ROOF Blog

Housing benefit should be converted to a £17,000 lump sum grant to enable poorer people to put down a deposit on a home, think-tank Demos has suggested. In a report, Recapitalising the poor, it argues that it this would help end the ‘culture of dependency’ that dominate poor communities. It also said that part of the income tax paid by low earners should be ringfenced and put into a private pension to remove them from the system of means-tested pension credit when they retire.

Banks and building societies are under pressure to cut their mortgage rates, after the Libor rate fell to its lowest level in more than 20 years. Conversely the average two-year tracker rate mortgage increased from 3.73 per cent a month ago to 3.77 per cent this week, and lenders have also pushed up the price of fixed-rate mortgages to their highest level for at least 20 years. Critics have accused lenders of being ‘unfair’ to homeowners and threatening the recovery in the housing market. Libor is the rate at which lenders lend to one another.

Meanwhile a book from the University of Warwick has found the UK’s housing market was ‘encouraged’ by the government. The investigation said the government wanted to meet the cost of support an ageing population by encouraging people to invest in housing assets as a way of accumulating wealth and making them less reliant on public pensions when they retire.

A Communities and Local Government select committee has reported that if the government is to meet its house building targets it must bring in new measures to support the mortgage market. The committee warned that the Treasury’s asset-backed guarantee scheme was not enough to kick start the housing market, and was ‘doomed to fail’. It also criticised the government for focusing on owner occupiers at the expense of the private and social rented sector.

Research by the Royal Institution of Chartered Surveyors has found that estate agents believe house prices will rise in the coming three months to counteract a drop in supply. It was the first time since May 2007 that agents predicted an increase in house prices. RICS also found signs of an increase in market activity, with the average number of sales completed by each estate agent rising to 12.7 in the three months to June, up from 11.7.

Figures from Communities and Local Government show that house prices fell 12.5 per cent in May. London saw the biggest decline in England with prices falling 16.3 per cent, while Northern Ireland suffered the largest drop with prices down 23.2 per cent between April and May. Howard Archer, an economist at HIS Global Insight, said he believed a further decline of 10 per cent was possible.

Two of the UK’s largest house builders Redrow and Barratt Developments have said that the continuing lack of mortgage availability is hampering the recovery of the housing market. They said that while the market has stabilised too many would-be buyers are struggling to get the finance needed, and the drought in the mortgage market was ‘without doubt… a major obstacle to the recovery of the housing market’. Both companies are facing a big decrease in their average selling price.

According to the latest National Housing Planning and Advice Unit’s survey on housing, attitudes to new housing developments need to change ‘as a matter of urgency’. More than half of current homeowners (51 per cent) would object to new housing being built in their area, despite continuing home affordability issues where as many as 90 per cent of young people cannot afford an average first-time buyer’s house. By comparison less than a third of non-homeowners (31 per cent) would object. Despite the average house price fall of 22 per cent, almost nine out of ten young people cannot afford to buy an averagely priced first-time home.

House builders are drip feeding homes on to the market so they don’t flood the market and cause further price falls industry experts warned yesterday. The practice is ‘widespread’ among large scale builders such as Barratt, and they blamed a lack of competition between developers of large sites for the problem, as greater competition would bring more houses to the market.

A new website has launched showing how people can work together to legally borrow empty properties from their owners and return them to use. The site shows how to get hold of and borrow the empty properties from the owners, and where to go for funding, how to arrange repairs and how to turn renovating a property into a training opportunity.