ROOF Blog

Most Britons believe that house prices will rise this year as the country awaits official confirmation that the worst peacetime recession is finally over. A survey by Rightmove found that 53 per cent of those in the UK believe house prices will rise over the next 12 months, compared with just 10 per cent at the beginning of last year. The sharp upswing in confidence about one of the worst affected sectors during the recession comes prior to the publication of figures tomorrow that are expected to show the economy started growing again in the last quarter of 2009. Economists are predicting that the Office for National Statistics will say that gross domestic product increased by 0.4 per cent, which would mark the official end of the recession following six quarters of contraction.

The recession may have severely dented the property market, but new figures show it has also prompted a surge in official complaints against those who make their living from it – estate agents, lettings companies, developers and even surveyors show big rises. The Property Ombudsman Scheme (POS) – the best-known redress system for buyers, sellers and tenants – received well over 10,000 complaints last year, with those in the lettings sector of the market alone surging by 79 per cent since late 2008.

House prices defied the economic downturn last year to rise 1.1 per cent, boosted by a second-half surge in demand from homebuyers. The annual increase was the first rise over 12 months that Halifax, the mortgage lender, has recorded since March 2008. The latest rebound continued in December, with prices rising by 1 per cent over the month, the sixth monthly rise in a row, taking house prices to an average of £169,042 — 9.4 per cent higher than in April last year, when the market bottomed out. Despite the apparent buoyancy of the market, Halifax, now part of Lloyds Banking Group, gave a cautious outlook for the year ahead, warning that it expected house prices to remain flat during 2010.

Crisis has warned that despite the budget deficit, 75% of the British public want the Government to address the growing gap between rich and poor. A YouGov poll commissioned by Crisis also shows that the majority of people in UK (60% of those with an opinion) say that the recession has made them more worried about the gap between rich and poor and the same proportion want to see the poorest protected from budget cuts as they can least afford to pay. Leslie Morphy, Crisis chief executive said: ‘With the election looming, politicians vying for votes must recognise people’s desire for a fairer society. They must not forget those who are poorest, amongst whom homeless people are some of the most vulnerable. They must pledge to protect them.’

Construction activity fell in December for the 22nd month in a row as a surge in housing was offset by a sharp decline in commercial building. The construction purchasing managers’ index, where any level below 50 signals a drop in business activity, rose slightly to 47.1 from 47 last month. ‘December was another disappointing month for the UK construction sector. Unlike other parts of the economy, it seems unable to escape the shackles of the recession,’ said David Noble, chief executive of the Chartered Institute for Purchasing and Supply. ‘Purchasing managers painted a bleak picture as firms suffered from reduced client demand and falls in new business.’

The number of families forced to hand back the deeds to their home in the recession has been understated, according to the Conservatives, because the official figures exclude ‘sale and rentbacks’. There were 48,000 repossessions in 2009, compared with 75,000 in 1991 at the peak of the last recession. Labour said the figure, which was lower than some earlier predictions, was proof that its measures had worked. But Grant Shapps, shadow housing minister, has claimed that the true number of people losing their homes is far higher. The total cited by Labour, he said, did not include those homeowners who sold their home to a landlord and rented it back in an attempt to remain in the property.

The recession’s toll on consumers will be laid bare today as Bank of England figures show that nearly a third of workers have had their household income drop by at least £1,200 a year amid soaring unemployment, shorter working hours and pay freezes.

About 30 per cent of manual workers and 27 per cent of office workers said that their disposable income – money left to spend each month after paying tax, housing costs, utility bills and loan payments – had fallen by £100 or more over the past 12 months, according to the Bank’s ‘Quarterly Bulletin’.

Research from the Office for National Statistics shows that almost one in five graduates in their late twenties now live with their parents.

By contrast, only one in eight university graduates had failed to fly the nest by the same age 20 years ago.

Rising property prices, mounting student debts and the effects of recession on the job market have forced a wave of young people to move back into the family home at an age when they would normally be moving out.

The research suggests that young people in Britain are twice as likely to live with their parents in their late twenties than their counterparts elsewhere in Europe.

Thirty years ago this month – on 20 December 1979 – the new Conservative government led by Margaret Thatcher published its housing bill, changing the social face of Britain with one of the most popular political promises in history: the Right to Buy.

Today the repercussions are still being felt. This year the number of council houses sold off passed the two million mark; so too did the numbers of people across Britain on waiting lists for a council house, up almost 10 per cent in a year.

Some inner-city areas would need decades to clear their backlog.

With house building all but stopped in a recession that has seen repossessions and unemployment rise, there is a crisis in Britain’s homes, and the finger of blame is pointed firmly at that ‘social revolution’ of 1979.

Evidence is growing that the worst is over in the recession-hit property market following a string of cautiously optimistic assessments from the UK’s leading housebuilders.

Persimmon set the tone this month when it predicted a moderate recovery. Barratt, the UK’s largest housebuilder, and Bovis Homes echoed that sentiment with similarly upbeat forecasts.

The number of new homes being built rose to its highest level for over a year in the three months to October, with work starting on 25,000 new properties, an increase of 27 per cent compared with the same period last year.

However, housebuilders are reluctant to be too bold over the prospects of a sustained recovery because of the fragility of the market and the uncertainty over the continuing availability of mortgages.

‘We are way ahead of where we were this time last year, but we’re not out of the woods yet and there could still be plenty of problems for the industry were the banks to pull back lending,’ said Bovis’ chief executive David Ritchie.