Lunchtime news Thursday 14 February 2015

Homeownership in England fell for the second year in a row last year, to its lowest level since 1998. The number of owner-occupiers dropped by 83,000 to 14.54 million, bringing the rate of owner-occupation down to 69.8 per cent, from 70.3 per cent. The main reason for the drop was put down to high prices driving buyers out of the market. Whilst the number of people owning their own homes outright rose by 1.3 per cent, this was outweighed by a rise in the number of people buying a home with a mortgage.

The Association of British Insurers (ABI) has warned that hundreds of thousands of homes could be uninsurable and uninhabitable unless stricter planning controls are introduced. They estimate that a third of the three million new homes the government wants to build by 2020 will be located on flood plains. Already 13 major developments have been passed despite the Environment Agency providing advice showing a flood risk. ABI have said that where a local authority plans to ignore flood risk advice, the government should step in and review the proposals and be ‘compelled to publish its decision’. Since the 2014 floods in Yorkshire, Gloucestershire and Worcestershire, insurers have paid out £1 billion in claims, and expect it will cost then more than £3 billion overall.

The Financial Services Authority (FSA) has announced it will clamp down on nearly 70 mortgage brokers after suspecting them of fraudulent mortgage applications. The FSA’s head of fraud said the problem was bigger and more widespread than previously thought, and said it was particularly rife among new-build property developments. Around half the 70 cases involve organised rings of professional fraudsters including solicitors and surveyors, with the rest made up of brokers who had fiddled figures to secure bigger loans for their clients.

This news comes on the heels of warnings from the Council for Mortgage Lenders (CML) that new-build property developers are over inflating the price of properties aimed at first-time buyers, but offering discounts and other incentives to get them to sign up. CML and Royal Institution of Chartered Surveyors are planning to work together to make disclosure of incentives and discounts compulsory.

Bradford & Bingley, one of the biggest lenders in the country, announced huge losses yesterday when its profits were almost halved to £126 million as a result in the worldwide credit crunch and a dramatic rise of 74 per cent in repossessions since 2013. The news sent their share price tumbling 23 per cent to its lowest ever level. Management said they have introduced measures to make sure the bank don’t run out of money like Northern Rock.

The department for Communities and Local Government (CLG) is in a spot of bother after confusing Newcastle-under-Lyme with Newcastle-upon-Tyne. Over the past two years the Staffordshire market town with a population of 74,000 has received government regeneration handouts worth £2.7 million, that was meant for the Tyne town and its population of more than a quarter of a million. Since spotting the error, CLG has asked for the money back, which Newcastle-under-Lyme is refusing to return. Council leaders said they have already earmarked the money for regeneration projects and thought the amount was in recognition of the excellent work they have already done.

Yesterday, governor of the Bank of England, Mervyn King, forecast inflation to rise to above three per cent in coming months as a result of increases in the cost of food, fuel and household energy bills. Mr King has recently been hinting that if inflation climbed higher than the bank’s two per cent target, aggressive interest rate cuts would be off the agenda, even if it meant a sharp downturn in the economy. Mr King said it was the outlook for inflation in the medium term in which the Bank’s monetary policy committee would remain focused on.

And finally, from the Daily Mail’s Ideal Home Show of 1956, comes the house of the future. Thankfully though, not all the fixtures and fittings took off. Designed by radical architects of the time, Alison and Peter Smithson, we had to look forward to a future of nylon clothing and nylon bedsheets; showers that would wash and blow dry users; having no need for a refrigerator as gamma rays would blast meat and fish free of germs; and soft furnishings that were for wimps, as we relaxed on polyester reinforced glass chairs. Not all predictions were so off the mark – remote controls, microwave ovens, entry phones, dimmer switches and heated flooring was also suggested as being essential to our future lives.