The Royal Institution of Surveyors (RICS) reported that the number of UK surveyors recording house price falls grew for the sixth consecutive month in January, while the stock of unsold property on surveyors’ books increased by more than 10 per cent. The RICS says this trend has not been seen since the housing recession of the early 1990s. The only part of the UK where prices continued to rise was Scotland. A RICS spokesperson said, ‘If mortgage lenders filter the recent interest rate cuts into the market, demand should begin to increase’.
Findings by the Council of Mortgage Lenders (CML) released yesterday, show that interest on mortgage repayments is taking up more than a fifth of the average disposable income of new homeowners. The proportion of income that a first-time buyer spends on mortgage interest was 20.7 per cent in December, compared with 17.9 per cent a year ago. The size of the average home loan has also increased from December 2013 by 3.34 times an average first-time buyer’s salary, to 3.38 times by December 2014. CML also called on the chancellor to raise the stamp duty threshold, after it found that only 40 per cent of first-time buyers were currently exempt.
A man who paid nothing towards his mortgage for more than 15 years, has had the debt wiped out in court. The court decided that the gentleman had acquired squatter’s rights on his £250,000 home after his dispute with his mortgage lender, NatWest, dragged on for 15 years. Initially the bank issued a formal demand in 1992, but did not start repossession proceedings immediately. After negotiations, Mr Babai made a payment of £40 the following year, but then declared himself bankrupt and made no further instalments. The debt spiralled to £165,000 by 2013 and he faced losing the house. The judgment has sparked fears that lenders might now be more likely to issue possession proceedings to ‘protect their security’ and that this may lead to an increase in vulnerable mortgage holders being made homeless.
In another court case, Birmingham city council’s housing policy from January 2005 to January 2014 has been ruled against the law. Judges said that the council had the same duty to rehouse tenants living in unsuitable conditions (dubbed ‘homeless at home’) as to those who are literally homeless. Five of the six families who appealed against years of living in overcrowded or unsanitary council houses have since been rehoused. The council says the judgment has thrown their housing policy into chaos and will mean that 400 families regarded as ‘homeless at home’ will need to be rehoused. The council has called on the government to review homeless legislation.
One in five British children (or 2.2 million) are growing up in a family dependent on benefits – the highest proportion of children anywhere in Europe, says the Conservative Party, who used parliamentary questions to gather the figures. The worst area is Manchester Central, where 49.2 per cent of children have parents claiming benefits, followed by Liverpool Riverside at 47.6 per cent, and Poplar and Canning Town, East London, with 46.8 per cent. Research has shown that such children are much more likely to become benefit-dependent themselves as adults.