Lunchtime news Wednesday 23 April 2023

Following yesterday’s meeting between chancellor Alistair Darling, housing minister Caroline Flint, and key mortgage industry figures, Darling said that homeowners would now have enough support to ensure that their homes are not repossessed. However the ministers stopped short of outlining just how they would help people keep their homes. Mortgage lenders welcomed the plan as an important step in tackling the industry’s funding difficulties, but said that the Bank would need to commit to billions more in funding before the money markets functioned properly again. They also said that mortgage rates will continue to rise and may not return to the low rates of the past year. On Monday, the Bank of England (BoE) injected £50 billion into the banking industry.

The cash injection on Monday had an immediate impact on some of the UK’s biggest lenders – but not necessarily in the way hoped. Abbey National, Britain’s third biggest mortgage lender, immediately cut its two-year tracker and flexible mortgages by 0.1 per cent, but raised rates on some of its fixed-rate mortgages, stopped selling buy-to-let mortgages to landlords, and introduced stricter lending rules for homeowners who now need a deposit worth 25 per cent to qualify for the cheapest deals.

Meanwhile, the scheme has come under fire from Shadow Chancellor George Osborne who wants the BoE to explain why it is including credit card debts in the range of collateral it was prepared to swap for government bonds. Osborne warned that taxpayers should only accept the most secure assets from banks in exchange and Lib-Dem Treasury spokesperson Vince Cable warned that the swap plan would expose taxpayers to massive risk. He believes that the banks had yet to ‘come clean’ about the full extent of their financial losses, and said that the scheme is only dealing with the symptoms of the crisis, not the cause.

There is further news of a slump in mortgage lending as the British Bankers Association (BBA) said there were just 35,417 new mortgage approvals in March, 18 per cent lower than in February, 46 per cent lower than March last year and the lowest monthly figure since 1997. Overall credit card lending increased slightly, while unsecured lending weakened.

In other news, Westminster council is targeting 600 families which it says are having ‘a long-term negative effect on society as a whole’. The council says that about 3 per cent of these families are dealt with by up to 20 different bodies, tend to be responsible for a ‘significant proportion of local crime and disorder’ and represent a ‘burden on the taxpayer in terms of welfare benefits, social care, healthcare, criminal justice and educational support’. The council is to look at ways of changing their behaviour and hopes that the multi-agency team will be in place by the beginning of next year.

And finally, a replica 1930s semi is being used to test new technologies aimed at improving energy performance in Britain’s ageing housing stock. Energy supplier Eon is teaming up with the University of Nottingham to build a three-bedroom house using the latest low-carbon technology to generate and manage energy within the house. A spokesperson for the project said that more than 21 million homes – 86 per cent of the current total – will still be in use in 2050, and it was ‘vitally important’ to reduce the energy consumption in existing homes.