The US housing market has been rocked by a further crisis as its 10th largest home lender, American Home Mortgage (AHM) has filed for bankruptcy. Whilst a sub-prime lender, AHM specialises in mid-tier borrowers (‘Alt-A’ loans) which are thought to be a better credit risk. Analysts predict that the US Reserve Bank will be forced to cut interest rates soon, as 1.5 million people could default on home loans worth up to £108 billion.
Communities and Local Government is to set up a select committee to look into the cost of making homes eco-friendly and who should pay. The committee will be tasked with looking at what can be done to make homes more energy efficient, and whether methods of adapting homes are up to standard.
With the housing market there are always winners and losers. Two winners cashing in on the recent government housebuilding bonanza are construction company Morgan Sindall, which announced record first-half profits as a result of an increased demand for affordable housing, along with HBOS, which has just acquired a stake in the social housing maintenance company, Apollo Group. Both companies are bound to benefit from the government pledge to spend £6.5 billion on social housing over the next few years, £8 billion on affordable housing and a commitment to provide billions of pounds towards the ‘decent homes’ initiative to repair and maintain the national housing stock.
If you live in the South Tyneside area and have a spare room, you may be able to make a bit of money out of the housing boom too. College staff at the South Tyneside College in South Shields, and local residents, are being asked to open their homes to students due to an accommodation shortage. With an influx of hundreds of foreign students expected in the next few weeks, the college has had to resort to a newsletter appeal throughout the local area.