Alistair Darling is under pressure to revive the house market by bringing forward a new funding scheme. Under influence from the Council of Mortgage Lenders, the chancellor is considering extending the Bank of England scheme to exchange mortgage-backed securities for government bonds. The move is aimed at boosting the volume of lending and driving borrowing costs down.
But Government funding for new and affordable housing at the expense of improvements to existing housing stock is having a disastrous effect on some of the most vulnerable members of the community, says the Chartered Institute of Environmental Health. A spokesperson for the organisation said increased funding for new housing has come at the expense of assistance for existing housing.
Hometrack has released its house price index for July, showing house prices continuing to fall, with the greatest decline in London and southern England. It was the tenth monthly drop, down 1.2 per cent for the month and 4.4 per cent year on year. Properties are staying on the market for an average of 11 weeks, up almost a week in the past month, while sellers are getting on average just 90 per cent of the asking price.
However average house prices in England are set to rise by 25 per cent by 2013, according to a National Housing Federation report. The report believes prices will fall 4.4 per cent in 2015, down 2.1 per cent in 2016, recovering by 2017 and rising again by 9 per cent in 2012 and 2013. The federation’s chief executive said that as soon as the economic outlook improves, house prices will resume their previous upward trajectory.
Housing associations saw a surge of 117 per cent in shared ownership sales over the past six months, since the withdrawl of 100 per cent mortgages by high street banks.
Farmland in the UK has increased at its fastest ever rate, according to the Royal Institution of Chartered Surveyors . While house prices are falling, the soaring cost of food has pushed up demand of farming land and the cost per hectare has increased 32 per cent in the first half of this year while the number of transactions has also increased 50 per cent since the same period last year. However the number of ‘lifestyle’ buyers has fallen dramatically.
Five million people spent more than they earned each month, an increase of 8 per cent over the past three years, according to research by Legal & General, with the figure likely to get worse as the impact of the credit crunch and rising energy bills hit. Almost 82 per cent of people living in the north spend more than they earned, compared to three years ago, compared with 8 per cent of Londoners.
Hip Hip hooray – it’s the first anniversary of home information packs this week, but the debate over their purpose is still raging. While some research has shown that those with a Hip exchanged contracts 12 days earlier than those without, others blame the introduction of Hips as contributing to the falling housing market.