ROOF Blog archive

Bradford & Bingley, publicly owned since last September, said that the proportion of mortgage customers in arrears by three months or more surged from 1.6 per cent to 4.6 per cent – or one in every 22 – since 2007. And it warns that worse is yet to come as the arrears rate climbs. B&B’s arrears rate – the highest of Britain’s major lenders – ‘highlighted the woeful credit control that was in place’, according to banking analyst Alex Potter.  More than 6 per cent of buy-to-let and self-certification customers are now more than three months in arrears.

A senior Treasury spokesperson yesterday admitted that it dealt with the failure of banks such as Northern Rock and Bradford & Bingley in a way that was ‘excessively leisurely’, but added that the Bank of England had also been slow to act. Nick Macpherson, permanent secretary to the Treasury, told a House of Commons public accounts committee, that ministers will be asked to consider an inquiry into the role of the Financial Services Authority.

As proposals for full disclosure of senior local council staffs’ pay and perks were yesterday announced by local government minister John Healey, the row over MPs’ expenses rumbles on. Mr Healey said the new rules would require councils to set out details for around 2,500 posts, covering salary, bonuses, pensions, perks and compensation pay-offs, that would bring councils up to the ‘same high standards that are already required of civil servants and government ministers’. Meanwhile, a common’s mole has been trying to sell the expenses records of all MPs for £300,000, while MPs have been given the chance to edit receipts submitted with their expenses, before they are made public.

An investigation by the BBC into property registration has lead the boss of Nationwide to call for a major reform into the Land Registry, saying it was needed to prevent an ‘exponential rise in fraud’.  The BBC applied to the Land Registry, claiming to be the owner of an unmortgaged house and asked to change the property’s correspondence address, without being asked for proof of identity. Since 2005 the registry has paid out £36 million in compensation for mistakes and fraud.

A programme to make buildings and homes more energy efficient would lead to 55,000 direct job opportunities, according to Greenpeace. An investment of £5 billion – equivalent to just 0.6 per cent of the government financial package aimed at stimulating the economy – could establish a number of measures to cut energy including a home energy MOT,  subsidised loans for work and investment in skills needed to meet the increased workload. Greenpeace added that support for creating jobs by greening the economy has so far been poorly funded by the government.

The Tenant Services Authority has completed a study into tenant involvement in housing management and concluded that they want more involvement, but barriers mean this might not happen. The report found that there is a link between satisfaction and involvement in general, with tenants who have a good relationship with their providers more likely to feel empowered and involved. A minority of tenants did not want to get involved in property management because they were satisfied with the service they were receiving, while others wondered how much influence their involvement could have.

Westminster city council has promised to rehouse all overcrowded households by 2014. More than 3,000 households are in priority need on the council’s waiting list, including people with medical needs, those living in temporary accommodation and more than 1,000 families in overcrowded households. The first 40 households living in the most severely overcrowded properties will be moved by the end of the year.

More than £800 million has been deposited in the tenancy deposit schemes, an increase of a quarter of a billion pounds in less than 12 months, covering more than 800,000 tenancies and 1.25 million tenants. The number of disputes has also risen, with 6,000 handled in 2008/9. It has been nearly two years since the schemes were introduced after a campaign by Shelter.

The appeal court ruled yesterday that failed asylum seekers with chronic illnesses were not entitled to free health care on the NHS even if they are unable to return to their homeland, although the ruling judges said that hospitals have the discretion to provide free treatment to individuals if they cannot afford to pay. The judgment determined that to receive free NHS treatment the patient must have resided lawfully in the UK for at least a year. The judges called for the process of choosing which patients who do not have to pay to be clarified by the government.

The government has admitted its house building target of three million affordable new homes by 2020 is in trouble. Margaret Beckett said the government needed to look at ways to put the programme ‘back on track’ once the economic downturn had come to an end, but added that it was doing what it could to help the building industry. Housing bodies are calling for the government to do more, including investing in empty homes.

More than 100 Labour MPs, including some senior cabinet figures, have backed a campaign to top up benefits or tax credits to low-paid parents. In an open letter to the Observer, the MPs argue that giving tax cuts to the middle classes may see money squirrelled away into savings accounts, whereas giving cash to those who really need it ensure it gets spent. Work and pensions minister James Purnell and children’s secretary Ed Balls are among those urging a payments boost.

Mortgage approvals increased by 19 per cent during February, according to Bank of England figures. There were 38,000 approvals in the month, up from 32,000 in January, which surprised pundits, giving them hope that low interest rates and falling house prices may be encouraging buyers back to the market. Consumers are growing uneasy about the outlook for the economy, however, as last month saw also the biggest repayment of consumer debt since records began in April 1993, with consumers repaying £245 million more than they borrowed.

Landlords are buying more properties than they are selling for the first time in two years, research into the buy-to-let sector by the Association of Residential Letting Agents (ARLA). The quarterly survey found, however, that one in five ARLA members is struggling to meet mortgage repayments, and more than one in five reported at least one property on their books being repossessed on a weekly basis. Rental returns have remained largely consistent with returns on flats unchanged at 4.9 per cent, while houses are down slightly from 4.9 to 4.8 per cent.

Meanwhile, one in three private landlords have tenants in arrears, the National Landlords Association has revealed. The research found that during the past six months, 44 per cent of landlords have experienced rental arrears, and when faced with arrears, only 50 per cent of landlords attempted to recover the loss of earnings through the courts.

Scotland’s biggest local authorities are to use millions of pounds of public money to offer mortgages to people who have been turned down by banks. Dundee city council will become the first council to offer the 100 per cent mortgages to those on low income with no savings or collateral, with Edinburgh and Glasgow expected to launch similar schemes later this year.  Critics called the plans ‘madness’ and have accused the authorities of misusing public funds by offering credit to people who may not be able to keep up repayments, raising fears that taxpayers will face a huge bill if borrowers default.

Meanwhile, Dunfermline building society, Scotland’s largest, is to be broken up and sold off. After incurring losses of £26 million last week, the Treasury announced that good loans and deposits are being bought by Nationwide and the Treasury will take in £1 billion of commercial property lending and mortgage debt. Alistair Darling had said the Dunfermline would have needed between £60 million and £100 million to keep it going because of its exposure to risky assets, and full nationalisation would not have provided ‘value for money’, but its chairman blamed the Treasury of having ‘deliberately scuppered’ any chance of the society remaining independent.

A £22 million investment package aimed at renovating empty buildings across London has been unveiled by Boris Johnson. The London mayor had pledged to ensure that no more than 1 per cent of London’s housing stock is empty for more than six months, and has committed £39 million, with a further £21 million next year, to bring empty homes back into use.

Campaigners are urging the government to protect thousands of private tenants facing eviction as landlords fall into arrears, calling them the ‘forgotten victims of the repossession crisis’. The issue was first raised by ROOF in the January/February issue. They want new laws in England and Wales to give tenants more time than the current two weeks’ notice when their home is repossessed. While government has agreed to increase this notice period to seven weeks from 6 April, campaigners estimate that more than 8,000 buy-to-let properties could be repossessed in the coming year, forcing at least 10,000 people into possible homelessness. They are calling for the law to be changed to allow courts to defer repossession.

House buyers are being advised that the bottom of the fixed rate home loan has been reached, and rates are likely to increase soon, possibly as early as next week. Mortgage brokers are warning the more than a million homeowners currently on the standard variable rate to lock into a long-term fixed rate as borrowing costs are increasing in response to rising gilt yields.

Council leaders are furious that they will have to pick up the tab for the government u-turn over rent increases and say it will cost them at least £10,000 each in administrative costs. Councils had been pushing for a drop in council rent increase from 6.2 to 3.1 per cent on average, which the government only agreed to after authorities had informed tenants of their rent levels for the coming year. Communities and Local Government said it would not pay for the cost of informing tenants of the change to their rent, and local councils say they will need to use money set aside for essential work such as repairs.

A poll has revealed the overwhelming majority of people want the country to start living within its means, with more than two-thirds of voters wanting the government to spend less on public services. Just 9 per cent believe that public spending should stay at the same level and 6 per cent want to see it increased, but just under three-quarters of those questioned believe that the top rate of income tax should be 45 pence or more.

The number of planning applications received by councils in the three months to December 2008 was 26 per cent lower than in the same period in 2007, with decisions on planning applications for residential developments decreasing by 25 per cent in the final quarter. Councils were also found to have processed 70 per cent of major applications within 13 weeks in their period, unchanged from the previous year, but still short of the 80 per cent target planned by 2011.

A number of local authorities are letting developers pay reduced section 106 contributions or defer payment until the economic outlook improves. Medway council for example has started a flexible payment policy in response to concerns from house builders including waiving interest on late contributions, while Norwich city council is prioritising section 106 contributions where developers cannot afford to pay them. The councils argue that unless they are prepared to take calculated risks ‘they are never going to help stimulate the market’.

Meanwhile housing minister Margaret Beckett announced £170 million of funding to be allocated to 29 transport projects that will support the development of new housing. In total 29 projects that will be paid for by the community infrastructure fund are planned across the regions – including rapid bus routes, pedestrian bridges and improvements to road junctions, and will directly support 40,000 new homes.

Following a review of the private rented sector by the Scottish government Scottish tenants are considered marginally more happy with their landlords than tenants south of the border. It found 85 per cent of tenants were either very satisfied or fairly satisfied with their landlord and property, compared with 83 per cent in England. In Scotland, where problems do occur they tend to be related to response times for repairs, and issues on deposits, with only a small minority suffering from poor standards.

The Land Registry house price index showed a 2 per cent drop in prices during February, bringing the annual rate of decline to 16.5 per cent. The latest falls pushed property values back to September 2004 levels, and were the 18th month in a row in which the annual figures showing a fall. The average house price now stands at £153,862.

It seems that the prime minister has lost the battle of the Budget, as he signalled that Britain would not be announcing nor pushing for a fiscal stimulus, after the failure of a gilt auction underscored concerns about the impact of further borrowing. The rift appears to have been healed between Mr Brown who has consistently backed a global stimulus plan, and Alistair Darling and bank of England governor Mervyn King who said there wasn’t enough money for a second wave of tax cuts of public spending.

Public spending is now funding almost half of new home building, according to figures from the National House Building Council. The public and private sectors provided almost equal numbers of new houses (around 45 per cent each) for the three months to the end of February, compared with just a fifth of new homes that were funded by the public sector at the end of 2007. The number of new homes being registered by the private sector dropped by around 75 per cent during 2008, while public sector registrations have stayed the same.

Homes and Communities Agency is looking at how it could contribute more towards bringing empty homes back into use, using part of its £8.4 billion affordable housing budget. However, it has warned that it could not bring all 700,000 empty homes back into use because homes would have to be of the right type and in the right place.

The average Band D council tax bill in England is set to rise by 3 per cent – the lowest rise in 15 years, Communities and Local Government confirmed. Overall, the average council tax per dwelling will increase by 2.6 per cent. The Local Government Association urged the government not to use its powers to cap councils this year, ‘given that townhalls have made such efforts to keep council tax down this year’.

Seven local authorities acted negligently by depositing £33 million of taxpayer’s money into Icelandic banks just a few days before their collapse, the Audit Commission said today. The Commission singled out the authorities for breaching their own protocols. Overall 127 English councils had more than £950 million deposited in the banks when they went into administration. The Local Government Association said councils expect to get back the ‘lion’s share’ of their money.

Desperate homeowners are flooding the rental market with homes they cannot sell and rents have plummeted by more than 16 per cent, according to figures from Globrix. The number of new homes coming on to the rental market has increase by 57 per cent in the first quarter of this year, compared with the last three months of last year, with Carlisle showing the biggest rise of 171 per cent. The over-supply has also pushed the average rent down from £950 in May last year to an average of £795 at the start of March.

Gordon Brown was accused by the Conservatives last night of dragging Britain towards a ‘social catastrophe’ of benefit dependency. They called for an end to ‘doling out money’ to undeserving claimants and want a complete overhaul of the benefits system. Shadow welfare and pension secretary Theresa May said a Conservative government would ensure benefits are ‘time-limited’ so long-term claimants cannot get the dole without doing voluntary work and vowed to end the ‘couples penalty’ which rewards separating couples with extra tax credits.

FRANK, the national drugs information service, has launched a real-time text messaging service for young people where they can get advice and information from trained personnel on drugs and drug-related issues. It has scope to reach more than 6.5 million 11- to 18-year-olds across the country.

And in the latest bid to remove antisocial young people from gathering on an estate, a pink light highlighting their spots has been installed. A spokesperson from the Layton Boroughs Resident’s Association in Mansfield, Notts, said they made the move in the hope of cutting antisocial behaviour in the estate by embarrassing the youths. The National Youth Agency said that anything that aims ‘to embarrass people out of an area is not on’.

A London-wide consortium of homelessness charities has launched a new programme, skills for jobs for homeless people that aims to break down the barriers homeless people face in finding employment. The programme offers support and training for homeless and vulnerably housed people and matches them with suitable employment opportunities. Research shows that only 2 per cent of homeless people are in employment but 77 per cent want to work.

A banking report from Cap Gemini has warned the scale of mortgage lending in the UK is unmanageable and ‘exceeding reasonable limits’. The report says debt is running at 86 per cent of gross domestic product – around £1,200 billion – but 60 per cent is the recommended sustainable upper limit. The report said the main reason for the rise was the uncontrolled increase in housing prices, and mortgages remain a loss leader for banks as margins have shrunk.

Tensions between the Prime Minister, Bank of England and Treasury are bubbling away. Bank governor Mervyn King sided with the chancellor yesterday as he appeared before a Treasury select committee and warned Gordon Brown that the UK could not afford a second economic stimulus package. Meanwhile Mr Brown told European MEPs in Strasbourg that the EU had to take the lead in rehabilitating the world economy and before next week’s meeting of G20 leaders is calling for them to bring forward fiscal stimulus packages to back the world’s economies.

The Council of Mortgage Lenders has today called on the government to introduce three simple measures in the Budget to kick start the housing market. CML wants low-cost home ownership schemes to be extended and simplified; stamp duty to be reformed; and the introduction of greater support for homeowners who get into difficulty. It said that it was focusing on a narrow range of measures aimed at encouraging housing market activity and limit repossessions.

Millions of people who bought insurance to pay their mortgage if they become ill or lose their jobs, are facing rises of up to 40 per cent in their monthly premiums. Insurance companies are blaming the increase on a rising number of claims. Figures from the Association of British Insurers show a 200 per cent increase in claims on mortgage payment protection insurance during the past year, and applications for policies are ‘soaring’.

Working grandparents would be entitled to two weeks of ‘granny leave’ after the birth of a grandchild, and entitled to tax credits, if the charity Grandparents Plus have their way. It is calling for the government to give grandparents an entitlement of two weeks’ leave, to be taken at any point in the child’s first year, receive credits towards their national insurance contributions, and to extend the childcare tax credit to grandparents who provide childcare to help parents return to work. A spokesperson for Grandparents Plus said that 14 million grandparents provide £3.9 billion in childcare yearly.

The government has today set out proposals for helping rural communities. It says it will relax planning restrictions to allow for more affordable housing, but the government has rejected calls to restrict the growth of second homes in rural areas. Liberal Democrat MP Matthew Taylor on whose report the government’s proposals are based, broadly welcomed the response, but warned that ‘dozens’ of villages will die unless the wealthy are stopped from buying holiday homes in ‘desirable areas’.

Physical and verbal attacks take place on housing officers in England and Wales more than once a day. That is what research by the Conservative party has found. Local authorities reported a total of almost 1,200 incidents during the past three years, which the Tories blamed squarely on the ‘appalling’ housing crisis. The highest number of physical assaults were recorded in Cambridge, Hull and Gwynedd.

A new British bill of rights was outlined in a Green Paper in parliament yesterday. It will enshrine entitlements to welfare, equal treatment, housing, children’s well-being and the NHS, according to justice minister Jack Straw. However, critics were divided about its likely impact in strengthening rights or if it was simply a ‘cosmetic exercise’.

Nearly £1 billion in tax credits is unclaimed from HM Revenue and Customs by families worried they would have to repay hundreds of pounds because of mistakes made by officials. The commons public accounts committee believes that one in three eligible people in parts of the country do not claim the credits. The committee blames the clawback of £770 on average from 1.3 million families in 2006. Since their introduction in 2003, £85 billion has been paid out in tax credits, but in the first four years of the scheme, HMRC overpaid £7.3 billion to some claimants and underpaid others by more than £2 billion.

Council leaders have written to the chancellor calling for VAT to be slashed on long-term empty homes to bring the estimated 300,000 properties back into use. The Local Government Association wants the standard rate of VAT brought down to 5 per cent on the refurbishment of homes empty for six months, rather than the current two years.

Mortgage approvals have increased for the third month in a row, according to figures from the British Bankers’ Association. There were 28,179 mortgages approved for house purchases in February, up from 24,278 in January, however, the figure was still 31 per cent lower than a year earlier. The rise has been attributed to the banks’ increased market share after handouts from the government.

Meanwhile borrowers are flocking back to fixed rate deals, as they look to protect themselves from rate hikes in the future. Legal & General found that during the first quarter of 2009, 77 per cent of residential mortgage customers chose a fixed rate deal, compared to 65 per cent in the last quarter of 2008. Of buy-to-let borrowers 68 per cent choose fixed rate mortgages between January and the end of March, up from 43 per cent at the end of last year.

A number of web-based property sites are showing a rise in the number of people advertising their homes for a house swap. Gumtree recently announced a 12 per cent increase in the past year, with more than 2,000 properties available immediately. A website dedicated to home swapping – Homeswapper4sale – has more than 5,000 registered homeowners on its site, worth £1.4 billion, and says swapping will become more popular as mortgage finance remains tight.

Scottish landlords could play a greater role in the country’s housing system, the Scottish government said, as the findings of the most comprehensive review on private rented housing are unveiled. The study has shown a marked increase in demand for private lets from students, young professionals and migrants, along with a high level of satisfaction with landlords, although issues were raised about repairs and tenancy deposits. Landlords too, were generally positive, but had concerns about the length and cost of legal action to seek repossession, and the administration of housing benefit.

The Homes and Community Agency has announced the list of organisations that will act as Local HomeBuy agents across England for 2009–11. Fifteen organisation, all registered social landlords, have been appointed to cover the 37 zones across England, with two appointed for the first time.

Gas and electricity regulator Ofgem announced a package of new rules for energy suppliers yesterday that will give consumers more power and crack down on unfair practices. The proposals include stopping the overcharging of some customers, and a restriction on doorstop selling.

Meanwhile, a cross-party bid to end fuel poverty by promoting energy efficiency and social tariffs for the less well off has failed in the Commons. Despite backing from a range of organisations including Help the Aged and Friends of the Earth and with cross party support, debate on the Fuel Poverty Bill ran out of time. Energy minister Joan Ruddock said the government already had a policy to tackle fuel poverty and criticised the ‘absolutist’ nature of the Bill which placed a duty of ministers irrespective of cost.

Five per cent of social housing properties in inner city areas could be unlawfully sub-let, with some people making more than £12,000 a year from it, an Audit Commission inquiry has found. Local authorities or housing associations can lose up to £75,000 on a property as a result of sub-letting, which counts as an act of fraud.

A victory for a householder who had his home repossessed after being mis-sold a mortgage could set a precedent preventing others from losing their property. The homeowner was a housing association tenant, with fixed rent for life, when a mortgage adviser persuaded him to buy the property. He was eventually repossessed, but lodged a complaint that his mortgage adviser ‘failed to consider what would happen when the attractive discounted [mortgage] rate ended’. The Financial Ombudsman Service awarded compensation, ruling that the adviser had broken Financial Services Authority guidelines that advice must be ‘suitable’.

Consumers will bear the brunt of the credit crisis for years to come through higher rates on homes loans. Research by the National Institute of Economic and Social Research found that ‘scarring’ from the crisis would lead to higher borrowing rates for up to nine years. ‘Consumers have to choose between lower rates, and a safer economy,’ a spokesman said.

The Homes and Communities Agency is looking into providing new types of social housing contracts that would not give tenants the right to remain in their homes for life, as a way of encouraging major financial institutions to build homes for rent. Speaking at a conference this month, HCA chairman Robert Napier said the agency was exploring whether it could revive house building by persuading institutions to put their money into homes for private rent.

Switching public spending from ‘grey’ projects such as roads and airports to ‘green’ schemes creating parks and allotments would save the government millions of pounds, improve health, cut climate emissions and create jobs, Natural England and Cabe (the Commission for Architecture and the Built Environment) warn. Cabe criticises local authorities and argues that few cities are taking climate change seriously. Cabe said the greening of the urban spaces would deliver ‘multiple benefits’ and create places where people want to live.

Councils will receive financial rewards for hitting lower targets relating to housing, job creation, and enterprise than those agreed nearly a year ago. Communities and Local Government, which has the equivalent of £2.3 million to spend for each of England’s 150 local area agreements (LAAs), has overhauled its system of rewarding councils in response to the economic downturn.

London has been pushed from the top of the world’s most expensive city list, by Monaco, where prime property is sold for £47,000 per square metre – up 2.1 per cent from 2008. London, which saw one of the biggest falls in value of any part of the world, down 17 per cent, is in second place at around £24,000, and Manhattan in third place, down 4.1 per cent to £13,000. Almost all the world’s wealthy reported a fall in the value of their property portfolios last year, however, just 5 per cent were ‘very concerned’ about the fall in value, and almost 55 per cent planned to increase their portfolios during the next two years.

Sixty children become homeless in Scotland every day, Shelter Scotland warns – the equivalent of 22,000 young people a year. This is an 18 per cent increase during the past five years. The research also found a 27 per cent increase in the number of families in temporary accommodation over three years. Shelter says the problem is likely to get worse as economic conditions worsen.

There was some confusion over the weekend as to the Conservatives pledge to abolish inheritance tax on estates worth less than £1 million, after shadow business secretary Kenneth Clarke said the plan was only an ‘aspiration’. He has since issued a statement insisting it would happen in the first term of a Tory government, and has been backed by other shadow cabinet ministers. Some political pundits and senior Tories have questioned whether they should be going ahead with a pledge made long before the full impact of the credit crunch had been felt.

One in three Britons is worried their home may be repossessed, with three-quarters of people claiming the government should do more to help struggling homeowners. Consumer group Which? found that 35 per cent of people with a mortgage say they are worried to some degree that they may lose their property, while six in 10 workers said they were concerned they or their partner may lose their job, with 43 per cent saying they would be unable to keep up with their mortgage. A further quarter is fearful of going into negative equity during the year. Which? also argues that the government should force lenders to take part in it homeowner mortgage support scheme.

The government’s scheme to help homeowners struggling in arrears is in jeopardy, after slow take-up from lenders. The homeowner mortgage support scheme is designed to allow homeowners who suffer a sharp drop in income to defer interest payments for up to two years, and was due to be launched in April. Nationwide Building Society the third-largest lender in the UK said it was still considering whether the ‘considerable administrative burden’ was worthwhile considering the small number of borrowers who would benefit. Lloyds and RBS are expected to commit to the scheme after coming under heavy pressure from the government.

Council bosses are drawing up plans on how public services can be delivered if the government makes cuts to council budgets because of the recession. The Society of Local Authority Chief Executives and the Chartered Institute of Public Finance and Accountancy are joining forces to analyse the implications of a ‘full range of possible economic scenarios’ and are coming up with a list of what services might be cut if the recession is deeper than forecast – with street lighting, leisure and elderly care services likely to bear the brunt of cuts.

The Royal Institution of Chartered Surveyors (RICS) has said that government targets to make all new homes zero carbon by 2016 are not realistic. RICS said the government will struggle to meet its target, as building zero carbon homes is currently too expensive, but a 70 per cent reduction could be achievable through building energy efficient homes with access to on site technologies. A spokesperson for RICS said this was a ‘pragmatic solution’ to reducing our carbon footprint given the current recession.

The new HomeBuy Direct scheme – allowing buyers earning less than £60,000 to take out a mortgage for 70 per cent of the cost of a property and an interest-free loan for the remaining 30 per cent – has been so successful that developers say they are in danger of running out of stock by summer. Housing minister Margaret Beckett said that demand had been three times the amount the government had expected, particularly in London. The government originally said the scheme would help 18,000 first-time buyers, but Barratt, one of the developers involved, said that 20,000 potential buyers had registered interest with them.

Meanwhile the Treasury has been criticised for allowing Northern Rock to continue to lend £800 million in mortgages with a loan to value rate of up to 125 per cent for six months after it was bailed out with taxpayers’ money. A report by the National Audit Office said the Treasury was aware of ‘potential shortcomings’ in how to deal with failing banks from 2004 and ministers were slow to respond and were under-prepared for the crisis. Business secretary Peter Mandelson defended the government saying the alternative to continuing lending was to put the entire business into receivership.

The government has decided to push ahead with its housing benefit reforms despite advisers fearing they will discriminate against thousands of families and black and minority ethnic households. The changes will cap from next month the amount of local housing allowance payable for homes of six or more bedrooms, at the five-bedroom rate. A Work and Pensions advisory committee had strongly urged the government not to proceed with the change, saying up to 5,000 families could lose out as a result – of which 3,000 have children and live below the poverty line, and at least 40 per cent were from non-white communities.

Two-thirds of England’s top 50 towns and cities had an average 8 per cent drop in applications for home extensions between 2006 and 2008, new research has found. Homeowners in London and towns in the South East of England however, bucked the trend with substantial increases in applications – Luton saw the biggest increase at 19 per cent, Greater London saw a 10 per cent increase and Slough had 8 per cent more applicants. The South West appears the most affected by the downturn, with Exeter and Plymouth seeing the largest decreases in applications for extensions – 23 and 22 per cent respectively.

The London Assembly has unanimously agreed a motion calling for an increase in the supply of family homes and improvements to the quality of family housing. The Assembly agreed a target in the Mayor’s housing strategy of 42 per cent of new social rented housing should have three or more bedrooms, but it has also urged the mayor to do more to meet demand. It warned that provision in the intermediate housing sector is falling significantly below the mayor’s target of 16 per cent.

Waiting lists for social housing in England are set to reach a record level by 2011, the National Housing Federation has warned. An extra 200,000 families over the next two years – including 80,000 people who will lose their home due to repossession or unemployment – will push the total to around two million people. The waiting list has increased from one million in 2001. The NHF added that house building will fall by 50 per cent in 2010 to just 70,000, further increasing pressures.

The Tenant Services Authority has announced that the housing association sector turnover was more than £10 billion for the first time in 2008. Turnover was up by 10.7 per cent and the value of housing association properties was up 10 per cent, as construction of new homes and the transfer of homes from local authorities to housing associations increased.

Moodys, the rating agency, disputes the TSA announcement, having calculated that one-fifth of associations in England could face financial difficulties during a lengthy recession. Moodys said that 22 per cent of traditional associations have cash demands ‘far beyond’ their ability to generate revenue through rent or in cutting costs. And the problem would get worse the longer weak lending and few property sales were ‘characteristics’ of the sector, as associations were increasingly reliant on the housing market for revenue.

Mortgage lending continued to slump in February, with gross lending down by 60 per cent in year-on-year figures and 15 per cent down from the previous month, according to figures from the Council of Mortgage Lenders. The CML said its members’ ability to lend was drying up because savers were put off by low interest rates and were looking elsewhere for higher returns. 

The number of single households will increase by almost two million by 2019, as young adults live alone, research by Lloyds TSB Insurance has found. The number of single households almost doubled between 1971 and 2001, and stalled during the housing boom when prices were rising, but it is expected to increase again. Areas with large numbers of single dwellings include the City of London and Westminster.

Tenants are benefiting from cheaper rents because of an oversupply of property, the Royal Institution of Chartered Surveyors said. The supply of rental homes in London has grown by 67 per cent in the past year, while rents have fallen by 6.9 per cent since March last year, and 1.1 per cent in the past month. In the North of England rents are down 13.5 per cent. Nationwide rents have fallen faster than at any time since 1998. However, estate agents are reporting a big rise in demand for rental properties – up by 100 per cent – as would-be first-time buyers rent because they cannot get mortgage finance.

Black and minority ethnic (BME) communities are changing, and housing providers must plan to meet their changing needs, the Race Equality Commission says. Its research predicts a big rise in the BME population, but the economic crisis is making home ownership more difficult to access, increasing interest in social and affordable housing.

People moving to the UK for work or study from outside the EU will have to pay an extra £50 on top of the visa fee. The two-year scheme, which will raise £70 million to fund more police support and translators, was announced by communities secretary Hazel Blears yesterday. She acknowledged that migrants already contributed to services through taxes, but said the visa fund would provide extra money to ‘ease the transition’ for areas that had seen a big influx of immigrants.

Solicitors are calling for a licensing system to regulate estate agents and increase transparency over their ‘excessive fees’. The Law Society of England and Wales says that along with stamp duty, estate agents’ fees account the majority of the costs of a house sale. The Law Society is putting its concerns to the Office of Fair Trading, which is enquiring into estate agents as part of a wider review of the house buying market.

Communities and Local Government has confirmed that proposed legislation on home information packs (Hips) due to come into effect from 6 April will go ahead. The main change is that the temporary first day marketing exemption will be removed, meaning that a Hip must be available on the first day a property is marketed. The property information questionnaire, including information on gas and electricity safety, flood risk, parking arrangements and details previous structural damage, must now be included.

The economy will keep shrinking well into next year or the year after, after most of the UK’s leading competitors will have started to see a return to growth, the International Monetary Fund (IMF) will warn this week. The IMF believes the UK will fall by 3.8 per cent, followed by a further 0.2 per cent fall in 2010.

An increasing number of wealthier homeowners are seeking debt help as the rise in unemployment and falling property prices puts pressure on household budgets, the Consumer Credit Counselling Service said. Its research shows 12 per cent of clients had a net household income of more than £30,000 last year and nearly half of those seeking help were homeowners (47.5 per cent). This compares with 2007 when just 8.7 per cent of clients earned £30,000 and 42.6 per cent were homeowners. The charity says that homeowners owe on average 83 per cent more than those in rented accommodation.

A third of armed forces families in Ministry of Defence (MoD) housing are unhappy with their standard of housing, a National Audit Office report has found. In the past two years just 1,700 of forces’ 50,000 homes have been upgraded, and at the rate of progress it will take two decades to get the housing stock up to standard. More than 9,000 properties, or 18 per cent of stock, are standing empty because they are in the wrong location or are too small for families. The MoD provides housing for 42,000 army personal and families and spends £38 million on maintaining vacant properties and £16 million on private rented accommodation for families it cannot house.

Just ‘one square mile of land’ could solve the shortage of land in England for Gypsy and Traveller sites. A new report from the Equalities and Human Rights Commission found that investing in proper provision could generate income for councils, improve community relations and provide decent accommodation. The report shows that well-run, authorised sites could exist in harmony within communities, and could cost less than the £18 million of council taxpayers’ money a year.

On the tenth anniversary of Labour’s pledge to end child poverty, the Child Action Poverty Group (CPAG) has urged the government not to abandon the target in the face of global economic issues, arguing it was still possible to achieve the goal of halving child poverty by 2010. In a report the CPAG found that 600,000 children have already been lifted out of poverty since 1999, with a further 500,000 expected to follow as a result of current policies, leaving 700,000 still on the 2010 target. Analysts have estimated that an investment of £3 billion could help the government eradicate child poverty.

The Financial Services Authority (FSA) is putting forward new rules on lending and to prevent banks taking excessive risks. Chairman of the FSA Lord Turner wants banks to publish more and clearer information in their accounts about the risks they are taking, while a pan-European body has been proposed to set standards for other regulators to follow. A shake-up in the relationship between the FSA, Bank of England and the Treasury is also set to be proposed.

House prices fell 11.5 per cent in the year to January 2009, according to figures from Communities and Local Government. The latest monthly figures also show a fall between December 2008 and January 2009 of 10.2 per cent. However, the cost of a detached house actually rose 4.9 per cent between December 2008 and January 2009. Estate agents say the increase in detached property prices was down to short supply while buyer demand for those with access to ready cash or equity is also strong.

North Kesteven district council in Lincolnshire, has now been granted permission to build two semi-detached affordable homes from straw bales, as we first mentioned on 29 January. The two three-bedroom homes will cost £110,000 each to build.

The Local Government Association (LGA) has compiled a list of 200 words and phrases it has banned so that staff can ‘communicate effectively’. The list includes ‘predictors of beaconicity’, ‘re-baselining’ and ‘benchmarking’. LGA chairperson Margaret Eaton said the public sector must not hide behind impenetrable jargon.

The number of repossessed homes soared by 68 per cent last year, to a total of 46,750 properties, according to figures from the Financial Services Authority. There was also a steep jump of 13 per cent in the number of people behind on their mortgage repayments in the final quarter of the year. The number of mortgages that are in arrears, as a proportion of all loans, increased during 2008 to 3.37 per cent, up from 2.26 per cent a year earlier. The FSA figures cover all regulated lenders and include both first and second charge mortgages.

The proposed cap on mortgage lending the Financial Services Authority proposed yesterday has been described as a ‘suicidal’ move for the housing market. The FSA wants to restrict mortgages to three times a buyer’s annual income, but representatives from the mortgage industry and estate agents have said any further restriction in mortgage lending was ‘adding insult to injury’, causing prices to come down even further and limiting consumer choice.

Middle class homebuyers are downsizing their properties because of the mortgage drought, the National Association of Estate Agents (NAEA) has said. Housebuyers who would normally have looked for a four-bedroom property are being forced to seek out three-bedroom properties because they are unable to raise large enough mortgages. The NAEA said that smaller houses are seeing their value increase slightly, due in part to an increase in demand, while larger properties saw their value fall.

The ombudsman for estate agents has reported a ‘surprising’ workload, even though activity in the house market has slumped 60 per cent. The number of disputes over house sales was down just 3 per cent in 2008, but the overall rise in new cases was 20 per cent. The ombudsman said he expects the majority of his work this year to shift into the rental market, as there is an influx of unqualified agents into lettings.

The increase in ‘accidental landlords’ has pushed the average cost of renting down by more than 2 per cent during the first three months of the year. Research from Gumtree.com found a 19 per cent increase in the number of people advertising properties on their website, while average rents across the UK dropped 2.2 per cent, with the Oxford area seeing the biggest plunge of 6 per cent. London was down 3.6 per cent, while Manchester and Belfast saw rents drop by 2.9 per cent and in Brighton they were 2.7 per cent lower.

Community Legal Advice (CLA) has created a film outlining the rights of private tenants who are facing eviction, having problems paying rent or getting their deposit back. The film has been shot in British Sign Language, as CLA has found deaf people suffer disproportionately with legal problems, however there is a voiceover making it easily understood by any private renter.

Meanwhile, the Association of Residential Letting Agents (ARLA) accused the Conservatives of failing to understand the rental market, after yesterday’s announcement of new Tory measures to protect tenants from repossession. A spokesperson from ARLA said that while they welcome additional support for tenants in these tough times, the proposal to bring forward the planned extension of repossession notice to tenants will be almost worthless coming at the ‘wrong side of the repossession being granted’.

London Councils is calling for investment to be targeted towards the London suburbs and for a town centre and district improvement programme to put the high street ‘back at the heart of the community’. Also included are calls for more office space to attract businesses and a change in housing policy to reflect demand from residents, especially young families. The suburbs are home to 60 per cent of London’s population, and provide a third of the jobs.

In Scotland, homeowners have been given help by the government, as two new mortgage schemes are launched. One deal allows the government to take a financial stake in the home of those who may be about to be made homeless, while the second scheme helps people threatened with repossession stay in their homes as tenants of a social landlord. The schemes are costing the Scottish government £35 million. Shelter Scotland said the schemes should be promoted more, as research has found that many people did not know about them.

Homebuyers will be prevented from borrowing more than three times their annual salaries under new mortgage rules to be announced this week. As part of a package of banking regulations, 100 per cent mortgages will also be banned. Prospective homeowners will have to provide a deposit of at least 5 per cent, but many banks and building societies are expected to ask for larger amounts. Chairman of the Financial Services Authority Lord Turner is preparing a crackdown on executive bonuses that ‘reward risk-taking’, to require banks to hold greater levels of capital during boom years.

House builders are likely to become more conservative and turn their backs on major regeneration schemes in response to the recession, according to research by Knight Frank. House builders and developers will look to smaller scale and lower density developments, particularly on greenfield sites. And with values dropping by as much as 70 per cent, many investors are holding on to land and waiting for values to rise, which will further reduce housing supply, the report argues.

A subsidised housing scheme for middle income earners in London could be extended nationally if it gains ministerial approval. London & Quadrant’s proposal to allow households with incomes up to £60,000 to rent a home for 80 per cent of the market rental and stay as intermediate tenants indefinitely was recently announced by London mayor Boris Johnson. The Homes and Community Agency sees the scheme as helpful by allowing housing associations to build out of sites that had previous planning permission for private homes.