The Bank of England figures show the number of new mortgages approved for homebuyers fell in July to just 33,000, down 71 per cent on a year ago. This brings further pressure on the government which is expected to release tomorrow a package of financial measures to get the housing market moving again. The latest organisation to claim that governmentefforts are lacking, the Royal Institution of Chartered Surveyors, has come up with its own reforms, after its latest research found that housing sales are at a 30-year low. Recommendations include: allowing the Bank of England to guarantee the issue of new mortgage-backed securities; establishing a tax-free savings scheme to allow first-time buyers to save for a deposit more easily; a short-term holiday on stamp duty, followed by a new lower rate; reduced VAT on repair and maintenance costs; changes to the home information packs; and a mortgage rescue scheme that will allow people to remain in their properties.
Hometrack has also released figures showing that sellers are having to cut almost 10 per cent off the asking price in order to secure a sale, but there were signs that falling prices were starting to attract buyers as the number of viewings to achieve a sale fell for the first time in a year. However properties are still taking more than 11 weeks to sell, twice the time taken a year ago.
Meanwhile, a member of the Bank of England’s monetary policy committee, David Blanchflower, has warned that two million people may be out of work by christmas and house prices will have fallen by 30 per cent unless interest rates are cut. He said the Bank should learn from the example of the US Federal Reserve which cut rates to halt a recession.
Housing Minister Caroline Flint has said that the government has created a housing system that encourages people to claim benefits and avoid working in order to get a council home. She said the ‘demeaning and dysfunctional’ rules force people to manipulate the system in a ‘race to the bottom’. She said the government had started looking at some of the issues around allocations and whether the system is fair or not.
If you had bought a house in a university town during the past 5five years however, chances are you won’t be too concerned about the state of the housing market. Prices have soared in 23 towns by an average of at least 50 per cent – but some towns such as Belfast and Dundee had increases of more than 100 per cent. The UK’s ten most expensive university towns are in the south-east of England.
According to the Guardian, some local authorities are advising tenants served with notices to quit, to stay in their property until they are forcibly evicted. The councils say that tenants who give up their accommodation before eviction could be viewed as intentionally homeless and may lose eligibility for a council home.
MPs called for a ‘radical overhaul’ of the outdated benefits system for carers, and urged the government to provide them with extra financial support. People who care for relatives and friends are believed to save the government £87 billion annually, and the Commons work and pensions select committee has recommended income replacement for those who have to work part-time or are unable to work because of their commitments, and compensation for the extra costs incurred by those providing ‘intensive’ caring roles.
The report coincides with the launch of a new service, FirstStop, which aims to be a free one-stop shop for information about care fees, funding, chosing the right home, as well as information about social care provision, benefits and rights. Help the Aged believes that care fees have increased by 51.5 per cent in the past five years to an average of £20,000 a year, and have predicated that they will double in the next 20 years.