ROOF Blog

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.

Meanwhile Communities and Local Government has released figures showing the average cost of a home jumped 1.1 per cent during the month. The annual rate at which prices are declining is easing slightly to 13 per cent, down from 13.6 per cent in March. The annual average house price paid by first-time buyers in April was 16 per cent lower than a year ago, while prices paid by owner occupiers were 11.9 per cent lower.

The level or arrears and repossession should be lower than the early 1990s, the head of the Financial Services Authority (FSA) said yesterday, as the short-term financial position of many borrowers had been improved by low interest rates. Lord Turner added he is still considering regulating the size of mortgages being made available – limiting their amounts to the value of the property or the borrower’s income. He also warned that early indications suggested the buy-to-let market may produce ‘significantly higher arrears and defaults than owner occupiers’.

More than 40 per cent of social tenants or their families have been hit by antisocial behaviour during the past two years, according to a YouGov poll. Council and housing association tenants are much more likely than private homeowners to suffer from antisocial behaviour, and more social tenants than owner occupiers believe that the level of behaviour has become worse in their area over the same period. Just 17 per cent of those questioned had confidence in their council or social landlord to tackle the problem, and almost two-thirds expect the problem to increase as a result of the downturn.

The government is considering forcing mortgage lenders to give more notice to tenants who could be evicted if their buy-to-let landlord faces repossession. Currently lenders must send a letter to tenants at least two weeks in advance of a repossession hearing involving their landlord, but changes are planed to increase this to seven weeks. Lenders argue that they already make every effort to contact tenants who could be evicted. Landlords with buy-to-let mortgages are now falling behind on their repayments more quickly than owner-occupiers according to the Council of Mortgage Lenders’ latest figures.