The Bank of England announced yesterday that it would provide £10 billion in emergency funds to the UK’s commercial banks in an attempt to prevent a worsening of the credit crunch over the Christmas period. Bank governor Mervyn King said current fragility meant further action might be needed in coming weeks, and he forecast a tough year ahead. Despite this, the bank’s monetary policy committee is not expected to cut interest rates until the new year at the earliest.
Bradford & Bingley, Britain’s largest buy-to-let mortgage lender has abandoned a planned share buyback because of the credit squeeze. After selling £4.2 billion of commercial property and social housing debt last week to free up cash, ‘current capital market conditions have made this plan uneconomic’, B&B said. However the decision will be reviewed in the new year.
The Empty Homes Agency is calling on the public to report long-term empty homes to help bring them back into use. More than 840,000 properties stand empty in the UK and the agency believes that housing supply can be improved by a concerted effort to restore more of them. ‘The government is fixated on just building more homes, but we are convinced that returning more empty homes to use should be part of the solution too,’ said the organisation’s chief executive.
London’s 33 local authorities say planned government cuts to housing benefit will hit their work rehousing the capital’s homeless. The decision by the Department for Work and Pensions to cut housing benefit by 10 per cent for 2015/09 will leave the boroughs with a £38 million shortfall in their homelessness prevention budgets, and will prevent them from meeting the Communities and Local government 2017 temporary accommodation target. Last year, the councils moved 3,000 households from temporary accommodation.
Finally in America, the price of new homes has fallen by the biggest amount in 26 years. Average new home prices fell 8.6 per cent in September from the previous month, and down 13 per cent from the same time a year earlier.