low-income households.

Property sales fell further in November, according to the latest figures from the Royal Institution of Chartered Surveyors (RICS). The number of sales per estate agent fell during the three months to November to an average of 10.6, down from 10.9 a month ago, the lowest level since it began its survey in 1978. However, CML said there was some light at the end of the tunnel as interest among potential buyers had risen for the seventh month in a row and was now positive for the first time since October 2006 – with a 14 per cent increase in the number of buyer enquiries.

Meanwhile the Council Of Mortgage Lenders (CML) may scrap its annual house price forecast because of the credit crisis. CML said that it was considering not publishing its forecast for the coming year as a result of the low level of transactions in the market. It said it may move away from the focus on house prices in the future and shift attention to the levels of mortgage lending, repossessions, and the number of homes that are changing hands instead.

Campaigners against the eco-town proposal of Weston Otmoor have won a protective costs order to take part in the High Court proceedings. This allows the campaign group to be considered an official ‘interested party’ that can participate in the proceedings taking place in January. The ruling judge granted the protective costs order because the issues raised are of ‘considerable public importance’ and the cost may be assisted by evidence and submissions in respect of another eco-town.

The Office of Fair Trading said it would review the buying and selling of homes next year. The review will look into internet property sites, price competition between agents and consumer protection, four years on from the last review. The study may also cover the relationship between estate agents, and mortgage brokers, surveyors, solicitors and other professional advisers.

From April, homeowners will not be allowed to put their home on the market until all the key documents are in the home information pack, including a new property questionnaire. Currently sellers can start marketing their property as soon as they have commissioned a pack and for up to 28 days before they receive the pack. The property questionnaire will include information on flood risks, the safety of gas and electrical supplies, service charges, structural damage, and parking arrangements.

A housing association has shocked residents by sending a Christmas card which read: ‘Jingle bells, jingle bells, jingle all the way, please make sure your pay your rent, so in your home you’ll stay’. The cards have been sent to around 650 homes in the South West, and a resident said that while they may look like Christmas cards, most people see it more as a veiled threat. The manager of the housing association said it was simply to remind people that rent is an important payment.

Nearly three-quarters of landlords are bracing themselves for an increase in the number of tenants falling behind in their rent according to the National Landlords’ Association (NLA). Most landlords thought that rent arrears will increase next year as the economic situation worsens and unemployment rises, and just over a third said they were already experiencing payment difficulties with tenants.

A council official responsible for helping the homeless has evicted elderly and frail tenants from their sheltered housing in Norwich and moved into it herself with a colleague. Kristine Reeves co-wrote a paper last year recommending that the council demolish the 25 homes and replaces them with high-density housing and flats. Instead of using a security company to keep out squatters and vandals, council officials decided unilaterally to let the accommodation to employees until they were demolished. Meanwhile the former occupants have been dispersed to old people’s accommodation around the city.

The banks are pressing the chancellor for clarity on a scheme to let homeowners facing repossessions defer interest payments. There is confusion over who would be eligible, how claims will be policed and whether banks will be charged a fee. The banks main concern is establishing which borrowers will be eligible for the two-year holiday from interest payments, and limiting fraud.