For the first time in a decade the number of social homes built has outstripped those lost through the right to buy. The number of council tenants in England who brought their home fell by a third in 2013-07, with significant falls occurring in Yorkshire and Humber and London. The Chartered Institute of Housing said that tenants were now more reluctant to buy: ‘Right to buy obviously is not as attractive any more, partly because house prices are high and people are more worried about borrowing money’.
Morgan Stanley, one of the world’s leading investment banks, has said that the aftershocks from the Northern Rock fiasco could have dire consequences on consumer confidence and the housing market, and may push Britain to the brink of recession. The Bank of England also released their twice-yearly financial stability report today, reporting that first time buyers and buy to let landlords are most at risk of defaulting on their mortgage, and bankruptcy. With first time buyers now paying 20 per cent of their salaries in mortgage interest repayments, and rental yields currently two per cent lower than mortgage costs the bank has raised its ‘danger level’ warning on all parts of the financial system.
And there is no respite in sight, as a report by Children’s Mutual found that 95 per cent of parents think they will be supporting their children into adulthood. Many parents are already raiding their savings, neglecting their pensions, putting off holidays or major purchases, and even remortgaging their homes to provide their children with a helping hand. More than 60 per cent of those questioned were concerned their children would not be able to afford to buy a home and over half said they would help them get on the property ladder.
More than 2.4 million households, or three million UK homeowners, are no longer required to pay inheritance tax since the recent changes were announced, according to a Halifax report. The bank says there were 62 postcode districts in England and Wales where at least a quarter of home sales were for more than the £600,000 combined threshold for the tax during the last year, and most of these are in London and the South East.